Don’t Tread on Me: California’s New Eco‑Tire Rules

On 17 August 2026, the California Energy Commission (CEC) approved the Replacement Tire Efficiency Program (RTEP), which will regulate efficiency for replacement (aftermarket) tires for the first time in the United States. The CEC claims these regulations will greatly improve fuel economy and efficiency while minimally increasing cost. Consumers will allegedly save a great deal of money on fuel while barely paying more for the tires themselves. However, these claims run contrary to both abstract economic theory as well as the realities of tire engineering. In fact, it is likely that consumers will pay higher prices for tires with significantly worse tread-life and adverse weather traction.

The tires that come on new vehicles—referred to as OEM (Original Equipment Manufacturer) tires—typically deliver superior fuel economy than aftermarket (retail) tires, but with inferior tread-life and/or traction. Vehicle manufacturers strive to satisfy CAFE (Corporate Average Fuel Economy) standards, which mandate fleetwide fuel economy averages with financial penalties for non-compliance. Therefore, OEM tires are specifically engineered to maximize fuel economy at the expense of most other parameters. Automakers also aim to maximize ride comfort for customer test drives, but factors that are not observable during test drives—such as adverse weather, traction and tread life—are given lower priority. Therefore, OEM tires typically deliver superior fuel economy and ride comfort, but often (not always) have inferior traction and tread life compared to retail tires.

According to the CEC, the new RTEP regulations “are designed to ensure that replacement tires are at least as energy efficient, on average, as tires sold on new vehicles.” The CEC claims that drivers will save an average of $179 in fuel over the life of a set of tires, while each tire will cost only $1.50 more. However, an examination of both (1) abstract economic theory as well as (2) the real-world details of tire engineering reveals these claims to be highly dubious.

First, if energy-efficient tires really did save consumers more in fuel than they cost extra, then consumers would already be buying these tires. If the CEC’s claim is true, then tire manufacturers would have had a profit motive to market energy-efficient tires without any regulation. Consumers would obviously prefer to purchase a tire that advertises it will save customers an average of $X per year in fuel, rather than a similarly priced tire that makes no such claim. The very fact that the regulation is needed implies that consumers will not save money. Consumers must be forced to purchase energy-efficient tires against their own interests. The CEC cannot have it both ways. They cannot honestly claim that customers will save money and that the regulation must be mandatory to be effective. Since when is it necessary to compel consumers to spend less money for an equally good product?

The CEC may claim the consumer benefit is consistent with the mandatory regulation due to asymmetric information – a market failure which can be corrected by regulation. If sellers know more about their product than customers do, and if customers are unable to judge quality or distinguish true from false claims, then sellers may profit by selling deceptively shoddy or misleading products. Sellers will profit not by providing better products at a lower price, but by offering the lowest possible price and then lying about quality. Akerlof’s “market for lemons” theory shows that if consumers cannot judge the quality of a used car—meaning they cannot distinguish good used cars from lemons—then the market for used cars will be dominated by lemons, and high-quality used cars will disappear from the market.

But the fact that the used car market is not dominated by lemons is proof that consumers must somehow be judging used car quality with some success, perhaps using CarFax and certified pre-owned (CPO) warranties. Perhaps the CEC would claim that consumers cannot distinguish true from false claims of fuel efficiency. Consumers are not purchasing energy-efficient tires, even though this would save them money and benefit themselves, because consumers cannot tell which tires are truly efficient and which are making fraudulent claims. But if so, the solution is simple: a government certification program, either voluntary or mandatory. Let the government furnish a certificate for any tire that passes a government testing regimen.

If the problem is that consumers are ignorant, then the solution is for the government to provide information. Even a voluntary certificate program would likely be effective because this would furnish consumers with the information needed to purchase the energy-efficient tires they presumably desire. But if the CEC is not convinced that a voluntary certification program would be effective, then a mandatory tire classification system would be effective as well. The CEC could mandate that every tire manufacturer must submit their tires for testing and indicate the results on the product label. The European Union has a system like this where every tire must display a “tyre label,” listing fuel consumption (graded A through E), wet traction (A through E), and noise (decibels). In the EU, this is considered sufficient to inform consumers and resolve the supposed market failure from asymmetric information. Why not in California?

Alternatively, the CEC may claim that government intervention is necessary in the case of a negative externality. Consumers who buy tires receive all the benefits of improved traction, comfort, and tread-life, but they shift the cost of pollution (automobile emissions) to everyone else in society. Even those individuals who recognize the cost of pollution will be reluctant to personally bear the cost of reducing pollution, because the benefits will accrue to everyone else. An individual who buys fuel-efficient tires pays the entire cost and receives only a fraction of the benefit. But individuals may be willing to pay more for environmentalism as long as they are assured that everyone else is paying too. Individuals may recognize that the benefits of environmentalism exceed the costs as long as compliance is nearly universal. Essentially, consumers suffer from a prisoner’s dilemma where individual defection is rational even though joint cooperation benefits all. Consumers may consent to a regulation that mandates universal cooperation for the benefit of all.

Alternatively, saving the environment may require coercing the population against their wills because our political superiors know best. However, these arguments will not avail the CEC. The argument for environmental regulation—whether “conceptually unanimous” or paternalistically coercive—assumes that the private cost of environmental action exceeds the private benefit. But the CEC has claimed that individual consumers will save more on fuel than the extra cost of the tires. This means that according to the CEC itself, the private benefit of environmental action exceeds the private cost. In such a situation, environmental action is privately profitable, and no regulation is needed. Once again, if the private benefits of the regulation exceed the private costs—as the CEC claims—then individuals would already be purchasing these tires to begin with. In short, if the CEC’s own claims are true, then no regulation is necessary.

Finally, the CEC’s claims contradict basic facts about the realities of tire engineering. In general, desirable characteristics of tires tend to contradict one another. Wet traction comes at the expense of ice traction; summer performance at the expense of winter performance; reduced rolling resistance (increased fuel economy) at the expense of wet traction and tread-life. For example, one way of achieving low rolling resistance—to improve fuel economy—is to use a shallower tread depth. But a shallower tread depth means reducing tread-life as well as increased propensity to hydroplane. Car and Driver magazine observes that the Hankook Kinergy GT all-season tire comes with 10/32” of tread as a retail tire but only 8.5/32” as an OEM tire. The OEM tire has shallower tread to improve fuel economy to comply with CAFE fuel economy regulations, while only the retail tire has a 70,000-mile warranty. In a statement to Car and Driver, the CEC said: “The proposal is specifically designed to encourage manufacturers to produce longer-lasting tires, which save consumers money and reduce tire waste.” But if manufacturers could produce a longer-lived tire with minimal added cost, they would already be doing so. Indeed, tire manufacturers already advertise their long tread lives and warranties because this presumably attracts customers.

A 2022 test by the Swedish magazine Vi Bilägare demonstrates how much worse “green” energy-efficient tires are in every way besides rolling resistance/fuel economy. The test pitted several European-market summer tires against low rolling resistance (LRR) eco/green tires from the same manufacturers: Continental Premium Contact 6 vs Continental EcoContact 6, Michelin Primacy 4 vs Michelin e.Primacy, and Nokian Hakka Blue 3 vs Nokian Hakka Green 3. Let us compare wet braking performance, in meters, from 80 km/h:

I have confined these results to the set of tires for which we can compare a manufacturer’s own normal and green tires, while the full report contains results for additional tires as well. We see that at 80 km/h—50 mph—braking distances increase about 5 meters—about 15 feet—approximately an entire car length. Jonathan Benson of Tyre Reviews notes, “Overall, ViBilagare considers the eco tyres to be too much of a compromise for the real world, the improvement the tyres bring in rolling resistance and noise levels aren’t worth the considerable reduction in dry grip, wet grip, aquaplaning resistance and starting tread depth.”

The one way to avoid all these compromises is to increase the expense. You can have a tire that (almost) has it all—but you’ll have to pay more money. This should be obvious. If it were possible to create a tire with excellent traction in all weather conditions—dry, wet, and icy—without increasing fuel consumption or cost, then tire manufacturers would have already created such a tire. It is obvious that producing tires superior to those already on the market must cost more, or else those superior tires would already exist. The CEC claims that improved fuel efficiency will not reduce tire tread life or increase costs, but then why haven’t tire manufacturers already improved fuel efficiency on their own? Either the perfect tire without compromises is impossible to create with current scientific knowledge, or else it is possible but unaffordable or uneconomical.

It is not clear precisely what the consequences of these new regulations will be. Will consumers simply drive to Nevada to buy high-quality tires? Or will manufacturers adopt California-style tires across the whole United States? California is such a large market that, frequently, California automobile regulations de facto apply to the whole country. Whether that will be true for tires remains to be seen. Nevertheless, it is likely that at least within California—if not the entire United States—new retail tires will become more expensive, perform worse in adverse weather conditions, and have reduced tread-life, requiring more frequent replacement.

Some good news, however: several classes of tires are exempt from these regulations, most notably tires with the Three Peak Mountain Snowflake (3PMSF) rating for winter traction. This is itself evidence that the CEC knows fuel efficiency comes at the expense of adverse-weather traction. Most 3PMSF-rated tires are winter tires, but a growing segment of all-season tires carries this rating as well. These are the so-called “all-weather” tires, which differ from conventional all-season tires because they carry the 3PMSF rating.

All-weather tires are essentially a compromise between all-season and all-weather tires: they have better winter traction than all-season tires, but worse wet traction and shorter tread life. Winter traction requires a modified tread pattern and softer rubber, which reduces wet traction and tread life. However, all-weather tires are still intended for year-round use, just like conventional all-season tires, and high-quality all-weather tires still have excellent wet traction. Crucially, their exemption from the new regulations means their compromises are driven by consumer demand rather than regulators. To the extent that all-weather tires sacrifice wet traction, it is because consumers demand winter traction, not because regulators demand improved fuel economy.

Any consumer who lives in an affected market—whether this turns out to be California alone or the entire United States—can effectively escape the regulation by purchasing all-weather tires instead of conventional all-season tires. Some notable premium all-weather tires include the Michelin CrossClimate 2, Bridgestone UltraWeather, Goodyear Assurance WeatherReady 2, Continental SecureContact AW, and Nokian Remedy WR G5. The best all-weather tires compete well against conventional all-season tires. For example, in a 2021 test by Tire Rack, the all-weather Michelin CrossClimate 2 took 124.70 feet to stop from 50 mph, while the conventional Continental CrossContact LX25 took 128.50 feet.

In another 2021 test, the all-weather Michelin CrossClimate 2 took 130.00 feet to stop from 50 mph, while the conventional Pirelli Scorpion AS Plus 3 took 132.10 feet. In other words, the all-weather Michelin CrossClimate 2 possesses better wet traction than many premium all-season tires, even though all-weather tires should theoretically have worse wet traction. On the other hand, the Michelin CrossClimate 2 is one of the most expensive consumer passenger tires on the market, so there is no free lunch.

In another test of more budget-oriented all-weather tires, the all-weather tires tended to perform competitively against the conventional all-season tires. The middle-tier all-weather tires may not perform the best in wet weather, but they still perform very well.

This is not to say there are no compromises. Most all-weather tires are either more expensive than conventional all-season tires or sacrifice some wet traction and tread life in favor of improved winter traction. But at least their exemption from the new California regulations means that any compromises are intended to satisfy consumers, not regulators.

So, for consumers in markets affected by the new California regulations, I would advise you to at least consider all-weather tires. We should not believe the CEC when they claim that fuel efficiency can be improved without compromising tread life or increasing costs. If this were possible, it would already have been done. Instead, we should expect the new regulations to result in higher prices and reduced adverse weather traction and tread life. If the CEC is telling the truth, then we must conclude that tire manufacturers have been sitting on some new technology which they have refused to implement until compelled.