Eighty-four percent of auto suppliers say current fuel economy standards encourage job growth
Tier 1 suppliers want consistent goals, don’t want 2025 MPG targets weakened
March 22, 2018
PASADENA, Calif. – Major automotive suppliers see current national fuel economy standards as a boon for company job growth and industry investment and don’t want to see them altered by policymakers. That’s according to an annual survey commissioned by CALSTART, an automotive technology industry group.
“Automotive suppliers have benefitted from strong fuel economy standards,” said John Boesel, president and CEO of CALSTART. “Our survey shows that more suppliers are seeing the 2025 fuel economy standards as good for jobs and good for investment. The growth these companies are enjoying is at risk if the 2025 standards are rolled back. If there is one thing these companies need to thrive, it’s consistent, long-term targets.”
The Environmental Protection Agency is expected to complete its review of the standards and make an announcement about their appropriateness at the end of the month. Several major supplier groups weighed in recently saying, “It is in the nation’s best interests to continue leading the development and manufacture of the cleanest and most efficient vehicles in the world.” More than two-thirds of all auto-related jobs in the United States are provided by the automotive suppliers.
A supermajority of respondents – 80 percent – want the current 2021-2025 standards to be maintained or strengthened. As further evidence of the supplier industry’s need for stable, long-term goals, 87.5 percent of the respondents said it was important that the regulators begin now to establish the new standards in the post 2025 period.
CALSTART commissioned Ricardo Energy & Environment, a global consultancy that specializes in the development and implementation of sustainable policy and technology in the automotive industry, to conduct the survey. In February, the firm polled and interviewed 25 suppliers, almost all of them global Tier 1 suppliers that sell parts directly to automakers.
According to the survey:
- 84 percent of respondents agreed that the existing 2025 standards tend to encourage job growth at their companies. This is a 25 percent jump from a similar survey that Ricardo performed for CALSTART in 2016.
- 95 percent of respondents agreed that more ambitious fuel economy standards tend toencourage more innovation and investment in the U.S.; 22.7 percent strongly agreed.
- 80 percent of respondents agreed that the current 2021-2025 standards should be maintained(68 percent) or strengthened (12 percent).
- Respondents emphasized the need for regulatory certainty, which helps companies plan investments and strategies and ensures that fuel efficiency standards will serve as drivers for innovation.
- 87.5 percent of the respondents advocated that it is important to start planning and setting standards now for beyond 2025. New technologies have long development lead times, so regulatory certainty is essential.
- 82 percent of the respondents either agreed (52 percent) or strongly agreed (30 percent) with the statement, “companies that are leaders in vehicle efficiency technology will be more successful over the next 10-15 years.”
When presented with a list of technologies that might be used to meet current fuel-efficiency standards, suppliers picked turbocharging and engine downsizing, along with mild 48-volt hybrids, as the most critical. That represents a change from last year, when higher-speed automatic transmissions were seen as the second-most-important technology.
Looking to the years 2026-2032, the survey identified a dramatic shift in thinking. Over that time period, there was strong agreement, in order, that the top three most important, and widely used technologies would be battery electric vehicles, plug-in electric vehicles, 48-volt mild hybrids and full hybrids.
“Because of these standards, Americans are enjoying the most efficient, safest and advanced vehicles ever built,” said Boesel. “These suppliers see national standards as a signal. They are poised to lead the U.S. in dominating the new automotive revolution that is already underway, but consistency and strength in these standards are key.”