Significantly altering fuel efficiency standards will put investments and jobs at risk, the Motor & Equipment Manufacturers Association (MEMA) said in a recent report.
The Trump Administration determined in April that vehicle emissions standards set in 2012 for model years 2022–2025 are no longer appropriate and should be revised.
Motor vehicle suppliers are at the greatest risk of stranded investments, MEMA said, because suppliers have made long-term planning decisions based on the targets set for model years 2017–2021 and for model years 2022-2025.
Suppliers comprise 44 percent of the 4.26 million direct and indirect jobs in the automotive industry. If investments are stalled, jobs will be lost to other markets.
“According to analysis by IHS Markit, the Trump administration’s preferred choice of zero percent increases year-on-year through 2026 would result in a loss of 67,000 direct automotive industry jobs,” MEMA stated. “This would result in an overall industry loss of 500,000 direct, indirect, and induced jobs by 2025 in comparison to the employment levels supported by the augural standards.”
MEMA recommends continued year-over-year increases in emissions standards for light vehicles starting in 2021 and extending until 2026, a national emissions program and the continuation of credit programs through 2026 and beyond.