The US National Program for greenhouse gas (GHG) emissionsand fuel economy standards for light-duty vehicles (LDVs) wasdeveloped jointly by the Environmental Protection Agency(EPA) and the National Highway Traffic Safety Administration(NHTSA), with the first phase of the Program running formodel years (MYs) 2012 – 2016. In April 2020, the EPA andNHTSA released the Safer Affordable Fuel-Efficient (SAFE)Vehicles Rule to amend the previous Corporate Average FuelEconomy (CAFE) and GHG emission standards for LDVs,finalizing the current federal administration’s revisions to thestandards for MYs 2021 – 2026.

The SAFE Vehicles Rule weakens the previous CAFE and GHGemission standards, to increase annual fuel economy by 1.5%each year to 2026, compared with the previous CAFEstandards issued in 2012, which would have increased annualfuel economy by 5% per year to 2025 (NHTSA, 2020).Conversely, international policymaking is displaying a shifttowards incentivizing the uptake of zero- and low-emissionvehicles. Therefore, it has become important to consider thelevel of ambition of the US LDV GHG emission standards, inthe context of international policymaking.

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In light of the evolving legislativeframework, Ricardo was commissioned byCALSTART to carry out a survey to examinethe views of Tier 1 suppliers on the currentUS LDV GHG emission standards, andpost-2026 ambition. This survey built upontwo surveys conducted by Ricardo onbehalf of CALSTART in 2018 and 2016,which assessed suppliers’ views on theprevious CAFE and GHG emissionstandards. The 2020 survey aimed togather suppliers’ views on the existingstandards and future ambition, as well asthe role of the standards in investmentdecision-making, innovation and jobgrowth. The survey also aimed to examineperceptions relating to the keytechnologies required to achieve GHGemission reductions and fuel economyimprovements in line with legislativemeasures in the LDV segment.

Due to technological advancements and agrowing focus on zero-emission vehicles(ZEVs) in the sector, the survey aimed, inparticular, to gather responses fromsuppliers which produce components forelectric vehicles (EVs). The surveyremained open for seven weeks, and uponclosure on September 11, 2020, 21 completeresponses and 5 partial responses werereceived, equating to a response rate of 6%(of 377 total contacts). Of the respondents,20 out of 26 work for suppliers whichproduce some components for EVs, suchas batteries, motors, thermalmanagement systems and drivetrains.

CALSTART Survey of Tier 1 Automotive Suppliers with Respect to the U.S. Greenhouse GasEmission Standards for Light-duty Vehicles

Executive Summary

The survey findings indicate a high level ofconsensus amongst suppliers in regard tothe vast majority of topic areas explored.With regard to existing standards andfuture ambition, the majority ofrespondents disagree with the currentfederal administration’s policy decision toadopt the SAFE Vehicles Rule.

Disagree61.5%

Undecided23.1%

Agree15.4%

Majority of Suppliers SurveyedDisagree with Rollback ofNational Clean Car Standards

In addition to this, an overwhelmingmajority of respondents (23 out of 25)indicated that standards should be mademore ambitious post-2026, to furtherdrive innovation in the sector and to helpthe US industry to remain competitive.

CALSTART Survey of Tier 1 Automotive Suppliers with Respect to the U.S. Greenhouse GasEmission Standards for Light-duty Vehicles

Executive Summary

The vast majority of respondents (23 outof 26) also agreed that it is important tostart planning and setting targets now forbeyond 2026, to account for the long leadtime required for technologicaldevelopment, and to speed up thetransition towards low-carbon technologyuptake to support climate changeresponse. There was also consensusregarding state-level standards, with themajority of respondents (18 out of 21)stating that they would support, orpartially support, a state-led process to setmore stringent LDV standards. However, anumber of respondents indicated that asingle federal-level standard would bepreferable, from a planning perspective,and to help avoid confusion.

A supermajority of suppliers said thatclean car standards should be mademore ambitious post-2026, to furtherdrive innovation in the sector and tohelp the U.S. supplier industry remaincompetitive in an increasinglyefficient global marketplace.

Clean Car Standards Should BeMore Ambitious Post-2025

92%

Yes64%

Partially Agree20%

No16%

86% of Suppliers Support orPartially Support StatesSetting Their Own StrongerClean Car Standards

With regard to a 100% ZEV sales target for2035-40, the responses displayed a moremixed level of support. A small majority ofrespondents (14 out of 26) indicated thatthey would support the implementationof the target, to allow the US to align withglobal requirements, and to remaincompetitive. In addition, the majority ofrespondents (16 out of 26) stated thatachieving 100% ZEV sales by 2035-40 forthe LDV market is viable, indicating theexisting technical feasibility. However, ofthose that did not consider the target tobe viable, the lack of political feasibilitywas referenced.

The majority of respondents (17 out of 21)indicated that more ambitious US LDVvehicle efficiency standards tend toencourage more innovation andinvestment in the US. Therefore, thereseems to be a general consensus thatmore ambitious standards, and anincreased shift towards the uptake ofvehicle efficiency technologies, will benefitthe sector in terms of competitiveness,and in terms of enhancing innovation andinvestment.

There is also a general consensus thatpolicies which encourage the uptake ofZEVs, and hence increase innovation inthe automotive sector, would encouragejob growth in the US. However, theconsensus amongst respondents is thatthis is more likely to happen at theindustry (15 out of 21) or company level (13out of 21), rather than across the USeconomy as a whole.

Survey of Tier 1 Automotive Suppliers with Respect to the U.S. Greenhouse Gas EmissionStandards for Light-duty Vehicles

Executive Summary

62% of respondents stated that U.S.policies that encourage or force theuptake of ZEVs also encourage jobgrowth at their companies in the U.S.

Good for jobs61.9%

No impact19%

Don't know9.5%

Bad for jobs9.5%

Strong Zero Emission VehicleStandards Are Good for Jobs

For prior, existing and future standards,battery electric vehicles (BEVs) wereviewed as the most important technologyrequired to meet these legislative targets.Alongside BEVs, other EV types, includingplug-in hybrid electric vehicles (PHEVs)and fuel cell electric vehicles (FCEVs), werealso perceived as key, particularly in apost-2026 world. This indicates anincreasing recognition of the importanceof electrification in achieving the targetsset out in LDV GHG emission standards,relative to the 2018 and 2016 surveyresults.

This report captures the key findings fromthe 2020 survey, as well as providing acomparison to the 2018 and 2016 surveyfindings, which will be used by CALSTARTto inform their strategy for encouragingthe adoption of clean LDVs.

"The U.S. should aimto be in the vanguardof the zero emissiontechnologies that willbe required worldwideto enable countriesand regions to movetowards net zeroemissions."

- Anonymous supplier

Survey of Tier 1 Automotive Suppliers with Respect to the U.S. Greenhouse Gas EmissionStandards for Light-duty Vehicles

Executive Summary

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