CAR Management Briefing SeminarsFuel Economy and Greenhouse Gas Emissions:

Where does Policy go now? And, will the Market Follow?

Suppliers’ Perspective

Ann Wilson

MEMA

Senior Vice President, Government Affairs

August 1, 2017

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Original Equipment

Manufacturers Association

Automotive

Aftermarket Suppliers

Association

Heavy Duty Manufacturers

Association

Motor & Equipment

Remanufacturers

Association

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MOTOR VEHICLE PARTS SUPPLIERSARE THE LARGEST SECTOR

OF MANUFACTURING JOBS IN THE U.S.

MEMA Key Points on CAFE & GHG Standards

Suppliers Develop Innovative Technology Solutions to Help OEMs Meet the Standards

Suppliers Need Regulatory Certainty under the National Program to Preserve Long-Term Investments and Planning

Suppliers Support Further Program Flexibilities, Including More Opportunities for Off-Cycle Technologies to Be Recognized

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Global Fuel Efficiency Targets Driving Technology Evolution

Global convergence toward 2025

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OEMs & Choice –Variety of Technology Strategies is Key

• Suppliers develop and produce a variety of technology strategies for OEMs that improve vehicle performance, fuel efficiency and emissions

• Extensive R&D; test and validate technologies on a range of OEM applications and scenarios to ensure compatibility

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The Off-Cycle Program is Important to Industry

“Suppliers have a major role in providing innovative technologies allowing OEMs to meet their targets, many of which are off-cycle

improvements. Therefore, suppliers have a vested interest in making sure these technologies are easily deployed and utilized by OEMs.”

“The off-cycle program is in a unique position to incentivize technologies that may not otherwise be developed.”

“[Off-cycle technology] credits represent real world GHG reductions and fuel savings, and can be used to encourage early action that benefits

both the environment and customers.”

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Why is the Off-Cycle Credit Program Important to Suppliers?

•Real-World Emissions-Reductions• Incentivizes OEM Adoption of

Technologies•Preserves Long-term Supplier

Investments

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Recommendations for the Current Off-Cycle Program

Expand Pre-Defined Credit Menu

Allow Supplier Role in Off-Cycle Process

Improve Off-Cycle Petition Process

Remove Credit Caps

MEMA:

“The improvements needed to meet the standards will require the utilization of a variety of technologies, many of which are off-cycle improvements.”

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Off-Cycle Technology Program – Current State3 Current Pathways

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• 95% of off-cycle credits granted (in 2015)

• Significantly less risk and process to obtain menu credit

• Has not been expanded, despite technology advances

Pre-Defined Technology Credit Menu:

• Not yet used5-Cycle Test Method:

• Suppliers excluded from the application process

• Onerous data requirements and long decision processAlternative Petition

Process:

MEMA SeeksSupplier Role in Off-Cycle Process

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Possibilities:• A supplier could petition for their

technologies to be eligible for a “provisional” credit

• OEM could choose technologies from this “provisional credit menu”

• Reduces risk and need for multiple OEM applications for same technologies

Flexibilities Allow U.S. Vehicle Industry To Be Global Leaders by

Advancing Vehicle

Fuel Efficiency & Emissions

Incentivizing

InvestingProviding Certainty

Innovating

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Thank You

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