EPA announces new fuel emission standards

Let's talk about the future of the automotive industry. Because the EPA made a major announcement in March 2024. The announcement will have a massive ripple effect across the supply chain of the automotive industry.

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This will IMPACT EVERYONE:

-Big Auto

-Automotive Parts Suppliers / Manufacturers

-Gas Stations

-Fleet Operators

-Home Builders

-Consumers

-Commercial Building Landlords

-Fast Food Operators

-Retail Stores

-and the list goes on!

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What's in the Rule?

The EPA is setting fuel emission standards for Model Years 2027 through 2032. A few highlights from the new standards:

1 - Light Duty Vehicles - 56% reduction in fleet average greenhouse gas emissions target levels relative to the existing 2026 standards

2 - Medium Duty Vehicles - 44% reduction in fleet average greenhouse gas emissions target levels relative to the existing 2026 standards

3 - Between 2027 and 2055, the proposed standards would cumulatively avoid 7.3 billion metric tons of CO2.

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Context

Transportation is largest category of emissions in the US at 27% of Total Emissions.

➡ Within the transportation sector, passenger cars and trucks are the largest contributor, at 58% of all transportation emissions.

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Things to like about the EPA Rule

➡ Performance based standards allow car manufacturers to determine which mix of vehicles align with their customer's needs.

➡ The Rule provides certainty to auto companies and their suppliers to make meaningful investments in scaling up EV parts and technologies. The market will be required to transition from Internal Combustion Engines (ICE) to electric and hybrid vehicles.

➡ Massive benefits to climate change by reducing a significant source of emissions, soot, and smog in the US.

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Takeaways for Automotive Suppliers

➡ The Key Question for automotive suppliers is what role will your company play as the automotive industry makes its climate transition?

➡ Evaluate your product catalog. Which products are used only in ICE vehicles?

➡ Forecast your demand and you'll see it decreasing as these rules come into effect. Then collaborate with customers on new parts that are used in EV/Hybrids that you can start designing and producing.

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Read the full EPA rules: