The Impacts of Fuel Economy and Vehicle GHG Standards on Innovation, Investment, American Manufacturing, and Jobs

The Trump administration is taking action to deeply weaken America’s world-leading fuel economy and vehicle greenhouse gas standards. That action is bad for workers and the economy.

March 30, 2020

The BlueGreen Alliance produced a detailed analysis of the impacts the soon-to-be finalized proposal from the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) to rollback clean car standards will have on domestic innovation, technology deployment, manufacturing, and jobs. Released in August 2019, Tech@Risk provided a detailed snapshot of today’s vehicle technology manufacturing jobs, and estimated the impact on future jobs and job growth in the industry if standards are weakened. The report identified significant negative impacts from the EPA’s proposed rule. Specifically the report found:

  • At least 89,000 future jobs could be lost or foregone as a result of the rollback.
  • The threat appears particularly acute for those that make the most advanced technologies and materials, but a rollback threatens jobs and investment across the industry.
  • Deeply weakening the standards significantly slows adoption of advanced technologies in almost every vehicle subsystem and cuts demand for products made by hundreds of manufacturers and hundreds of thousands of workers all across the country

The BlueGreen Alliance’s analysis is consistent with data from the agencies themselves in their Notice of Proposed Rulemaking that found rolling back standards would cut industry investment in vehicle components and technology by around $30 billion per year and result in 50,000-60,000 fewer manufacturing jobs in the industry.

Additional BlueGreen Alliance research explored the impact of strong clean vehicle standards on investment by automakers in the United States since 2008. Driving Investment: How Fuel Efficiency is Rebuilding American Manufacturing tracked investment in the nation’s automotive plants over the past decade as automakers implemented current fuel economy standards. The report illustrated how standards drive enhanced manufacturing activity, and showed how what are often described as the “costs” of compliance with clean vehicle standards represent a multi-billion dollar reinvestment in American manufacturing and jobs nationwide. Specifically the report found:

  • A total of $76 billion in new and promised investment in the nation’s automotive plants since 2008.
  • As of 2018, U.S. automakers had invested $64 billion in facilities across the country, completing 258 investments at 100 factories, with an additional $12 billion in investments in 37 facilities underway or promised. 

While some of that $76 billion represents business-as-usual investment, a significant portion is new, added, or enhanced investment in the innovative products and manufacturing processes developed to meet the nation’s commonsense fuel economy and greenhouse gas standards. View a visualization of those investments here

Driving Investment builds on a May 2017 report, Supplying Ingenuity II: U.S. Suppliers of Key Clean Fuel-Efficient Vehicle Technologies, from the BlueGreen Alliance and Natural Resources Defense Council (NRDC), which detailed the breadth of U.S. manufacturing engagement in building cleaner cars. The report illustrated how, when the auto industry emerged from the last recession, strong standards—together with policies that encouraged retooling factories to build a new generation of efficient cars, SUVs, and trucks in the United States—helped rebuild a stronger industry, secure jobs, and secure a return on taxpayer investments. The report found:

  • Following the last recession the auto industry brought back jobs and saw a dramatic return to profitability and record sales, while also successfully implementing the current national fuel economy and greenhouse gas standards across all types and sizes of vehicles.
  • More than 288,000 workers in 1,200 factories and engineering facilities in 48 states are building the components, materials, and technology needed to make today’s vehicles more fuel efficient than ever.
  • Greatly weakening the standards risks shipping investment in the next generation of technology overseas and puts manufacturing and jobs in the industry in danger.

You can explore automotive manufacturing in America by component and technology using our interactive map, and see the economic reach of enhanced investment in a new generation of cleaner, more fuel-efficient vehicles.