ERM was commissioned to evaluate the connection between the implementation of heavy-duty engine emission regulations and changes in heavy-duty vehicle (HDV) manufacturing employment, production, and sales. Since the regulations are finalized years in advance of their implementation, consumers can anticipate the regulation and react accordingly, which might cause them to over-purchase HDV models prior to the regulation going into effect and under-purchase vehicles right after the regulation goes into effect.

This analysis uses a difference-in-difference econometric model informed with federal, monthly datasets for sales, production, and manufacturing employment of heavy-duty vehicles, automobiles, and light trucks to assess whether past engine regulations impacted the heavy-duty vehicle manufacturing industry. The results of the analysis found the following:

  • There is no evidence of a pre-buy/low-buy impact on HDV manufacturing employment around the 2004, 2007, 2010, and 2014 engine emission standard regulations.
  • The models for production and sales generally do not support the pre-buy/low-buy hypothesis. While some significant effects are observed, there is insufficient evidence to definitively attribute the impacts to the regulation.
  • Pre-buy/low-buy patterns for Class 8 vehicle sales surrounding the 2007 regulation suggest the effects are due to factors other than the regulation including HDV sales being a leading indicator for recessions.
  • A comparison of the results from previous studies that have estimated the pre-buy/low-buy effect of the 2007 engine standard regulation shows that the results are inconsistent across studies with respect to the timing, duration, and magnitude of the impacts, casting doubt on the robustness of the results.

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