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A Swedish vehicle tester, whose technology identified discrepancies which kick-started the Volkswagen AG diesel engine scandal, is beginning to see US president Donald Trump as a plump cash cow.
While it’s generally not a good thing for the country or the planet as a whole when the American president isn’t pro-environment, any decision by the new head of state to repeal fuel-consumption regulations means that automakers can begin selling highly inefficient models for much longer than was previously anticipated. This, in turn, will lead to an increase in emissions testing technologies, as there will be a more polluting vehicle fleet over the next 10 years than anticipated.
Trump has vowed to reinstate a review of vehicle emissions and fuel economy, spending another year scrutinising rules that require companies to cut gasoline consumption, and bring MPG up to more than 50 miles to the gallon by 2025. This is intended to undermine the Obama administration’s assertions that the standards and their deadline are both effective and affordable. If this emphasis on fuel efficiency were to carry on, it would be great news for the EV sector, but not so much for efficient part manufacturers such as Borla.
While announcing his intentions to a crowd of factory workers in Michigan, president Trump sent a message to the CEOs of major automakers including General Motors, Chrysler, Fiat and Ford that they needed to give a trade-off by creating more American jobs and manufacturing plants. He blamed Obama’s efforts to preserve fuel economy standards on supposed colossal damage to the US auto industry.
Inspection company Opus provides emission testing in the States, including remote-sensing services, measuring large numbers of privately owned vehicles as they drive over public roads. In late 2014, roughly a year before Volkswagen’s emissions-cheating scandal made the news, Opus and a group of scientists carried out work which discovered readings for Volkswagen and Audi vehicles with two-litre diesel engines were significantly lighter than they were supposed to be.
As one of the biggest companies of its kind in the United States, Opus sees the nation as one of its most integral markets. The business has a market share in more than 40% of the government-contracted emission-testing industry there, and handles nearly 25million separate inspections every year. One of the Swedish firm’s biggest competitors is Japan’s Horiba Ltd., which produces testing equipment that was instrumental in blowing the lid off the Volkswagen scandal.
Donald Trump’s aforementioned pledge means that demand in America will at least stay the same, rather than decline, which would have been a risk for these testing firms if Obama’s efficiency standards had gone ahead. While it’s unclear exactly what Trump has in store for the auto industry, it’s more or less certain that emission testing isn’t the biggest of his concerns. Ostensibly, the president is much more concerned with improving the market position of the American auto industry, and loosening environmental requirements. This is guaranteed to lead to higher pollution and emissions in the country, and eventually demand for pollution-reduction programs.