Truck OEMs | EPA 27 Update Provides More Flexibility

研报英文原文证据摘录

Truck OEMs | EPA 27 Update Provides More Flexibility

gives OEMs

a more workable bridge into '27. A hard stop on legacy engines seems less likely with a small

carve-out of pre-2027 engines without eating credits, plus NCPs for engines that are close but

not fully compliant. As a result, the '27 supply cliff is less likely, and the pre-buy incentive is less

about scarcity risk and more about price/warranty timing.

Non-conformance penalties an interesting influence on pricing. The NCP framework allows

manufacturers whose engines cannot yet meet the new NOx standard to continue selling

MY26 engines in MY27 by paying a per-engine penalty, provided NOx does not exceed 200 mg/

hp-hr (the MY26 standard). Penalties scale with the shortfall: up to c$4.3k in MD and $6.8k in

HD vs zero if the engine is compliant. In Heavy Duty, for example, the penalty is on a sliding

scale from $0 at 35mg to $6.8k at 200mg. This gives lower NOX-emitting '26 engines a pricing

edge in '27.

What certification data shows about current NOX emissions. Using EPA MY26 heavy-duty

highway certification data, the ranking on steady-state NOx results and SS certified results is

clear. Paccar (MX engines) has the single lowest reading in the dataset, with the next family

clustered around Daimler (Detroit). Volvo sits in the middle of the pack. Cummins is the clear Michael Aspinall * | Equity Analyst

laggard, with all four sampled engine families clustered much higher. As a result, Paccar and +44 (0) 20 7029 8431 | maspinall@jefferies.com

Daimler look best positioned for a smooth EPA27 transition, Volvo has enough efficient engine Stephen Volkmann, CFA ^ | Equity Analyst

families to work with, and Cummins has the furthest to travel. +1 (212) 284-2031 | svolkmann@jefferies.com