Title page 1

Contents 2

KEY TAKEAWAYS 1

INTRODUCTION 4

KEY ISSUES FOR CONSIDERATION 4

Is the Industry Important? 4

Do We Need a Strategy? 5

How Focused Should the Strategy Be? 6

INSTITUTIONAL CAPACITIES 7

COST REDUCTION 9

Generic Policies 9

Currency 10

Productivity Improvement 10

Industry-Specific Policies 11

Product Regulation 11

Sales Regulation 12

Technical Assistance to SMM Auto Suppliers 13

Supporting SMM Integration and Digitalization Activities 13

PRODUCT DEVELOPMENT 14

Generic Policies 14

Increase Incentives for R&D Investment 14

Industry-Focused Workforce Training 14

Sector-Specific Policies 14

Public-Private Research Support 14

EV Product Development 16

Product Regulation, Especially for Autonomous Vehicles 16

Permit Customers, Automakers, and App Developers Access to Vehicle Data 17

STRENGTHEN KEY INDUSTRY INPUTS, INCLUDING AGGLOMERATION ECONOMIES AND SKILLS 17

Generic Policies 18

Support the Creation of Industry-Focused and -Led Industrial Colleges 18

Support Expansion of Critical Technology Degree Programs 18

Prioritize Community Colleges and Robotics Education 19

Sector-Specific Policies 19

Invest in Regional Auto Clusters 19

MARKET SCALE 20

Sector-Specific Policies 20

Ban Chinese Motor Vehicle Imports and U.S. Production 20

USMCA 22

Mexico 22

Canada 24

Tariffs 25

Domestic Market Integration 25

ROADWAY INFRASTRUCTURE 26

Increase the Gas Tax and Use Proceeds to Expand Highway Funding 26

Prioritize Deployment of Intelligent Transportation Systems 27

Empower States to Expend Highway Trust Funds 28

Support the Deployment of EV Charging Infrastructure 29

CONCLUSION 29

ENDNOTES 30

Figure 1. Robot density per 10,000 workers in the automotive sector, 2024 11

Figure 2. Ratio of fully burdened wages in auto manufacturing relative to the economy-wide average, 2023 23

Boxes 7

Box 1. Foreign Auto Industry Strategies 7

Box 2. What Is an Industrial Strategy for Competitiveness? 8

Box 3. Restoring U.S. EV/EV-Battery Leadership 15