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Federal Register / Vol. 86, No. 213 / Monday, November 8, 2021 / Notices
The smaller production volume of American-owned manufacturers relative to global competitors hinders American manufacturers ability to invest in R&D
to the same extent as their competitors.
Production must increase in order to encourage additional R&D investments, as TEXT REDACTED.173

It is necessary and appropriate to focus on increased American-owned production because, with respect to the specific automotive technologies that are important for national security, American-owned producers invest R&D
dollars domestically, whereas foreignowned producers tend to invest abroad.
To illustrate, in 2017 with respect to
spending in the United States, TEXT
REDACTED.174 TEXT REDACTED.175
TEXT REDACTED.176 As shown in Table 15 TEXT REDACTED are the most common non-U.S. locations for foreign-owned producers R&D
investments related to vehicle autonomy, connectivity, electrification, and lightweighting.177

Table 15: Fore n-Owned U.S. Producers., R&D Activities in Non-U.S. Locations
Autonomy
TEXT REDACTED

Connectivity
TEXT REDACTED

Electrification
TEXT REDACTED

Lightweighting
TEXT REDACTED

Increasing the United States overall share of global R&D investments is essential to national security. Industry analysts expect that by 2023 about $255
billion in R&D and capital expenditures will have been spent globally on electric vehicles.178 An additional $61 billion will be spent on autonomous vehicle technologies by the same year.179 As advanced automotive technologies become a battleground for the industry, R&D budgets will determine how effectively automobile producers can compete and which nations will control cutting-edge technologies for both commercial and military applications.180

The pressure for R&D spending is so great that unprecedented sums of money are being poured into electric and autonomous vehicles years before those technologies are fully cost-competitive in the market.181 For American-owned and foreign-owned producers in the United States, U.S. R&D activities are TEXT REDACTED.182
PwCs 2015 Global Innovation 1000
Automotive Industry Findings examined in detail the regional locations where automotive companies are conducting R&D and concluded that the automotive industrys fastest-growing and most competitive markets are now in the Asia Pacific region, dominated by China as the worlds largest automobile
market.183 Even more noteworthy, the study, which examined R&D spending by location rather than by where companies were headquartered, concluded that the Asia Pacific region is increasingly where automotive innovation is concentrated.184 From 2007 to 2015, expenditures on automotive R&D conducted in Asia increased by 70 percent, surpassing North America and Europe to become the largest regional hub of such expenditures.185 During the same period, North American automotive R&D expenditures only increased by 23
percent.186
The PwC study also found that Chinas share of total automotive R&D

173 U.S. Producers Survey Responses, Questions 2b and 10.
174 U.S. Producers Survey Responses, Question 10a.
175 Id.
176 Id.
177 U.S. Producers Survey Responses, Question 10b.
178 Irwin, EV, AV Spending in Slowing Market Points to Pile Up, supra.
179 Id.
180 For example, Toyota recently announced that it will invest a record 1.08 trillion Yen in 2018 to expedite the development of autonomous driving technology, connected cars and electric vehicles, representing a 30% increase from five years earlier.
Toyota pours $22bn into R&D as Apple and Google
Close in, Nikkei Asian Review, May 10, 2018, https asia.nikkei.com/Business/Companies/
Toyota-pours-22bn-into-R-D-as-Apple-and-Googleclose-in. Ford also recently announced that it will significantly increase its planned investments in electric vehicles to $11 billion by 2022 and have 40
hybrid and fully electric vehicles in its model lineup. The investment figure is sharply higher than Fords previously announced target of $4.5 billion by 2020 and is mostly derived from the costs of developing dedicated electric vehicle architectures.
Ford Plans to Invest $11 Billion to Electrify Its Most Iconic Vehicles, Fortune, Jan. 15, 2018, http
fortune.com/2018/01/14/ford-11-billion-electric-carinvestment/. And, according to BMWs 201718
annual report, the company planned to allocate between 6.5 and 7 percent of its 2018 gross revenue to R&D, above its usual range of 5 to 5.5 percent.

BMW to Spend Record Amount on R&D to Prepare for Electric Cars, Self-Driving Cars, Assembly Magazine, Mar. 23, 2018, https
www.assemblymag.com/articles/94194-bmw-tospend-record-amount-on-rd-to-prepare-for-electriccars-self-driving-cars.
181 Irwin, EV, AV Spending in Slowing Market Points to Pile Up, supra.
182 U.S. Producers Survey Responses, Question 10.
183 PwC, 2015 Global Innovation 1000
Automotive Industry Findings, 2016, https
www.strategyand.pwc.com/media/file/Innnovation1000-2015-Auto-industry-findings-infographic.pdf.
184 Id.
185 Id.
186 Id.

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Source: U.S. Producers Survey Responses, Question lOb.