GM Pockets $20B as Trump Guts CAFE Through 2031
The Trump administration just released finalized a new set of federal emissions rules covering passenger cars and light trucks, unwinding the Corporate Average Fuel Economy (CAFE) targets set in 2024. The relaxed rules cover new vehicles through the 2031 model year, and GM stands to be the single biggest beneficiary.
According to the U.S. Department of Transportation, GM was on track to spend $31.7 billion on compliance technology through 2031 under the prior rules, a figure Reuters reported. The revised standards are expected to cut that bill by $20.4 billion, per the Transportation Department. The new rules take effect in December.
Those savings represent technology investments GM would otherwise have had to make — additional fuel-saving hardware or increased EV production — to meet the tougher fleet-average targets. Now it doesn't have to.
GM, for its part, endorsed the change, telling the GM Authority, it supports the "intention to better align fuel economy standards with market realities."
GM is far from alone at the trough. The Trump administration pegs the average technology savings near $1,289 a vehicle, adding up to $60.6 billion industry-wide through 2031. NHTSA estimates Stellantis will trim $6.6 billion from its costs and Ford $5.8 billion. Toyota is projected to save $4.5 billion and Honda $4.1 billion.
NHTSA also forecasts a fleet average of roughly 34.9 mpg by 2031 under the eased standards, and the agency claims consumers will save roughly $138 billion over five years.
Two less-publicized provisions will reshape how automakers game the system. The inter-manufacturer CAFE credit trading program is being eliminated with the 2028 model year, ending the practice of buying compliance from cleaner competitors. And vehicle classification rules shift starting with the 2030 model year, as NHTSA aims to reduce the incentive for manufacturers to tweak crossovers and other vehicles purely to slot them into the less stringent light-truck category.
Whether any of the projected $1,289 per vehicle actually reaches the buyer is a separate question entirely.
[Images: GM]
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These decisions should be made by scientists, NOT politicians!
"GM was on track to spend $31.7 billion on compliance technology through 2031."
I'll just mention, that expenditure would have gone into research and development, and that would have driven U.S. manufacturing innovation. On the industrial side, R&D is necessary for U.S. manufacturers to remain competitive in the world. It's absolutely no surprise China is running rings around us.
The prospective $ savings GM is looking forward to hasn't impressed the stock market. Year-to-date return of -5.65%. -7.05% in the last month. PE 20:1, inflated by the falling share price.
Not to be insulting by any stretch, but it has never been like Mary Barra to get out ahead of anything. She's not an innovator and not a risk taker. She's a good engineer.
Honestly - in that industry, which I worked in for decades, being regulated is like having a security blanket. You can be mediocre, blame it on regulation, and still make a buck. And with the federal government now digging an even deeper moat around GM and Ford, it's clearly suppressing American innovation and excellence.