GM warns US emissions rules could cost industry $100 billion in penalties in 2031

By David Shepardson

WASHINGTON (Reuters) -General Motors has warned that the Biden administration’s vehicle emissions rules could cost the auto industry $100 billion in penalties in 2031, and $300 billion over a five-year period, according to a document made public this week.

The previously unreported presentation, posted on a White House website, said the total amount of penalties depends on an Energy Department proposal to revise the petroleum-equivalent fuel economy rating for EVs in the National Highway Traffic Safety Administration’s (NHTSA) Corporate Average Fuel Economy (CAFE) program.

GM executive David Strickland met on July 17 with White House Office of Management and Budget officials about the CAFE proposal and the automaker presented the slide, according to the White House website.

NHTSA is set to release its proposal to hike CAFE requirements for 2027 and beyond as early as Friday after the White House signed off on Tuesday. The White House did not immediately respond to a request for comment on Thursday.

GM, which in 2021 vowed to halt the sale of new gasoline-powered vehicles by 2035, said earlier this month it could face compliance challenges under various vehicle emissions rules. GM said on Thursday it looks forward to “further and increased technical dialogue with the EPA and the White House as the rule is finalized and await review of NHTSA’s upcoming CAFE proposal.”

NHTSA’s plan will follow the Environmental Protection Agency’s April proposal to toughen 2027-2032 standards, requiring a 56% emissions cut that would result in 67% of new vehicles by 2032 being EVs.

GM’s document said automakers hitting 67% of vehicles as EVs by 2032 would be “insufficient for CAFE compliance.”

A group representing major automakers including the Detroit Three wants EPA to significantly soften its requirements, calling it “neither reasonable nor achievable.” Toyota Motor (NYSE:) called the EPA proposal “extreme and outside historical norms.”

Chrysler parent Stellantis and GM paid a total of $363 million in civil penalties for failing to meet CAFE requirements for prior model years, Reuters first reported in June.

The record-setting penalties include $235.5 million for Stellantis for the 2018 and 2019 model years and $128.2 million for GM covering 2016 and 2017.