https://www.cnbc.com/2024/03/23/ford-gm-stellantis-to-benefit-from-biden-emissions-rules.html Skip Navigation logo * watchlive logo Markets * Pre-Markets * U.S. Markets * Currencies * Cryptocurrency * Futures & Commodities * Bonds * Funds & ETFs Business * Economy * Finance * Health & Science * Media * Real Estate * Energy * Climate * Transportation * Industrials * Retail * Wealth * Sports * Life * Small Business Investing * Personal Finance * Fintech * Financial Advisors * Options Action * ETF Street * Buffett Archive * Earnings * Trader Talk Tech * Cybersecurity * Enterprise * Internet * Media * Mobile * Social Media * CNBC Disruptor 50 * Tech Guide Politics * White House * Policy * Defense * Congress * Equity and Opportunity CNBC TV * Live TV * Live Audio * Business Day Shows * Entertainment Shows * Full Episodes * Latest Video * Top Video * CEO Interviews * CNBC Documentaries * CNBC Podcasts * CNBC World * Digital Originals * Live TV Schedule Watchlist Investing Club * Trust Portfolio * Analysis * Trade Alerts * Meeting Videos * Homestretch * Jim's Columns * Education * Subscribe * Sign In PRO * Pro News * Pro Live * Full Episodes * Stock Screener * Market Forecast * Options Investing * Chart Investing * Subscribe * Sign In Menu * Make It * select + ALL SELECT + Credit Cards + Loans + Banking + Mortgages + Insurance + Credit Monitoring + Personal Finance + Small Business + Taxes + Help for Low Credit Scores + Investing + SELECT + All Credit Cards + Find the Credit Card for You + Best Credit Cards + Best Rewards Credit Cards + Best Travel Credit Cards + Best 0% APR Credit Cards + Best Balance Transfer Credit Cards + Best Cash Back Credit Cards + Best Credit Card Welcome Bonuses + Best Credit Cards to Build Credit + SELECT + All Loans + Find the Best Personal Loan for You + Best Personal Loans + Best Debt Consolidation Loans + Best Loans to Refinance Credit Card Debt + Best Loans with Fast Funding + Best Small Personal Loans + Best Large Personal Loans + Best Personal Loans to Apply Online + Best Student Loan Refinance + SELECT + All Banking + Find the Savings Account for You + Best High Yield Savings Accounts + Best Big Bank Savings Accounts + Best Big Bank Checking Accounts + Best No Fee Checking Accounts + No Overdraft Fee Checking Accounts + Best Checking Account Bonuses + Best Money Market Accounts + Best CDs + Best Credit Unions + SELECT + All Mortgages + Best Mortgages + Best Mortgages for Small Down Payment + Best Mortgages for No Down Payment + Best Mortgages with No Origination Fee + Best Mortgages for Average Credit Score + Adjustable Rate Mortgages + Affording a Mortgage + SELECT + All Insurance + Best Life Insurance + Best Homeowners Insurance + Best Renters Insurance + Best Car Insurance + Travel Insurance + SELECT + All Credit Monitoring + Best Credit Monitoring Services + Best Identity Theft Protection + How to Boost Your Credit Score + Credit Repair Services + SELECT + All Personal Finance + Best Budgeting Apps + Best Expense Tracker Apps + Best Money Transfer Apps + Best Resale Apps and Sites + Buy Now Pay Later (BNPL) Apps + Best Debt Relief + SELECT + All Small Business + Best Small Business Savings Accounts + Best Small Business Checking Accounts + Best Credit Cards for Small Business + Best Small Business Loans + Best Tax Software for Small Business + SELECT + All Taxes + Filing For Free + Best Tax Software + Best Tax Software for Small Businesses + Tax Refunds + Tax Brackets + Tax Tips + Tax By State + Tax Payment Plans + SELECT + All Help for Low Credit Scores + Best Credit Cards for Bad Credit + Best Personal Loans for Bad Credit + Best Debt Consolidation Loans for Bad Credit + Personal Loans if You Don't Have Credit + Best Credit Cards for Building Credit + Personal Loans for 580 Credit Score or Lower + Personal Loans for 670 Credit Score or Lower + Best Mortgages for Bad Credit + Best Hardship Loans + How to Boost Your Credit Score + SELECT + All Investing + Best IRA Accounts + Best Roth IRA Accounts + Best Investing Apps + Best Free Stock Trading Platforms + Best Robo-Advisors + Index Funds + Mutual Funds + ETFs + Bonds * USA * INTL * watchlive Search quotes, news & videos Watchlist SIGN IN logo Markets Business Investing Tech Politics CNBC TV Watchlist Investing Club PRO Menu Autos What investors should know about the U.S. easing vehicle emissions rules Published Sat, Mar 23 20248:00 AM EDT thumbnail Michael Wayland@MikeWayland WATCH LIVE Key Points * New Biden administration standards for tailpipe emissions are expected to be a win for legacy automakers such as GM, Ford and Stellantis. * The new regulations come as adoption of electric vehicles in the U.S. has been slower than expected. * Tesla and environmental groups criticized the standards, which may be designed in part to help Biden with key constituencies in the presidential election. President Joe Biden speaks at the United Auto Workers political convention at the Marriott Marquis in Washington, D.C., Jan. 24, 2024. Saul Loeb | AFP | Getty Images DETROIT -- The Biden administration's decision to ease its timeline for all-electric vehicle adoption and give automakers more ways to meet new tailpipe emissions standards is expected to be a win for legacy automakers. The new Environmental Protection Agency rules released Wednesday aim to cut tailpipe emissions by 49% between model years 2027 and 2032. The EPA set a target for EVs to make up at least 35% of new vehicle sales by 2032. The standards are less ambitious than proposed rules released last year, which targeted a 56% reduction in emissions by 2032 and called for EVs to represent 67% of new vehicles by that year. The lower expectation for EV adoption comes amid slower-than-expected sales of the vehicles, which can cost tens of thousands of dollars more than their traditional gas counterparts. The EPA's new strategy for cutting tailpipe emissions doesn't focus only on EVs. It took into account more efficient gasoline engines, hybrids and plug-in hybrid electric vehicles. The EPA's percentage targets for EV adoption are not mandates but expectations for how automakers could meet the emissions regulations. The target range for the share of EV sales in the market in 2032 is between 35% and 56%. The EPA said the standards will avoid more than 7 billion tons of carbon emissions and provide nearly $100 billion of annual net benefits to society. It said those include $13 billion of annual public health benefits due to improved air quality, along with $62 billion in reduced annual fuel costs and maintenance and repair costs for drivers. Here are some key takeaways about what the new guidelines mean for automakers, investors and the environment. A win for Detroit Automotive officials and Wall Street analysts are touting the altered rules as a major win for legacy automakers, specifically the traditional Detroit automakers General Motors, Ford Motor and Chrysler parent Stellantis, which largely rely on big SUVs and trucks to make profits. "We view this development as positive for traditional US automakers, since the new rules put less pressure on them to ramp up EV production in the near term, and could even potentially enable them to reduce further EV capex and R&D," Deutsche Bank analyst Emmanuel Rosner said Thursday in an investor note. President Joe Biden, with General Motors CEO Mary Barra, looks at a Chevrolet Silverado electric vehicle as he tours the 2022 North American International Auto Show at Huntington Place Convention Center in Detroit, Michigan, on Sept. 14, 2022. Biden is visiting the auto show to highlight electric vehicle manufacturing. Mandel Ngan | Afp | Getty Images John Bozzella, president and CEO of the Alliance for Automotive Innovation, a lobbying group that represents most automakers in the U.S., agreed. "Moderating the pace of EV adoption in 2027, 2028, 2029 and 2030 was the right call because it prioritizes more reasonable electrification targets in the next few (very critical) years of the EV transition," he said. The new rules also are a victory for the Detroit-based United Auto Workers union, which has raised concerns about how the transition from internal combustion engines to EVs could affect jobs. "By taking seriously the concerns of workers and communities, the EPA has created a more feasible emissions rule that protects workers building [internal combustion engine] vehicles, while providing a path forward for automakers to implement the full range of automotive technologies to reduce emissions," the UAW said in a statement. Stocks for the Detroit automakers, as well as others such as U.S. hybrid leader Toyota Motor, closed higher Wednesday following the announcement. Tesla, some green groups unhappy While the new standards sparked relief in Detroit, others weren't too pleased. The new rule "falls far short of what is needed to protect public health and our planet. EPA is giving automakers a pass to continue producing polluting vehicles," said Chelsea Hodgkins, senior policy advocate at left-leaning consumer rights group Public Citizen. Martin Viecha, vice president of investor relations for the biggest U.S. EV maker, Tesla, agreed in a post on X: "Unfortunately, people use plug-in hybrids mainly as gas cars, which means their CO2 emissions are far worse than official EPA or WLTP ratings suggest." "Just like officially rated energy consumption of EVs has been getting closer and closer to reality, same should be done for plug-in hybrids," he added. Environmental group Sierra Club, which has condemned automakers such as Toyota for their reliance on hybrids, broke with past statements and hailed the standards. The organization, which endorsed President Joe Biden for reelection, said the new rules are "one of the most significant actions his administration can take on climate change." Political implications Several experts and Wall Street analysts were quick to point out that the new standards could help Biden with some groups in his reelection campaign. "We surmise this slight leniency appeases to lobbying on behalf of automakers -- or more pointedly, the auto unions -- which have understandably viewed the aggressive efforts (e.g., the IRA bill turned law) by the Biden administration to 'electrify' the auto industry as a threat to their jobs in conventional auto manufacturing plants," Loop Capital analyst Chris Kapsch said in an investor note. Morgan Stanley analyst Adam Jonas agreed in a separate note: "The delay and flexibility baked into the new timeline could be part of an effort to appease the UAW, a key Democratic constituency historically concerned about the rise of EVs." The move could help the president with the UAW, which endorsed Biden for reelection in January. It could also be designed to boost him in Michigan -- home of GM, Ford and many other suppliers -- which is expected to play a pivotal role as a swing state in this year's presidential election. Not over yet The tailpipe emissions regulations are only one part of the federal government's policies that aim to boost the efficiency of vehicles. Automakers are still awaiting the "Corporate Average Fuel Economy," or CAFE, standards from the National Highway Traffic Safety Administration, a part of the Department of Transportation, for 2027 to 2032 model-year vehicles. CAFE standards set out to regulate how far vehicles must travel on a gallon of fuel. NHTSA in 2023 proposed an industry fleet-wide average of approximately 58 miles per gallon for passenger cars and light trucks in model year 2032, by increasing fuel economy by 2% per year for passenger cars and by 4% annually for light trucks. The CAFE standards are expected to be finalized later this year. There's also the California Air Resources Board, which can set its own standards for emissions and fuel economy - a power former President Donald Trump attempted to take away. For years, automakers such as GM have argued there should be one national standard for fuel economy and greenhouse gas emissions to help them plan and make it easier to comply. "While we review the details, we encourage continued coordination across the U.S. federal government and with the California Air Resources Board to ensure the auto industry can successfully transition to electrification," GM said in a statement. -- CNBC's Michael Bloom contributed to this report. 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