GM proposes a new path to California’s emissions targets
General Motors (GM.N) on Wednesday backed the overall emissions reductions in the 2019 California deal with other major automakers, but urged the Biden government to give automakers more flexibility to meet the CO2 reduction target by 2026.
GM’s position, outlined in a letter from Chief Executive Mary Barra to the head of the Environmental Protection Agency, Michael Regan, represented the recent shift in U.S. automaker # 1’s vehicle emissions policy.
Through November, GM supported efforts by the Trump administration to prevent California from setting stricter emissions standards than the federal government. Wednesday’s letter followed a call between Barra and Regan on Tuesday.
The major automakers in the United States are all faced with the challenge of protecting the profits of petroleum-powered trucks and SUVs without clashing with a government committed to stronger climate change or investors demanding more corporate action to reduce emissions.
Ford Motor Co (FN), Honda Motor Co (7267.T), Volkswagen AG (VOWG_p.DE) and BMW (BMWG.DE) entered into a voluntary agreement with California in July 2019 to reduce vehicle emissions over the 2026 model years allow them to meet a single national standard.
According to the California standard, GM and other automakers would not be complying with the regulations for the current 2021 and 2022 model years. The industry’s vehicle lineups set for production had been aimed at meeting less demanding goals of the Trump administration.
GM suggests automakers ramp up California greenhouse gas standards by 2023 and then go beyond proposed California emissions targets for 2024-2026 to reduce overall emissions by the same amount for 2020-2026.
Companies “could meet higher standards of performance through increased sales of all-electric vehicles in the later part of the program,” wrote Barra in her letter.
The industry would then be prepared for 2027-2035 regulations that “need to focus on the use of full battery electric vehicles,” wrote Barra.
President Joe Biden has proposed $ 174 billion to bolster electric vehicles and charging infrastructure, including $ 100 billion in discounts. A Senate panel voted on May 26 to remove the cap on electric vehicle tax credits and raise it to $ 12,5000 per vehicle for unionized vehicles in U.S. factories. Republicans have spoken out against subsidies for electric vehicles.
Environmental Defense Fund President Fred Krupp praised GM’s announcement, saying it was “a signal that progress toward a cleaner future is unstoppable”.
“AN EMISSION-FREE FUTURE”
GM has outlined ambitious plans to expand its electric vehicle offering, investing $ 27 billion to bring 30 new electric vehicles to market worldwide by 2025, and aims to cease sales of gasoline-powered cars by 2035.
“We believe that an electric vehicle compliance path is a key component in putting the industry on an irreversible path toward a zero-emissions future that can only be achieved with a zero-exhaust light fleet,” wrote Barra.
In the short term, like its competitors Ford Motor Co and Stellantis NV (STLA.MI), GM will generate most of its profits from selling large, petroleum-powered pickup trucks and sports companies in the United States.
GM last week announced plans to expand production of its largest pickup trucks by 1,000 vehicles per month to meet demand.
The average greenhouse gas emissions from new vehicles sold in the US rose in 2019 due to the shift in consumers towards pickups and larger SUVs.
The Trump administration completed a reset of the average fuel economy standards for U.S. companies in 2020, which requires an annual efficiency increase of 1.5% through 2026, well below the 5% annual increase included in the rules rejected by the Obama administration.
The Center for Biological Diversity estimates the California deal will cut fuel consumption by 3.7% year over year between 2022 and 2026.
The Biden administration plans to announce proposed revisions to fuel economy and greenhouse gas emissions requirements in the US by July. Some Democrats want Biden to reintroduce the tougher rules of the Obama era.
EPO Administrator Regan also spoke to senior executives at Stellantis and Toyota on Monday.
“These talks were constructive as the agency is pushing ahead with measures to combat emissions from cars and light commercial vehicles,” said EPA spokesman Nick Conger on Wednesday.
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