SUV makers GM, Ford and Stellantis face US$10.5 billion in fines under stricter fuel rules

GENERAL Motors (GM), Ford Motor and Stellantis face a combined US$10.5 billion in fines from 2027 to 2032 under stricter proposed average fuel economy rules that target SUV and truck manufacturers, according to an estimate from their Washington-based trade group.

The US National Highway Traffic Safety Administration (NHTSA) has proposed a fleetwide average mandate, known as the Corporate Average Fuel Economy (Cafe) standard, of about 93 kilometres per gallon by 2032. The more stringent rules are part of a Biden administration effort to cut emissions and accelerate the country’s transition to electric vehicles.

That would disproportionately impact Detroit’s three major automakers, the American Auto Policy Council (AAPC) said in a letter to US Department of Energy, which calculates the fuel economy of vehicles for the highway safety agency as part of its separate monitoring of tailpipe pollution. Detroit automakers “will pay 74 per cent of the noncompliance penalties while they are 46 per cent of the US market”, the group said.

The penalties for GM would amount to US$6.5 billion over the five-year period, US$3 billion for Stellantis and US$1 billion for Ford, the AAPC said, noting their reliance on sales of large pickups and SUVs.

“These penalty figures are alarming given that the combined total of all civil penalties paid in the approximately 50-year history of the Cafe programme is approximately US$1.5 billion,” AAPC said.

NHTSA and the Department of Energy did not immediately respond to a request for comment. BLOOMBERG