Trump’s U-turn on fuel economy rules lifts European carmakers' shares

[FRANKFURT] Shares of European carmakers jumped between 2.5 per cent and 5 per cent in early on Thursday (Dec 4) trading after US President Donald Trump proposed slashing fuel economy standards finalised by his predecessor Joe Biden.

The Trump administration cast the change, aimed at making it easier for automakers to sell petrol-powered cars, as a way to lower consumer costs in the US, a trader said.

By around 0930 GMT, shares in Porsche were up more than 5 per cent, Mercedes and Volvo Car gained nearly 4 per cent, while Renault rose 3.3 per cent. Stellantis’ Milan-listed and Paris-listed shares rose around 2.7 per cent after surging nearly 8 per cent on Wednesday.

Stellantis CEO Antonio Filosa said in a statement he looked forward to collaborating with the US National Highway Traffic Safety Administration on “environmentally responsible policies that also allow us to offer our customers the freedom to choose the vehicles they want at prices they can afford”.

Volvo Cars said it was too early to speculate on consequences of the regulatory change. While it seeks to become a fully electric car company and aims to reach net zero greenhouse gases by 2040, the company said earlier this year it would start at one point production of multiple hybrids in the US, with one as late as 2029.

The proposed change was not unexpected, Equita analyst Martino De Ambroggi said, but it should have a positive effect for the whole sector. He also noted the reports that the European Union may soften or significantly modify its 2035 electrification targets.

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Industry sources said on Wednesday that the European Commission may delay the announcement of its support package for the EU car industry, which carmakers are hoping could include a revision of a 2035 ban on the sale of combustion engines. REUTERS