GM, Stellantis Face $9.5 bln in US Fuel Economy Fines

[silvrsvt]

The proposal by U.S. President Joe Biden's administration to hike fuel economy standards through 2032 would cost General Motors (GM.N) $6.5 billion in fines and Chrysler parent Stellantis (STLAM.MI) $3 billion, according to a letter seen by Reuters.

 

The American Automotive Policy Council, representing GM, Stellantis and Ford Motor (F.N), said in a letter to the U.S. Energy Department on Friday that the size of the expected penalties for not meeting proposed Corporate Average Fuel Economy (CAFE) requirements are "alarming."


Ford separately faces about $1 billion in penalties, the letter said, while Volkswagen (VOWG_p.DE) faces upwards of $1 billion, the most among foreign automakers.

 

https://www.reuters.com/business/autos-transportation/gm-stellantis-face-95-billion-fuel-economy-fines-letter-2023-10-02/

 

 

[akirby]

Holy misleading title Batman….

[rperez817]

8 minutes ago, akirby said:

Holy misleading title Batman….

 

The headline title of the Reuters article linked in the original post has the phrase "industry group letter" after "GM, Stellantis face $9.5 bln in US fuel economy fines". It is not misleading.

[akirby]

48 minutes ago, rperez817 said:

 

The headline title of the Reuters article linked in the original post has the phrase "industry group letter" after "GM, Stellantis face $9.5 bln in US fuel economy fines". It is not misleading.

It implies they are facing fines today for infractions and that’s patently false.  They are saying that’s what could happen if the Biden proposal on CAFE changes is enacted.  Huge difference.

[Rick73]

The “industry” or do they mean “buyers” face $14 billion in fines?  If it were only one or two companies, that’s one thing.  When it’s “nearly all major automakers” they will simply add the cost to vehicle prices without regard to competitive disadvantage.  Granted, some automakers will get hit harder than others.

 

 

“A group representing nearly all major automakers said last week the industry as a whole could face $14 billion in CAFE fines.“

[GearheadGrrrl]

At worst, just an expansion of the gas guzzler tax...

[akirby]

29 minutes ago, Rick73 said:

The “industry” or do they mean “buyers” face $14 billion in fines?  If it were only one or two companies, that’s one thing.  When it’s “nearly all major automakers” they will simply add the cost to vehicle prices without regard to competitive disadvantage.  Granted, some automakers will get hit harder than others.

 

 

“A group representing nearly all major automakers said last week the industry as a whole could face $14 billion in CAFE fines.“

GM and Stellantis would be impacted far more than the others so they can’t just raise prices across the board.

[rmc523]

"Potentially" should've been put before "face"

[tbone]

When are the people (by way of congress) going to get involved in setting standards, such as voting on proposals, instead of letting faceless bureaucrats (such as the NHTSA) dictate to the public.  This is only going to cost the consumer more money.  

[Rick73]

2 hours ago, akirby said:

GM and Stellantis would be impacted far more than the others so they can’t just raise prices across the board.

Yes, I saw where GM’s exposure is much greater than Ford’s, though I’m not sure why revising how CAFE is calculated makes such a big difference  between Ford and GM.  Maybe GM projected BEV sales are much higher, and would therefore have more to lose due to revision.

 

Farley seems fed up with the whole thing.
 

https://fordauthority.com/2023/10/ford-ceo-farley-says-evs-have-become-a-political-football/

[rperez817]

3 hours ago, Rick73 said:

The “industry” or do they mean “buyers” face $14 billion in fines?  

 

The automotive industry. The letters from AAPC and AAI represent the usual pushback from legacy automaker lobbyists, as Aaron Robinson of Car and Driver described below. 

 

Quote

The relationship between government and [automotive] industry followed this pattern: Government demands something, the industry screams that it's impossible, and then it delivers exactly what was demanded. Repeat steps one through three about 67,000 times and you define the modern automobile.

 

Regulatory agencies globally need to stay firm in their commitment to standards such as EPA's proposed GHG emission limits, NHTSA's proposed CAFE standards for 2027-2031 MY vehicles, and European Commission's proposed Euro 7 standards, for example.

Edited October 3, 2023 by rperez817

[silvrsvt]

2 hours ago, tbone said:

When are the people (by way of congress) going to get involved in setting standards, such as voting on proposals, instead of letting faceless bureaucrats (such as the NHTSA) dictate to the public.  This is only going to cost the consumer more money.  

 

You actually expect Congress to do something!??!?!!!! HAHAHAHAHHAHAHAHAHHAHA 

 

CAFE was enacted by Congress almost 50 years ago in 1975

[akirby]

3 hours ago, Rick73 said:

Yes, I saw where GM’s exposure is much greater than Ford’s, though I’m not sure why revising how CAFE is calculated makes such a big difference  between Ford and GM.  

GMs lack of hybrids and higher sales of large SUVs?

[Trader 10]

3 hours ago, silvrsvt said:

 

You actually expect Congress to do something!??!?!!!! HAHAHAHAHHAHAHAHAHHAHA 

 

CAFE was enacted by Congress almost 50 years ago in 1975

It’s a travesty that bureaucrats determine CAFE requirements. That absolutely should be done by elected officials. And so what if “they don’t do something”. So be it. To suggest otherwise is un-American. 

[silvrsvt]

13 minutes ago, Trader 10 said:

It’s a travesty that bureaucrats determine CAFE requirements. That absolutely should be done by elected officials. And so what if “they don’t do something”. So be it. To suggest otherwise is un-American. 

 

Actually it's worse than that...California has the right to enforce its emission laws (which are directly related to MPG) above what EPA sets as a standard. So you're dealing with a state setting standards for the rest of the country, due to its population size.

 

The EPA got smacked by the Supreme Court because they overstepped their boundaries and Congress needs to set the policy. But Congress is fucking dysfunctional at this point....

 

https://www.epa.gov/newsreleases/conform-recent-supreme-court-decision-epa-and-army-amend-waters-united-states-rule#:~:text=The Supreme Court's Decision in Sackett v.,forward consistent with the ruling.

 

https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change 

 

Edited October 4, 2023 by silvrsvt

[Trader 10]

8 minutes ago, silvrsvt said:

 

Actually it's worse than that...California has the right to enforce its emission laws (which are directly related to MPG) above what EPA sets as a standard. So you're dealing with a state setting standards for the rest of the country, due to its population size 

 

You’re 100% correct. 

[Rick73]

4 hours ago, rperez817 said:

 

The automotive industry. The letters from AAPC and AAI represent the usual pushback from legacy automaker lobbyists, as Aaron Robinson of Car and Driver described below. 

 

 

Regulatory agencies globally need to stay firm in their commitment to standards such as EPA's proposed GHG emission limits, NHTSA's proposed CAFE standards for 2027-2031 MY vehicles, and European Commission's proposed Euro 7 standards, for example.

As long as we realize that meeting added regulations usually adds cost, which ultimately ends up being paid by auto buyers.  Manufacturers just pass the added cost down to us all..  There’s no free lunch as they say.  Obviously, some regulations are well worth the added cost, but the question being asked is who gets to limit or control these proposed requirements?  We can’t just cow down to every environmental activist with extreme views, right? 

[jpd80]

3 hours ago, silvrsvt said:

 

Actually it's worse than that...California has the right to enforce its emission laws (which are directly related to MPG) above what EPA sets as a standard. So you're dealing with a state setting standards for the rest of the country, due to its population size.

 

The EPA got smacked by the Supreme Court because they overstepped their boundaries and Congress needs to set the policy. But Congress is fucking dysfunctional at this point....

 

https://www.epa.gov/newsreleases/conform-recent-supreme-court-decision-epa-and-army-amend-waters-united-states-rule#:~:text=The Supreme Court's Decision in Sackett v.,forward consistent with the ruling.

 

https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change 

 

That would be not only California but the 18 aligned states?

 

So imagine if those 18 states began to create zero emission zones around major cities,

such that, if you don’t have a ZEV or PHEV then you pay a tax per day to enter (Say $50 or $100)

Welcome to European emissions controls….

 

The other way they could go is just stick a $3/gal tax on everything that moves and

use that to pay for Battery charging infrastructure and tax incentives for BEVs.

I could imagine people would then  just buy something that doesn’t run of gasoline or diesel.

Is this just a BS nightmare or are bureaucrats actually thinking of these kinds of proposals?

Edited October 4, 2023 by jpd80

[silvrsvt]

6 hours ago, jpd80 said:

That would be not only California but the 18 aligned states?

 

California is number one state for new car sales anyways, so it would have to be catered to anyways.

 

The other states make up a significant portion of the top 20 states for car sales, with the notable exceptions of Florida and Texas, where number 3 and 2 respectively. 

[rperez817]

9 hours ago, Rick73 said:

As long as we realize that meeting added regulations usually adds cost, which ultimately ends up being paid by auto buyers.  Manufacturers just pass the added cost down to us all.. 

 

Added regulations pertaining to automotive fuel efficiency, pollution control, and safety also have numerous benefits, including cost savings to consumers. Consumer Reports did a study last year that determined that "after adjusting for inflation, vehicle prices didn’t increase during the time period studied—model years 2003 through 2021—even as average fuel economy increased 30 percent and proven lifesaving safety technologies became common features." Vehicle Price Trends Draft (consumerreports.org)

 

The data is clear that strong federal fuel economy and greenhouse gas standards work, and deliver huge savings to consumers. Based upon the statistical analysis in this study, we can now conclude that these savings have come with no statistically significant, inflation-adjusted cost to consumers in terms of increased vehicle purchase price. In addition to more efficient vehicles, consumers are also getting safer vehicles as the result of improved safety standards—all without paying more on an inflation-adjusted basis.

 

Reported changes in average automotive transaction prices appear to be primarily driven by automaker and consumer shifts toward larger, more expensive SUVs and away from smaller and cheaper cars, rather than by improvements in fuel economy or safety technology. The CR data presented illustrate that on a same vehicle nameplate or same vehicle class basis, new vehicle prices have seen no systemic increase. At the same time, these vehicles have become safer, less polluting, more efficient, and more capable. While significant improvements have been made, the work is not done. These findings demonstrate that regulators can and should be aggressive in ensuring that automakers continue to deliver cost-effective technology improvements that save dollars and lives.

 

[tbone]

On 10/3/2023 at 5:06 PM, silvrsvt said:

 

You actually expect Congress to do something!??!?!!!! HAHAHAHAHHAHAHAHAHHAHA 

 

CAFE was enacted by Congress almost 50 years ago in 1975

I know, it’s wishful thinking but still.  We have a lot of decisions being made by unelected individuals.  

[tbone]

22 hours ago, jpd80 said:

That would be not only California but the 18 aligned states?

 

So imagine if those 18 states began to create zero emission zones around major cities,

such that, if you don’t have a ZEV or PHEV then you pay a tax per day to enter (Say $50 or $100)

Welcome to European emissions controls….

 

The other way they could go is just stick a $3/gal tax on everything that moves and

use that to pay for Battery charging infrastructure and tax incentives for BEVs.

I could imagine people would then  just buy something that doesn’t run of gasoline or diesel.

Is this just a BS nightmare or are bureaucrats actually thinking of these kinds of proposals?

You can be assured there are people thinking of schemes  like this.  

[Rick73]

On 10/4/2023 at 7:42 AM, rperez817 said:

Added regulations pertaining to automotive fuel efficiency, pollution control, and safety also have numerous benefits, including cost savings to consumers. Consumer Reports did a study last year that determined that "after adjusting for inflation, vehicle prices didn’t increase during the time period studied—model years 2003 through 2021—even as average fuel economy increased 30 percent and proven lifesaving safety technologies became common features." Vehicle Price Trends Draft (consumerreports.org)

 

Just because events occur sequentially it doesn’t necessarily mean there is related causality (cause and effect).  In this case, vehicles could be cheaper to own and or operate because of other factors, like improvements in technology that make them more reliable, or technology reducing cost to manufacture through automation, or greater competition, etc.  

 

Just because one event occurs before another, it doesn’t mean it caused it.  I agree mandates cause change, but I’m not sure mandates are reason vehicles are cheaper to buy and or operate (assuming that’s even the case because they seem more expensive when adjusted for inflation).  Granted, much vehicle added content is not due to safety, environmental, and fuel-economy mandates, but claiming these mandates reduce cost seems a stretch to me.  I personally expect many of these studies spin data to get results supporting their ideology. 

[rperez817]

22 minutes ago, Rick73 said:

Granted, much vehicle added content is not due to safety, environmental, and fuel-economy mandates, but claiming these mandates reduce cost seems a stretch to me.  

 

The specific example of reduced costs for new car customers in the Consumer Reports study was "$7,000 in per-vehicle lifetime fuel savings for model year 2021 vehicles compared with model year 2003", a direct result of CAFE and other fuel-economy mandates during that timeframe. But the cost reductions go far beyond that when all stakeholders are considered (e.g., reduction in deaths and injuries, reduced costs of certain automotive technologies due to economies of scale, etc.).

 

Going back to the CAFE proposals for 2027-2031 MY vehicles referenced in the OP, NHTSA mentioned that automakers "are free to use electric vehicles to comply and avoid penalties altogether". Since 100% electric vehicles represents one component of the global automotive industry's future, this is an example in which government and industry should be on the same page.

 

 

[Rick73]

5 hours ago, rperez817 said:

Since 100% electric vehicles represents one component of the global automotive industry's future, this is an example in which government and industry should be on the same page.

That also requires buyers to be on same page, and thus far it’s only about 4% for Ford so we don’t have significant confirmation of that future yet.  Additionally, industry has to follow buyers as much as government, otherwise they may  manufacture vehicles that few want.  Ultimately, I have faith that “we are the government”, and will change those who represent us if their actions don’t align with what we really want.  Longer-term bureaucrats can’t force things on us when enough buyers and voters resist.  Just saying government and industry can align all they want, but buyers have final say one way or the other.