General Motors Chief Executive Mary Barra said the Trump administration’s move to loosen U.S. fuel-economy and emissions rules has had a greater impact on the automaker’s business than the administration’s rapidly shifting trade policies, forcing GM to rethink its product and investment strategy.
Speaking at an Automotive Press Association event ahead of this week’s Detroit Auto Show, Barra said regulatory changes — including the removal of a $7,500 federal tax credit for electric vehicles and efforts to roll back tailpipe-emissions standards — prompted the company to make swift and significant adjustments.
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“We had to make some fairly significant changes,” Barra said, referring to decisions to cut billions of dollars in planned electric-vehicle investments while placing greater emphasis on gasoline-powered models.
U.S. President Donald Trump has pushed to scale back fuel-economy regulations that have shaped vehicle development for years, arguing that looser standards would make it easier for automakers to sell combustion-engine vehicles. The administration also eliminated the consumer tax credit for electric vehicles in late September, a move that Barra said led to a sharp drop in demand.
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Despite the near-term headwinds, Barra said GM continues to view electric vehicles as the long-term direction for the industry. “It will take longer without the incentives, but I still think we’ll get there over time,” she said, adding that GM still sees battery-electric vehicles as “the end game.”
Barra said GM is expanding its work on plug-in hybrid vehicles, which can operate on electric power before switching to an internal combustion engine, and is also evaluating conventional hybrids. However, she said the company remains more focused on EVs, arguing they ultimately offer a better product for customers.
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Several automakers have scaled back their EV ambitions amid weaker demand and regulatory uncertainty. GM’s rival Ford Motor last month reported a $19.5 billion writedown after cancelling several electric-vehicle programs. GM said earlier this month it would record a $6 billion charge related to unwinding some EV investments, following a $1.6 billion charge in the third quarter.
“I’m a little surprised at some [automakers] that are really pulling away very quickly, because we don’t know what will be in ’29, ’30, ’32,” Barra said, stressing the importance of maintaining flexibility as regulatory policies may change under future administrations.
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The regulatory backdrop remains in flux. The National Highway Traffic Safety Administration last year proposed easing fuel-economy requirements for model years 2022 to 2031, targeting an average of 34.5 miles per gallon by 2031, down from a previously planned 50.4 mpg standard.
Source: Reuters
