This Wednesday, General Motors (GM) announced its support behind the overall emission reduction plans in California’s 2019 deal. Therefore, with other major automakers, the company today asked the Biden administration to give them more flexibility; particularly, to hit the carbon reduction target between now and 2026.
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According to the administration, GM’s position represents the latest shift on vehicle emissions policy by the Top U.S. automaker. Indeed, the Company outlined its position in a letter from Chief Executive Mary Barra to Environmental Protection Agency (EPA) head Michael Regan.
A shift in GM with respect to emissions targets
Worth noting, until November last year, GM backed the Trump administration’s effort to block California from setting stricter emissions standards than the federal government. Therefore, Wednesday’s letter marks a shift in the company’s approach and followed a call between Barra and Regan on Tuesday.
As Reuters states, the major automakers in the U.S. all face the challenge of protecting petroleum-fueled truck and SUV profits. However, they must do it without clashing with an administration committed to a more assertive climate policy. Not only the federal government is pushing them further on their climate ambitions, but also investors are demanding that companies do more to cut emissions.
Indeed, since 2019, Ford Motor Co (F.N), Honda Motor Co (7267.T), Volkswagen AG (VOWG_p.DE), and BMW (BMWG.DE) in July 2019 established a voluntary agreement with California on reducing vehicle emissions through the 2026 model year. Then, the aim was to set a national standard on the matter.
Accordingly, under the California standard, GM and other automakers will be out of compliance for the current 2021 model year and 2022. Moreover, the company currently proposes automakers ramp up to the California GHG standards by 2023. Besides, they should later go beyond the proposed California emissions targets for 2024-2026 to reduce overall emissions for the 2020-2026 period.
Fossil-fueled trucks to continue in the landscape
Indeed, GM has outlined ambitious plans to expand its electric vehicle offerings. Therefore, the automaker will invest $27 billion to field 30 new electric vehicles worldwide by 2025. Besides, it said it aspires to end the sale of gasoline-powered passenger vehicles by 2035.
“We believe an electric vehicle compliance pathway is a key component to setting the industry on an irreversible path towards a zero-emissions future. In fact, this can only be achieved with a tailpipe-free light-duty fleet,” Barra wrote.
However, in the near term, GM and its rivals (Ford Motor Co and Stellantis NV) will make most of their profits selling large, petroleum-fueled pickup trucks, notes Reuters. Also, they will seize the business through sport-utility sales in the U.S.
For instance, GM last week announced plans to expand production of its largest pickup trucks by 1,000 vehicles a month to meet demand.