U.S. Eases Fuel Standards, Automakers' Technology Costs Drop Sharply: General Motors Company (GM.US) Expected to Save $20.4 Billion, Vehicle Prices May Fall by Nearly $1,300

According to the National Highway Traffic Safety Administration (NHTSA), General Motors Company (GM.US) is expected to see its technology costs drop by $20.4 billion by 2031, as the fuel economy standards finalized this week were significantly scaled back. Similarly, Stellantis (STLA.US) will see its technology costs fall by $6.2 billion, Ford (F.US) by $5.1 billion, Hyundai Motor (HYMLF.US) by $5.3 billion, Toyota (TM.US) by $4.5 billion, and Honda (HMC.US) by $4.1 billion. Overall, NHTSA estimates that automakers' technology costs will decline by $60.6 billion by 2031. The agency projected that "if the cost savings are passed on to consumers, NHTSA estimates that the average cost per new vehicle will be reduced by $1,289 for the 2031 model year." General Motors Company said it supports NHTSA's goal for the final rule on corporate average fuel economy (CAFE) standards, as well as the agency's intent to better align them with market realities. John Bozzella, CEO of the Alliance for Automotive Innovation, pointed out that the Biden-era standards effectively mandated a switch to electric vehicles, which was out of step with market realities and customer demand. He added that NHTSA's final rule is a "proper course correction." Under the previous administration, the auto industry was expected to face no more than $1.83 billion in penalties from 2027 to 2031 for failing to meet CAFE standards.