by Stephen Rivers
- GM vows to keep improving engine efficiency as federal standards weaken.
- Looser rules may push automakers toward more profitable trucks and SUVs.
- Barra says GM’s EV commitment stands despite lower sales after credits ended.
This year has been a strange one for automakers, but many of them just caught a break. The EPA effectively wiped out penalties for missing fuel-economy targets, a move that could easily trigger another surge in high-margin full-size trucks and SUVs.
More: Trump Admin Pushes Fuel Economy Shakeup And The Impact Could Be Huge
With less regulatory pressure, engines don’t have to get cleaner or more efficient, yet GM CEO Mary Barra insists the company will keep pushing them in that direction anyway.
She maintains that GM will improve every combustion engine it invests in, no matter what the rulebook says. Whether that commitment holds once the market leans even harder toward big, profitable gas-guzzlers is another matter entirely.
How Long Will Progress Last?
Innovation is no doubt key for all automakers, so the promise of continued development is promising on paper. That’s what Barra provided at the New York Time’s DealBook Summit on Wednesday, saying, “Every engine we invest in, we work to have a significant improvement.”
It seems clear that tougher fuel economy standards have led to huge costs for automakers. A recent report indicates that many of the larger recalls from the past two years can be linked to those standards.
Whether or not GM and other automakers will continue to push fuel economy as hard as they have is a worthy consideration.
What’s the Incentive Now?
For decades, automakers have intentionally steered consumers toward larger SUVs and trucks because they offer the largest profits and require the least stringent fuel economy standards.
Read: GM’s Cheapest American EV Starts With A Chinese Shortcut
It’s unclear why that strategy would change now that the penalties are gone altogether. Still, something positive could come from new regulations in Barra’s eyes.
Barra also supported Trump’s move to strip California of tougher clean-air authority, pushing instead for one national standard that doesn’t “get in front of the consumer.” However, automakers helped create today’s SUV-heavy demand, so that argument only goes so far.
Looser rules also ease pressure on EVs, a convenient shift for GM as sales dip after tax credits expired and its electric lineup remains unprofitable. Barra insists the company is still committed.
She was more positive on tariffs, calling recent policies “a more level playing field” after years of uneven barriers. GM may keep refining engines, but with weaker rules and a market built around giant SUVs, it’s hard to imagine Detroit walking away from its biggest profit margins.
