VWAGY - GM Stellantis on hook for $9.5B in fines under fuel economy proposal - report

2023-10-03 04:49:17 ET

General Motors ( NYSE: GM ) and Chrysler maker Stellantis ( NYSE: STLA ) will likely face around $9.B in overall fines under the Biden administration's proposal to hike fuel economy standards through 2032, Reuters reported citing a trade group's letter.

GM ( GM ) is expected to face $6.5B in fines, while Stellantis ( STLA ) could be on the hook for $3B, according to a letter by the American Automotive Policy Council - which represents Detroit's Big Three - to the U.S. Energy Department.

The group said the potential fines for not meeting the proposed Corporate Average Fuel Economy ( CAFE ) requirements are "alarming."

Ford Motor ( F ) could face ~$1B in penalties, while Volkswagen ( OTCPK:VWAGY ) may have to shell out over $1B.

GM ( GM ), Stellantis ( STLA ) and Ford ( F ) face $2.15K per vehicle in compliance costs, much higher than the $546 per vehicle on average sold by other automakers.

The proposed policy "would reward those auto manufacturers resisting the transition to a fully electric future the most," the letter said .

If automakers are unable to meet CAFE requirements, they can buy credits or pay penalties. GM ( GM ) and Stellantis ( STLA ) previously paid $363M in CAFE fines.

More on fuel economy standards

• U.S. proposes to boost fuel economy standards for new vehicles
• EPA proposes aggressive new 'clean vehicle' standards

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