Stock prices for U.S. automakers rose sharply Thursday amid signs that fuel economy standards could be weakened under the administration of President Donald Trump.
A noted climate-change skeptic is seen as a likely choice to lead the Environmental Protection Agency under Trump. And an industry group on Thursday already was urging the president-elect to roll back mandates that automakers achieve a fleet-wide average of 54.5 miles-per-gallon for cars and light-duty trucks by 2025. Those requirement were put in place by President Barack Obama’s administration.
On the day of Trump’s first visit to Washington, D.C., as president-elect, General Motors Co. stock rose 5.7 percent to $32.73 per share.
Ford stock closed up 3.1 percent to $11.94. And shares of Fiat Chrysler Automobiles NV — which has the largest proportion of pickups and SUVs, and the fewest resources to invest in fuel-saving technology — rocketed up 9.7 percent to close at $7.69.
The Alliance of Automobile Manufacturers, which lobbies for U.S. automakers in Washington, said in a Thursday memo to Trump’s transition team that Trump should move quickly to “harmonize and adjust” the stringent gas mileage rules because they “pose a substantial challenge to the auto sector due to the steeper compliance requirements for model years 2017-2025.”
The group said Trump should roll back mileage rules, which are beginning to take effect with model-year 2017 vehicles that are already in showrooms, because reports on the emission standards that have been released by federal regulators “over-projects technology efficiencies and inadequately accounts for consumer acceptance and marketplace realities.”
The auto alliance wrote, “The combination of low gas prices and the existing fuel-efficiency gains from the early years of the program is undercutting consumer willingness to buy the vehicles with more expensive alternative powertrains that are necessary for the sector to comply with the more stringent standards in out-years.”
The group represents Fiat Chrysler, Ford, GM, BMW Group, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Car USA.
Trump is likely to appoint an EPA administrator who is a lot more skeptical of the need to fight climate change than the Obama administration has been. Myron Ebell, director of the Center for Energy and Environment at the conservative think tank Competitive Enterprise Institute, leads Trump’s EPA transition team. Ebell is now seen as a likely choice to lead the EPA.
Jack Nerad, executive market analyst for Kelley Blue Book, said automakers are probably right to expect more favorable regulations than they have received from the outgoing Obama administration.
“One can expect that the Trump administration and the Republican-controlled Congress will take a new look at regulations that affect the auto industry and industry in general,” he said. “One obvious candidate are the current CAFE (Corporate Average Fuel Economy) regulations. In light of lower fuel prices and increased supplies of domestically produced fuel, we are likely to see a relaxation of the CAFE regulations.”
Read more of the original article at The Detroit News.