GM to Pay Nearly $146M in Penalties for Excess Car Emissions

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Facts

  • The US National Highway Traffic Safety Administration (NHTSA) said on Wednesday that General Motors will pay $145.8M in penalties and forfeit over 30.6M fuel credits to settle fuel economy compliance issues.1
  • Additionally, the automaker agreed to cancel 50M metric tons of carbon allowances following a multi-year investigation by the US Environmental Protection Agency (EPA) that uncovered excessive emissions from nearly 6M of its vehicles.2
  • According to EPA, 2012-2018 model year vehicles, including the Chevrolet Equinox SUV, were found to be emitting over 10% higher CO2 on average than the manufacturer had initially reported.3
  • This comes as the Biden administration tightened federal pollution standards in March to reduce tailpipe emissions from vehicles sold in the US and expedite the transition to hybrids and all-electric cars.4
  • GM paid the NHTSA a similar fine of $128M last year after several of its pick-up trucks failed to meet fuel economy standards. On Wednesday, the company shares fell 0.51% on the New York Stock Exchange.5
  • Nearly a decade ago, Volkswagen paid $30B in fines and settlements after admitting to having intentionally installed a software to defeat US smog tests, enabling nearly half a million cars to emit as much as 40 times the legal pollution limit.6

Sources: 1Reuters, 2Bloomberg, 3Washington Post, 4New York Times, 5Barrons and 6Associated Press.

Narratives

  • Narrative A, as provided by ESG News. This settlement demonstrates how important the EPA's light-duty vehicle-in-use testing program is to ensure that vehicles meet the standard requirements so as to reduce air pollution and deliver the intended benefits. Automakers will only comply if there is strong oversight and accountability.
  • Narrative B, as provided by Washington Examiner. This settlement does resolve issues between General Motors and the federal government, but by no means does it equal an admission of any wrongdoing or noncompliance with regulations. The automaker has long been committed to reducing auto emissions and to achieving the fleet electrification goals.

Predictions