General Motors is backing away from the Trump administration’s court fight over California’s vehicle emissions standards, as Democrat Joe Biden prepares to take over the White House and the carmaker makes a push to dominate the US market for electric vehicles.

Mary Barra, chief executive, sent a letter to environmental groups on Monday saying the largest US carmaker was withdrawing from litigation advanced by President Donald Trump’s administration that sought to bar the west coast state from setting its own fuel efficiency and zero-emission standards for vehicles.

Mr Trump rolled back fuel efficiency standards set during Barack Obama’s presidency. The move prompted California, the most populous US state and a huge market for carmakers, to say it would set its own, tougher standards, similar to the Obama-era rules.

The Trump administration told carmakers they only needed to improve fuel efficiency by 1.5 per cent a year through to the end of 2026, compared to the 5 per cent specified by the Obama administration.

Ford, Honda and Volkswagen never supported the Trump administration’s rules. GM’s reversal leaves Toyota and Fiat Chrysler Automobiles alone in supporting the rollback of standards.

Mr Biden, the president-elect who will take office in January, has said he would establish “ambitious” new standards. GM, meanwhile, said in March that it would invest $20bn by 2025 to develop electric vehicles, and last week it raised that target by $7bn while speeding up timetables for electric models.

“We believe the ambitious electrification goals of the president-elect, California, and General Motors are aligned to address climate change by drastically reducing automobile emissions,” Ms Barra wrote. “To better foster the necessary dialogue, we are immediately withdrawing from the pre-emption litigation and inviting other automakers to join us.”

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Mr Biden said in a statement that GM’s move was “encouraging news for our economy, our planet and the long-term success of American autoworkers”.

David Whiston, a Morningstar analyst, said that a strategic shift towards electric vehicles was more important to GM’s decision to withdrawn from the litigation than a change in political administration.

“If they had not changed their mind, they’d be open to a lot of criticism,” he said. “They want to have their policy agenda matching their electric vehicle agenda.”

GM’s choice to join the Trump administration’s challenge to California had less to do with politics than wanting a single national standard, Mr Whiston said. The company did not want to see the US split into smaller markets with individualised requirements.

While it seems unlikely that Mr Biden would keep the Trump administration’s rules in place, Mr Whiston said, it was too early to know what he would establish in their place.

Via Financial Times

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