General Motors may hope to earn relief from onerous rules designed to promote the sale of electric vehicles, various reports said Sunday. GM stock traded just below a buy point Monday.
A possible change in federal limits on tailpipe emissions is in the works. Unnamed sources told The New York Times that the Biden administration "intended to relax" elements of its regulatory strategy, designed to quicken the shift to electric vehicles (EVs) from traditional vehicles with internal combustion engines (ICE).
On Monday, CNN reported the White House was "considering relaxing stringent vehicle emissions rules," also citing unnamed sources.
The rules in question would essentially require automakers to rapidly increase EV sales over the next few years. The change to proposed rules would delay those requirements until after 2030, the reports said.
Both media outlets reported that the changes were not finalized, with an update expected in the spring.
The move was seen as a concession to both automakers and unions, The New York Times said. John Bozzella, president and CEO of the Alliance for Automotive Innovation (AAI), said on Sunday that the EV market needs more time to develop.
"Give the market and supply chains a chance to catch up, maintain a customer's ability to choose, let more public charging come online, let the industrial credits and Inflation Reduction Act do their thing and impact the industrial shift," Bozzella said.
General Motors, Ford and Stellantis, the parent of Ram and Jeep brand — all members of auto industry trade group AAI — have warned that the transition from ICE to EV fleets is going slower than expected.
While interested in electric cars, consumers have balked at their steep prices and charging constraints. Amid sluggish sales, GM and Ford are losing money on electric vehicles.
GM Stock, Ford Stock Diverge
Shares of General Motors gained 0.8% to 39.02 on the stock market today. The auto stock gapped up Jan. 30 after fourth-quarter earnings and a strong outlook. It continues to act well. The 50-day moving average recently crossed above the 200-day line, a positive sign.
GM stock now shows a 39.75 buy point from a three-weeks-tight pattern, trading above all the short- and long-term averages.
Ford stock fell 0.3% Tuesday, testing support at the 200-day line. The 50-day average remains below the 200-day line. Stellantis and Tesla also declined.
In the latest sign of EV weakness, Ford slashed the price of its Mustang Mach-E electric crossover by up to $8,100 in the U.S., putting more pressure on Tesla. On top of that, Ford added new incentives for the F-150 Lightning electric pickup truck.
Unlike GM stock, shares of Ford have wilted since the automaker's Q4 report, despite stronger-than-expected earnings and outlook.
Further to EV woes, Ford faces the threat of another strike by auto union workers at its largest and most profitable truck plant in Kentucky this week, if a local contract dispute is not resolved.
