Trump Administration Rescinds EV Incentive Rule
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 hours ago
0mins
Source: Benzinga
- Policy Rescission Impact: The Trump administration's Department of Energy has rescinded a rule that incentivized automakers to produce more EVs, which could further pressure the EV market already affected by the rollback of the 2009 EPA Endangerment Finding.
- Fuel Economy Calculation: The rescinded 'fuel content factor' allowed automakers to calculate fleetwide fuel economy by assigning higher efficiency figures to EVs, thus lowering overall fuel consumption metrics, and its removal will diminish the competitive edge of EVs.
- Court Ruling Basis: The DOE cited a September appeals court decision as the basis for this policy reversal, indicating that the legal environment is increasingly influencing EV policies, which may lead to more adjustments in similar regulations in the future.
- Market Reaction Expectations: With this policy change, major automakers like GM and Ford may need to reassess their EV strategies to navigate the increasingly challenging market environment and policy hurdles.
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Analyst Views on GM
Wall Street analysts forecast GM stock price to rise
19 Analyst Rating
14 Buy
4 Hold
1 Sell
Moderate Buy
Current: 81.220
Low
57.00
Averages
95.06
High
122.00
Current: 81.220
Low
57.00
Averages
95.06
High
122.00
About GM
General Motors Company designs, builds and sells trucks, crossovers, cars and automobile parts and provides software-enabled services and subscriptions worldwide. The Company's segments include GMNA, GMI, Cruise and GM Financial. Its GM North America (GMNA) and GM International (GMI) develop, manufacture and/or markets vehicles under the Buick, Cadillac, Chevrolet and GMC brands. The Company provides automotive financing services through its General Motors Financial Company, Inc. (GM Financial) segment. Its Cruise segment is engaged in the development and commercialization of autonomous vehicle technology. Its software-enabled services and subscriptions, including OnStar, its advanced driver-assistance systems (ADAS), including Super Cruise driver assistance technology, and its end-to-end software platform. The Company is also focused on investing in electric vehicles (EVs) and AVs, software-enabled services and subscriptions and new business opportunities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Production Capacity Enhancement: This investment will support preparations for the next generation of gas-powered full-size pickups while enhancing capabilities in the service parts business, ensuring Oshawa Assembly meets customer demands in the coming years.
- Unique Production Line: Oshawa Assembly is GM's only North American facility producing both light and heavy-duty full-size pickups on the same line, currently operating on two shifts, highlighting its critical role in the company's overall production strategy.
- Future Outlook: GM plans to share product details and launch timing for the next-generation pickups in the future, indicating the company's long-term commitment to the Oshawa facility and its keen insight into market demands.
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- Policy Rescission Impact: The Trump administration's Department of Energy has rescinded a rule that incentivized automakers to produce more EVs, which could further pressure the EV market already affected by the rollback of the 2009 EPA Endangerment Finding.
- Fuel Economy Calculation: The rescinded 'fuel content factor' allowed automakers to calculate fleetwide fuel economy by assigning higher efficiency figures to EVs, thus lowering overall fuel consumption metrics, and its removal will diminish the competitive edge of EVs.
- Court Ruling Basis: The DOE cited a September appeals court decision as the basis for this policy reversal, indicating that the legal environment is increasingly influencing EV policies, which may lead to more adjustments in similar regulations in the future.
- Market Reaction Expectations: With this policy change, major automakers like GM and Ford may need to reassess their EV strategies to navigate the increasingly challenging market environment and policy hurdles.
See More
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- Shareholder Return Comparison: While Ford returns most value to shareholders through dividends, General Motors has initiated a $10 billion stock buyback in 2023, with an additional $6 billion authorized for both 2024 and 2025, reflecting differing capital allocation strategies between the two automakers.
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- Total Investment: This investment, combined with the CAD 280 million investment made in June 2023, brings GM's total investment in its ICE ambitions to CAD 1.5 billion, reflecting a long-term strategic focus on the traditional automotive sector.
- Production Capacity Enhancement: The Oshawa plant currently manufactures Chevy Silverado light- and heavy-duty full-size pickups, and the new investment will further enhance its production capacity to meet the growing market demand for high-performance pickups, thereby boosting the company's competitive edge.
- Market Outlook: Amidst a backdrop of declining electric vehicle demand, GM's investment not only solidifies its position in the traditional gasoline vehicle market but also potentially provides greater flexibility and resilience for the company in navigating future market fluctuations.
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Economic Indicators: Recent economic data suggests mixed signals, impacting forecasts and investment strategies.
Sector Performance: Certain sectors are outperforming others, indicating potential opportunities for investors.
Global Events: International developments are influencing market dynamics, with geopolitical tensions and trade policies playing a crucial role.
See More
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Investment Announcement: GM has announced an additional investment of $63 million aimed at enhancing the production of next-generation trucks.
Focus on Innovation: This investment is part of GM's strategy to innovate and improve its truck offerings, ensuring they meet future market demands.
See More
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- Continued Investment: GM's total investment in Oshawa has reached C$1.5 billion since 2020, including the recent C$63 million announced for upgrading stamping operations, reinforcing its significance in the full-size truck portfolio.
- Production Capacity Enhancement: This investment will support preparations for the next generation of gas-powered full-size pickups while enhancing capabilities in the service parts business, ensuring Oshawa Assembly meets customer demands in the coming years.
- Unique Production Line: Oshawa Assembly is GM's only North American facility producing both light and heavy-duty full-size pickups on the same line, currently operating on two shifts, highlighting its critical role in the company's overall production strategy.
- Future Outlook: GM plans to share product details and launch timing for the next-generation pickups in the future, indicating the company's long-term commitment to the Oshawa facility and its keen insight into market demands.
See More
Trump Administration Rescinds EV Incentive Rule
- Policy Rescission Impact: The Trump administration's Department of Energy has rescinded a rule that incentivized automakers to produce more EVs, which could further pressure the EV market already affected by the rollback of the 2009 EPA Endangerment Finding.
- Fuel Economy Calculation: The rescinded 'fuel content factor' allowed automakers to calculate fleetwide fuel economy by assigning higher efficiency figures to EVs, thus lowering overall fuel consumption metrics, and its removal will diminish the competitive edge of EVs.
- Court Ruling Basis: The DOE cited a September appeals court decision as the basis for this policy reversal, indicating that the legal environment is increasingly influencing EV policies, which may lead to more adjustments in similar regulations in the future.
- Market Reaction Expectations: With this policy change, major automakers like GM and Ford may need to reassess their EV strategies to navigate the increasingly challenging market environment and policy hurdles.
See More
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- EV Business Losses: Ford has incurred over $16 billion in losses on its electric vehicle business since 2022, with a slight improvement to $4.8 billion in Q4 2023, yet it still anticipates losses of $4 billion to $4.5 billion in 2026, highlighting the high costs of its EV strategy amid an unprepared market.
- Shareholder Return Comparison: While Ford returns most value to shareholders through dividends, General Motors has initiated a $10 billion stock buyback in 2023, with an additional $6 billion authorized for both 2024 and 2025, reflecting differing capital allocation strategies between the two automakers.
- Future Outlook: Ford plans to launch a new midsize electric truck priced around $30,000 by 2027, utilizing its new
See More
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- Investment Expansion: General Motors is investing an additional CAD 63 million (USD 46 million) in its Oshawa assembly facility in Ontario to produce next-generation gas-powered pickups and expand its service parts business, demonstrating the company's ongoing commitment to the internal combustion engine (ICE) market.
- Total Investment: This investment, combined with the CAD 280 million investment made in June 2023, brings GM's total investment in its ICE ambitions to CAD 1.5 billion, reflecting a long-term strategic focus on the traditional automotive sector.
- Production Capacity Enhancement: The Oshawa plant currently manufactures Chevy Silverado light- and heavy-duty full-size pickups, and the new investment will further enhance its production capacity to meet the growing market demand for high-performance pickups, thereby boosting the company's competitive edge.
- Market Outlook: Amidst a backdrop of declining electric vehicle demand, GM's investment not only solidifies its position in the traditional gasoline vehicle market but also potentially provides greater flexibility and resilience for the company in navigating future market fluctuations.
See More
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Market Overview: The financial markets are experiencing fluctuations, with significant movements in stock prices and investor sentiment.
Economic Indicators: Recent economic data suggests mixed signals, impacting forecasts and investment strategies.
Sector Performance: Certain sectors are outperforming others, indicating potential opportunities for investors.
Global Events: International developments are influencing market dynamics, with geopolitical tensions and trade policies playing a crucial role.
See More
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Investment Announcement: GM has announced an additional investment of $63 million aimed at enhancing the production of next-generation trucks.
Focus on Innovation: This investment is part of GM's strategy to innovate and improve its truck offerings, ensuring they meet future market demands.
See More
