Donald Trump

GM Withdraws Support for Trump's Lawsuit Against California Over Emissions

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  • GM is withdrawing from litigation led by the Trump administration against California over the state being allowed to set its own fuel economy and emissions regulations.
  • President-elect Joe Biden was widely expected to allow California the right to set its own standards.
  • GM along with Fiat Chrysler, Toyota and other smaller automakers initially supported the litigation in late-2019.

General Motors is withdrawing from litigation led by the Trump administration against California over the state's right to set its own fuel economy and emissions regulations, distancing itself from President Donald Trump.

In a letter Monday to environmental leaders, GM CEO Mary Barra said the company's decision to withdraw from the litigation is effective immediately. It follows President-elect Joe Biden's Nov. 3 election, his support for electric vehicles as well as his call for unity in the country, she said.

"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," Barra wrote.

By withdrawing, GM is showing support for the incoming administration while distancing itself from Trump, who has publicly praised and condemned automakers during his tenure as commander in chief. GM has plans for a robust portfolio of electric vehicles in the coming years.

Shares of the automaker during trading Monday afternoon were up as much as 4.9% to a new 52-week high of $45.16 per share.

The White House declined to comment. U.S. Environmental Protection Agency spokesman James Hewitt said that "it's always interesting to see the changing positions of U.S. corporations."

Biden, in a statement, applauded GM's decision as well as Barra's comments in the letter to environmental leaders. He also referred to the Trump administration's efforts as "shortsighted."

"There is nothing beyond our capacity as a country when we work together," he said. "I look forward to working with GM and other U.S. manufacturers — as well as American workers — in the years ahead to take bold, progressive steps to meet the existential threat of climate change and create millions of union jobs."

Biden is widely expected to drop the litigation against California and allow the state to set its own standards. California was allowed to do so under a 2013 waiver it received under the Clean Air Act. Other states were allowed to adopt those standards as well.

The Detroit automaker along with Fiat Chrysler, Toyota Motor and other smaller automakers initially supported Trump's efforts in late-2019. Trump at the time was fighting to rollback the Obama administration's national emissions standards and strip California and other states of the right to set their own vehicle emissions regulations.

Four other major automakers — Ford Motor, BMW, Honda Motor and Volkswagen — reached a deal with California in July to toughen the gas mileage and emissions standards, drawing ire from Trump.

Barra invited other automakers involved in the lawsuit to "join us" and withdraw from the litigation. Fiat Chrysler did not immediately have a response to GM's call to withdraw from the lawsuit. Toyota, in an emailed statement, said: "Given the changing circumstances, we are assessing the situation, but remain committed to our goal of a consistent, unitary set of fuel economy standards applicable in all 50 states."

GM's decision comes days after the automaker announced plans to spend $27 billion on all-electric and autonomous vehicles through 2025, an increase of $7 billion, or 35%, from initial plans announced in March.

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