The Biden administration has reached a settlement with General Motors after determining that the automaker violated federal regulations by selling about 6 million vehicles that emitted more carbon dioxide, which contributes to global warming, than the company claimed.
GM must pay more than $145.8 million in fines for selling vehicles from the 2012 to 2018 model years that were required to comply with Obama-era auto tailpipe emissions standards designed to reduce global warming pollution.
That year, GM sold about 4.6 million full-size pickup trucks and sport-utility vehicles and 1.3 million mid-size sport-utility vehicles that the company claimed met pollution standards but did not, according to an EPA investigation.
“EPA’s vehicle standards depend on strong oversight to deliver real-world public health benefits,” said EPA Administrator Michael S. Regan. “Our investigations have achieved accountability and support important programs that reduce air pollution and protect communities across the country.”
The company also voluntarily forfeited about 50 million tons of carbon dioxide pollution credits issued by the EPA and used to make it easier for automakers to comply with increasingly stringent federal tailpipe emissions standards. GM estimates the lost credits are worth about $300 million, reflecting the amount paid a decade ago. But the market value of these carbon credits varies, and a recent government estimate of $86 per credit would put their value at about $4.6 billion.
Among the vehicles cited for violations were several models of the Chevrolet Silverado, which has historically been one of the nation's best-selling passenger cars, several models of the Chevrolet Suburban, several models of the Chevrolet Equinox, several models of the Chevrolet Tahoe, several models of the Cadillac Escalade, and several models of the GMC Yukon.
In a statement, the company did not admit any wrongdoing or violation of any law or regulation. “We believe this is the best course of action to promptly resolve any outstanding issues with the federal government regarding this matter,” the statement said. “GM is committed to reducing vehicle emissions and working to meet the administration’s vehicle electrification goals.”
The agreement follows a major tightening of federal tailpipe pollution standards by the Biden administration. The new rule, finalized in March, is central to President Biden’s strategy to combat climate change. The rule is designed to dramatically reduce climate-warming emissions from vehicle tailpipes by accelerating the transition from fossil fuel-powered vehicles to hybrid and electric vehicles.
Once the new rules are fully implemented, most new passenger cars and light trucks sold in the U.S. will be electric or hybrid by 2032. Last year, electric vehicles made up less than 10 percent.
The agreement would make it harder or more expensive for GM to comply with new rules if it loses carbon emissions credits.
The credits are intended to make it easier for automakers to meet the standards. For example, if a company fails to meet the standards in a given year, it can buy credits from another company that exceeded the standards that year to make up the difference. Losing credits for GM would mean it would have to build and sell more low-emission or pure electric vehicles than it would have otherwise, or buy much more expensive credits to meet the standards.