The US relaxes fuel standards, and car companies' technical costs drop dramatically: General Motors (GM.US) is expected to save 20.4 billion US dollars, and bicycle prices may drop by nearly 1,300 US dollars

The Zhitong Finance App learned that according to the US National Highway Traffic Safety Administration (NHTSA), the technical cost of General Motors (GM.US) is expected to drop by 20.4 billion US dollars by 2031 due to drastic cuts in fuel economy standards finalized this week.

Similarly, technology costs for Stellantis (STLA.US) will drop by $6.2 billion, Ford (F.US) by $5.1 billion, Hyundai (HYMLF.US) by $5.3 billion, Toyota (TM.US) by $4.5 billion, and Honda (HMC.US) by $4.1 billion.

Overall, NHTSA expects automakers' technology costs to drop by $60.6 billion by 2031.

The agency predicts, “If the savings are passed on to consumers, NHTSA estimates that the average cost of a new bike for the 2031 model year will be reduced by an average of 1,289 US dollars.”

GM said it supports NHTSA's goal of the final rule of the Enterprise Average Fuel Economy (CAFE) standard and the agency's intention to make it more compatible with market reality.

John Bozzella, CEO of the Automotive Innovation Alliance, pointed out that the standards of the Biden era actually required a switch to electric vehicles, and this was out of touch with market reality and customer needs. He added that NHTSA's ultimate rule is a “proper course correction”.

Under the previous administration, the automotive industry is expected to face no more than $1.83 billion in fines from 2027 to 2031 for not meeting CAFE standards.