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GM withdraws help for Trump's emissions lawsuit towards California

President Donald Trump addresses General Motors CEO Mary Barra and other auto industry executives at the American Center for Mobility in Ypsilanti, Michigan on March 15, 2017.

Nicolas Kamm | AFP | Getty Images

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

In a letter to environmental leaders on Monday, GM's CEO Mary Barra said the company's decision to withdraw from the lawsuit will take effect immediately. This will be followed by the November 3rd election of President-elect Joe Biden, his support for electric vehicles and his call for unity in the country, she said.

"We believe the ambitious electrification goals of President-elect, California, and General Motors are designed to address climate change by drastically reducing automotive emissions," wrote Barra.

With his withdrawal, GM shows support for the new administration and distances itself from Trump, who publicly praised and condemned the automaker during his tenure as commander in chief. GM plans a robust portfolio of electric vehicles for the coming years.

During Monday afternoon's trading, the automaker's shares rose 4.9% to a new 52-week high of $ 45.16 per share.

The White House declined to comment. James Hewitt, spokesman for the US Environmental Protection Agency, said, "It is always interesting to see the changing positions of US companies."

In a statement, Biden welcomed GM's decision as well as Barra's comments in the letter to environmental leaders. He also described the efforts of the Trump administration as "short-sighted".

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

It is widely expected that Biden will drop the lawsuit against California and allow the state to set its own standards. California was allowed to do so under a 2013 waiver under the Clean Air Act. Other states were also allowed to adopt these standards.

The Detroit automaker, along with Fiat Chrysler, Toyota Motor, and other smaller automakers, backed Trump's efforts in late 2019. Trump was struggling to lower the Obama administration's national emissions standards at the time, and to deprive California and other states of their own vehicle emissions regulations to be determined.

Four other major automakers – Ford Motor, BMW, Honda Motor and Volkswagen – signed a deal with California in July to tighten fuel consumption and emissions standards, angering Trump.

Barra invited other automakers involved in the lawsuit to join us and withdraw from the lawsuit. Fiat Chrysler did not have an immediate response to GM's call to withdraw from the lawsuit. In a statement sent via email, Toyota said, "As circumstances change, we are assessing the situation but remain committed to our goal of a single set of fuel economy standards that will apply in all 50 states."

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

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