Ford's chief executive, Jim Farley, has voiced strong support for the recent decision by former President Donald Trump's administration to modify Corporate Average Fuel Economy (CAFE) regulations. Farley confirmed that the automotive giant intends to allocate more resources towards producing budget-friendly vehicles within the United States, aiming to enhance accessibility for consumers. This strategic shift is expected to bolster domestic manufacturing and make car ownership more attainable for a wider audience.
During a press briefing held at the White House, Farley reiterated Ford's commitment to making vehicles more economical for the average American family. He emphasized that this increased investment in U.S.-based production is a direct response to the adjusted federal fuel efficiency rules. His remarks were later echoed by Transportation Secretary Sean Duffy, who, in a post on X, praised the policy change as a common-sense move that would allow automakers to better meet consumer demand.
Secretary Duffy further elaborated on the economic benefits, stating that the relaxed CAFE standards are projected to save Americans a staggering $109 billion over the next five years, with an average reduction of $1,000 in the price of new vehicles. He hailed this outcome as a testament to Trump's dedication to economic affordability for the public. The former president, during the same event, characterized the previous CAFE standards as "ridiculously burdensome" and "horrible," signaling a clear departure from stringent environmental mandates.
The reversal of these regulations coincides with earlier indications from the Trump administration's Environmental Protection Agency (EPA) that it would revisit the 2009 Endangerment Finding. This finding has historically served as a foundational legal basis for many climate and emissions policies in the U.S. A potential rescission of this finding would significantly reduce the regulatory pressure on vehicle manufacturers to adhere to strict emissions limits, thereby impacting the market for zero-emission vehicle (ZEV) credits, which have been a notable revenue source for companies like Tesla and Rivian.
In related news, a Senate committee led by Senator Ted Cruz is reportedly planning to scrutinize various automotive safety mandates, including automatic emergency braking (AEB) and child reminder systems. This inquiry is driven by concerns regarding the overall affordability of vehicles. Concurrently, Ford reported a substantial decline in its electric vehicle (EV) sales for November, with only 4,247 units sold, marking a 60.8% decrease compared to the previous year. This downturn aligns with CEO Farley's earlier prediction during the third-quarter earnings call that EV adoption in the U.S. might stabilize around 5% due to softening demand.
The modifications to fuel economy standards and Ford's renewed focus on American-made, affordable vehicles highlight a pivotal shift in the automotive industry. The administration's move aims to alleviate financial burdens on both consumers and manufacturers, fostering an environment where car prices are more accessible and domestic production is prioritized.