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Shares of automobile major General Motors Co (NYSE:GM) traded slightly lower today.
The company has agreed to retire approximately 50 million metric tons of greenhouse gas credits to address excess CO2 emissions identified by the U.S. Environmental Protection Agency (EPA).
This agreement follows an EPA investigation that revealed excess emissions from around 5.9 million GM vehicles from the 2012-2018 model years.
The company will also pay a $145.8 million penalty. The National Highway Traffic Safety Administration (NHTSA) announced that GM would pay the penalty for fuel economy compliance issues and cancel over 30.6 million fuel economy credits for the 2008-2010 model years, reported Reuters.
The EPA’s light-duty vehicle standards ensure vehicles on the road meet emissions performance claimed by manufacturers during certification.
Tests by both the EPA and GM indicated the vehicles emitted over 10% more CO2 than initially reported by GM.
Also Read: GM’s Cruise Fined $112,500 By California Over Self-Driving Car Crash: Report
The settlement involves approximately 4.6 million full-size pickups and SUVs and 1.3 million midsize SUVs.
The EPA’s investigation, which did not allege the use of a defeat device like in the 2015 Volkswagen AG (OTC:VWAGY) case, highlighted the need for strong oversight to ensure public health benefits.
In June 2023, NHTSA reported that GM paid $128.2 million in fuel economy penalties for not meeting requirements for 2016 and 2017. GM had initially planned to use credits to cover its compliance shortfall but opted to pay penalties instead.
The final rule issued last month could cost GM up to $906 million in penalties through 2031, the report read.
GM stock has gained more than 19% in the past 12 months. Investors can gain exposure to the stock via First Trust Nasdaq Transportation ETF (NASDAQ:FTXR) and Invesco S&P 500 Pure Value ETF (NYSE:RPV).
Price Action: GM shares closed lower by 0.51% at $46.71 on Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by Jonathan Weiss on Shutterstock
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