GM and Stellantis paid record fuel economy fines

General Motors and Stellantis paid a combined $363 million in penalties for failing to meet U.S. Corporate Average Fuel Economy (CAFE) requirements for recent model years, Reuters reported Friday.

The record amount includes $235.5 million paid by Stellantis for 2018 and 2019 model-year fuel economy shortfalls and $128.2 million for GM covering model years 2016 and 2017, according to the report. It cites records showing the GM and Stellantis penalties were paid in December and May.

Stellantis, which previously paid a total of $156.6 million in penalties for model years 2016 and 2017, told Reuters that the latest penalty “reflects past performance recorded before the formation of Stellantis, and is not indicate of the company’s direction.”

Changes in estimated real-world fuel economy (from EPA 2022 Automotive Trends Report)

Changes in estimated real-world fuel economy (from EPA 2022 Automotive Trends Report)

Stellantis was created in 2021 from the merger of Fiat Chrysler Automobiles (FCA) and the PSA Group. FCA once depended on buying emissions credits from Tesla to compensate for a lineup heavy on pickup trucks and SUVs. In 2021, Stellantis said it wouldn’t need Tesla emissions credits, in Europe at least. But the EPA’s 2022 Automotive Trends Report shows Stellantis as last among large automakers in U.S. real-world fuel economy, as of the 2021 model year.

GM told Reuters that it still plans to use emissions credits, either ones it’s saved up or ones it has purchased from other automakers, in certain situations. But this time the automaker chose to pay civil penalties instead of using credits—the first time it has paid a fine in the 40-year history of CAFE program, according to the report.

Both automakers have big EV plans. Stellantis is pushing ahead with the development of several dedicated EV platforms for a wide range of vehicles. GM is betting its future on EVs, and in an odd example of cashflow, federal funds are being provided as a loan to its Ultium battery joint venture with LG.

2019 Dodge Charger SRT Hellcat

2019 Dodge Charger SRT Hellcat

Right now, though, Stellantis and GM both depend on full-size truck sales, where fuel economy has lagged for decades and not improved at the same rate as passenger vehicles. Steeper fuel economy rules finalized last year will bring more hybrids and EVs sooner—and, perhaps, fewer gas-guzzling muscle cars like Stellantis’ Dodge Hellcats—but it remains to be seen how much this will affect the profitable pickups.

The federal government is also considering higher fines for automakers failing to meet fuel economy standards. So the record penalties paid by GM and Stellantis may soon be surpassed.

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