StashLearn
Get the app
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Money News

Why Car Companies Are Fighting Over Climate Change

April 22, 2019

  • Leading car manufacturers say climate change is real
  • They wrote to the White House, challenging its rollback of efficiency regulations
  • Manufacturers including Ford and General Motors say they will follow strict mileage goals
2 min read

Climate change is real.

That’s the message from the Alliance of Automobile Manufacturers, which has made fighting global warming by reducing carbon emissions a goal since 2018.

The alliance, an industry group whose members include some of the biggest automakers in the country such as Daimler AG, Ford, and General Motors, also wrote to the White House last year to push back against the Trump administration’s plans to ease fuel efficiency standards for cars.

Cars and climate: Some background

In April of 2018, the Environmental Protection Agency announced it would pare back Obama-era standards that would require car companies to produce vehicles that get 37 miles per gallon by 2022, eventually hitting 50 miles per gallon by 2025.

Instead, car companies in their letter urged the White House to follow California’s lead. The state, and 16 others plan to continue following the Obama era mileage goals. These states have sued the Trump administration, which said it may try to revoke the state’s authority in the matter.

States may set their own fuel efficiency goals, under the Clean Air Act.

Automakers say they’re still concerned about climate change and the industry’s role in rising global temperatures.

But cars are getting bigger!

Some car manufacturers have started turning away from making smaller economy cars with better mileage range, focusing instead on less energy-efficient SUVs and other larger vehicles.

In 2018, Ford announced it would stop manufacturing economy and mid-sized cars altogether, in favor of its trucks and SUVs. Car companies are also exploring tax loopholes that may reward them for manufacturing larger cars, according to the Wall Street Journal.

Still concerned

Despite the turn toward bigger cars, automakers say they’re still concerned about climate change and the industry’s role in rising global temperatures.

“Automakers remain committed to increasing fuel efficiency requirements, which yield everyday fuel savings for consumers while also reducing emissions — because climate change is real and we have a continuing role in reducing greenhouse gases and improving fuel efficiency,” David Schwietert, executive vice president of federal government relations at the Alliance, wrote in last year’s letter.

Schwietert added that setting up two sets of rules could have negative consequences for the roughly seven million people who work either directly or tangentially in the car industry.

What are greenhouse gases?

Greenhouse gases, created primarily by industry and human activity, trap heat in the atmosphere and are thought to contribute to global warming. They include carbon dioxide from the burning of fossil fuels like coal and oil, methane from decomposing animal waste, nitrous oxide from agricultural activities, and fluorinated gas from industrial processes.

Interested in investing in companies that care about the planet? Check out these funds available on Stash.

Investing, simplified.

Start today with as little as $5.

Get the App

Believe in this industry?

You can invest in it!

See options on Stash!

Believe in this industry?

You can invest in it!

See options on Stash!

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

Next for you
Why the Car Industry is Still a Hotbed of Innovation

Investment Profile

Bonds Worldwide

An International Bond ETF on Stash

Learn more
Explore more articlesChoose a topic to learn more about
social media Retirement Careers market news love and money
Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.