Detroit Carmakers Land Multibillion-Dollar Deregulatory Windfall - Arabian Post

(MENAFN- The Arabian Post) decoding="async" alt="" border="0" width="320" data-original-height="667" data-original-width="1000" src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-1b44705ad447e001.png" onerror="this.onerror=null;this.src='https://thearabianpost.com/assets/aparab-news-post.jpg?v3';" />

Detroit's legacy automakers are poised to reap enormous financial benefits under federal rollback of emissions rules and EV incentives. General Motors, Ford Motor Company, and Stellantis are redirecting billions of dollars previously earmarked for electric-vehicle development and regulatory compliance back into production of internal combustion engine vehicles and hybrids.

Ford, for example, has already saved approximately $1.5 billion in regulatory credits this year alone, a sum that experts say nearly offsets anticipated $2 billion net profit losses due to tariffs in 2025. The company is shifting funds from a cancelled three-row electric SUV project to support future hybrids and gas-powered models, enabling more lucrative ICE investments. GM, having spent $3.5 billion since 2022 to purchase regulatory credits to meet fuel-economy and emissions mandates, now anticipates significant cost savings beyond 2026, as fines for compliance shortfalls are eliminated. Stellantis is reviving its Hemi V-8 engine platform, favouring high-margin traditional vehicles over batteries. Analysts project this rollback may unlock a“multibillion-dollar opportunity” for Detroit's carmakers over the next two years.

The regulatory landscape has changed drastically: the Environmental Protection Agency plans to revoke its 2009 finding that greenhouse gases endanger public health, undermining the legal basis for limiting emissions from vehicles. At the same time, federal tax credits for electric-vehicle purchases have been eliminated and fines for failing to meet fuel-economy targets have been rescinded. Automakers had previously been able to offset those fines by purchasing credits-such as Tesla's $2.8 billion gain in 2024-which will now vanish.

This policy shift-while Detroit carmakers land multibillion-dollar deregulation windfall-is not without its detractors. Environmental advocates warn the rollback will suppress incentives for cleaner vehicles and impede U. S. efforts to reduce emissions. Analysts predict EV sales could plunge by as much as 40 percent by 2030, potentially triggering factory shutdowns and cancelled investments. This could result in an additional 49 million tonnes of carbon emissions, undermining climate mitigation goals.

See also Lamborghini Unveils Fenomeno, Its Most Powerful V12 Hybrid Yet

Industry observers caution that focusing on high-profit ICE models might compromise long-term competitiveness. Global markets are accelerating electrification, particularly in China and Europe. U. S. automakers risk falling behind in EV innovation, even as they capitalise on short-term gains. Cox Automotive analysts further suggest that increased production of larger, more expensive vehicles could push the average price of new U. S. vehicles above $50,000 in 2025, dampening overall auto sales and limiting affordability for mainstream buyers.

Amid the deregulation, some automakers are hedging their bets. Although Detroit is leaning into shorter-term margin gains, several firms continue to invest in EV infrastructure and begin planning more affordable electric models. Still, the current environment offers a lucrative reprieve for ICE platforms-Detroit carmakers land multibillion-dollar deregulation windfall, yet must balance this with future market dynamics.

Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com . We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.

MENAFN08092025000152002308ID1110032725