The Biden administration reached a settlement with General Motors after determining that the automaker sold nearly six million cars that emitted more planet-warming carbon dioxide than the company had claimed, violating federal regulations.
G.M. will pay more than $145.8 million in penalties for selling vehicles between model years 2012 and 2018 that were required to comply with Obama-era auto tailpipe emissions standards designed to reduce planet-warming pollution.
An investigation by the Environmental Protection Agency found that in those years G.M. had sold about 4.6 million full-sized pickup trucks and sport-utility vehicles, and 1.3 million midsize sport-utility vehicles, that it claimed met the pollution standards, but in fact hadn’t.
“E.P.A.’s vehicle standards depend on strong oversight in order to deliver public health benefits in the real world,” said E.P.A. Administrator Michael S. Regan. “Our investigation has achieved accountability and upholds an important program that’s reducing air pollution and protecting communities across the country.”
The company has also voluntarily retired about 50 million tons of carbon dioxide pollution credits, which are issued by the E.P.A. and used by auto companies to make it easier to comply with increasingly stringent federal tailpipe emissions standards. G.M. estimates the value of the loss of the credits at about $300 million, reflecting what it paid for them a decade or so ago. However, the market value of those carbon credits varies, and a more recent government estimate of $86 per credit would put the value at about $4.6 billion.
Among the vehicles cited for the violations were several models of the Chevrolet Silverado, which has historically been one of the nation’s top-selling passenger vehicles, along with several models of the Chevrolet Suburban, the Chevrolet Equinox, the Chevrolet Tahoe, several models of the Cadillac Escalade and the GMC Yukon.
In a statement, the company admitted to no wrongdoing or noncompliance with laws or regulations. “We believe this is the best course of action to swiftly resolve outstanding issues with the federal government regarding this matter. GM remains committed to reducing auto emissions and working toward achieving the Administration’s fleet electrification goals,” the statement said.
The settlement comes as the Biden administration has sharply tightened federal tailpipe pollution standards. The new rules, finalized in March, are at the center of President Biden’s strategy to fight climate change. They are designed to dramatically reduce the climate-warming emissions from vehicle tailpipes by accelerating the nation’s transition from fossil-fuel powered vehicles to hybrid and all-electric cars.
Once fully implemented, the new rules are designed to ensure that the majority of new passenger cars and light trucks sold in the United States are all-electric or hybrids by 2032, up from less than 10 percent last year.
The loss of G.M.’s carbon dioxide pollution credits in the settlement could make it more difficult or expensive for the company to comply with those new rules.
The credits are intended to make it easier for automakers to meet the standards: For example, if one company is unable to completely meet the standards in a given year, it could make up the difference by buying credits from another company that exceeded them in that year. G.M.’s loss of credits means that it could be forced to meet the standard by building and selling more low-polluting or all-electric vehicles than it would have otherwise, or by purchasing still more expensive credits.