Al Root

Shares of traditional auto makers rose on Wednesday, boosted by more potential policy changes that favor gasoline-powered cars over their all-electric peers.

Ford Motor stock was up 1.2% at $13.12, while the S&P 500 and Dow Jones Industrial Average were up 0.3% and 0.7%, respectively. General Motors shares were up 1.5% at $74.80. Shares of Chrysler parent Stellantis were up 4.9% at $11.48.

Helping catalyze the daily rally was a post on X from Ford CEO Jim Farley: "Looking forward to meeting with President Trump and [Transportation Secretary Sean Duffy] today."

That post came after multiple media outlets reported that the Trump administration is poised to roll back Biden-era fuel economy standards. Barron's has confirmed those reports.

"As America's largest auto producer, we appreciate President Trump's leadership in aligning fuel economy standards with market realities," Farley said in an emailed statement. "We can make real progress on carbon emissions and energy efficiency while still giving customers choice and affordability. This is a win for customers and common sense."

Farley has soured on all-electric cars in recent months, saying they should account for about 5% of U.S. car sales. All-electric cars account for roughly 15% of new car sales in Europe and 30% in China. All three regions subsidize EV purchases to varying extents. U.S. car buyers recently lost the federal $7,500 purchase tax credit, which was eliminated in President Trump's tax and spending law.

Now those CAFE -- short for corporate average fuel economy -- standards will be reset. For 2025, existing rules essentially mandate that a passenger vehicle, on average, travels about 48 miles on a gallon of gasoline. There are adjustments for electrified vehicles and trucks.

Selling EVs and more efficient gasoline-powered cars adds costs for auto makers. Lower CAFE standards mean lower compliance costs, a reason the stocks are rallying.

EV stocks aren't getting hurt by the move, though. For the most part, investors know which direction policy is trending. Earlier in 2025, President Trump took away California's ability to regulate its air emissions. California standards, followed by many states, were a driving force for EV adoption.

Rivian stock was down 0.4% in midday trading. Tesla shares were up 2.8%.

Write to Al Root at allen.root@dowjones.com

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December 03, 2025 13:52 ET (18:52 GMT)

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