How I Made $5000 in the Stock Market

Ford, GM, Stellantis Stocks Rise. Thank President Trump.

Dec 03, 2025 13:52:00 -0500 by Al Root | #Autos

Ford F-150 trucks on an assembly line in Michigan. The Trump administration is getting rid of the Corporate Average Fuel Economy standards. (Bill Pugliano/Getty Images)

Key Points

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

Ford Motor stock rose 1.2% to $13.11 on Wednesday, while the S&P 500 and Dow Jones Industrial Average were up 0.3% and 0.9%, respectively. General Motors shares gained 1.4% to $74.68. Shares of Chrysler’s parent, Stellantis, rose 4.5% to $11.46.

President Donald Trump spoke in the Oval Office, saying he has instructed Transportation Secretary Sean Duffy to rescind the “horrible CAFE standards,” which govern how efficient cars must be. The acronym stands for Corporate Average Fuel Economy.

The car stocks were up most of the trading day, following a post on X from Ford CEO Jim Farley. “Looking forward to meeting with President Trump and [Secretary Duffy] today,” he wrote.

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“Today is a victory for common sense and affordability,” said Farley in the Oval Office, joining the president who made the announcement Wednesday afternoon. Aligning the CAFE standards with consumer demand was a positive for the industry, he said.

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 Trump’s tax and spending law.

“It’s a great day for us,” said Stellantis CEO Antonio Filosa. “We see CAFE regulation reconciled with real customer demand,” adding that better standards were part of his company’s decision to boost U.S. production.

There is a new proposed rule that runs some 575 pages long. The new system, if adopted, will essentially mandate improvements of 0.3% to 0.5% a year on average from now until 2031, with 2022 as a base year when CAFE required an average fuel economy of about 36 miles a gallon for passenger cars and 28 miles a gallon for light trucks.

For 2025, the prior 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 rallied.

Trump suggested that auto makers could also sell smaller vehicles that are cheaper and more fuel-efficient. That might be a challenge due to consumer demand as well.

Americans traditionally haven’t bought small cars. Volkswagen stopped producing the Beetle for the U.S. in 2019, citing weak demand.

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

Rivian stock rose 1.7%. Tesla shares added 4.1%.

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