GM U-turn On Trump-backed Lawsuit

General Motors withdrew on Monday from a challenge backed by Donald Trump's administration to California's fuel economy rules that endorse President-elect Joe Biden's policy for boosting the use of electric auto.

In October 2019, GM -- along with Toyota and Fiat Chrysler -- announced they supported the challenge to California, arguing that fuel economy rules should be set federally.

The Trump administration had taken a confrontational posture towards California's rules, which adopt stricter environmental standards than those set at the federal level.

But on Monday, the US auto giant said it was "immediately withdrawing" from the lawsuit and invited other automakers to follow suit, according to a letter from GM Chief Executive Mary Barra to environmental groups.

Barra, who met Biden earlier this month and has had a fractious relationship with Trump, said she was "confident that the Biden administration, California and the US auto industry... can collaboratively find the pathway that will deliver an all-electric future."

Barra said she was "inspired" by Biden's "Build Back Better" plan, "which outlines a clear intention to expand vehicle electrification in the United States, create one million jobs, install 550,000 charging stations, and position American auto workers and manufacturers to win the race for electrification."

Biden welcomed the move, calling it "encouraging news for our economy, our planet, and the long-term success of American autoworkers.

"GM's decision reinforces how shortsighted the Trump administration's efforts to erode American ingenuity and America's defenses against the climate threat really are," he said, adding that the manufacturer's choice would have a "positive ripple effect" on the manufacturing economy.

GM announced last week that it will boost investment in electric and autonomous vehicle technology by US$7 billion through mid-decade as it unveils more all-electric vehicles.

Barra has clashed with Trump a number of times, including earlier this year, when the US president accused GM of dragging its feet in shifting production capacity to build ventilators for the battle against the novel coronavirus. (AFP)