Ford Motor Co. (F) is doubling down on affordability. CEO Jim Farley announced Wednesday that the automaker will ramp up investments in affordable vehicles after President Donald Trump officially rolled back the Corporate Average Fuel Economy standards—those regulations that have governed how far manufacturers' vehicles must travel on a gallon of fuel.
The Affordability Pitch
Speaking at a White House press conference, Farley made Ford's position clear: the company plans to "invest more in affordable vehicles" and use this opportunity to "take the lead on" American-made cars. It's a strategic bet that looser fuel economy requirements will translate into cheaper sticker prices for consumers.
Transportation Secretary Sean Duffy quickly amplified the message on X, sharing video of Farley's comments. "Letting auto manufacturers make the cars people want isn't just common sense," Duffy wrote, claiming the rollback will shave "$1,000 on the average car price." He went further, projecting total savings of "$109 billion" for Americans over the next five years, before declaring Trump "the affordability president."
Trump Eliminates "Ridiculously Burdensome" Standards
Trump didn't hold back in his characterization of the CAFE norms during the announcement. "We're officially terminating Joe Biden's ridiculously burdensome, horrible, actually, CAFE standards that impose expensive restrictions," he said.
These standards aren't trivial—they carry real financial consequences. Stellantis NV (STLA) recently paid over $190 million in CAFE fines, illustrating the cost of non-compliance under the previous regime.
Broader Implications for the Auto Industry
The CAFE rollback is part of a larger regulatory shift. The Trump administration's EPA previously signaled plans to rescind the 2009 Endangerment Finding, which serves as the legal foundation for much of America's climate action and emissions regulations.
This creates a ripple effect throughout the industry. Removing legal pressure to meet strict emissions standards could also make Zero Emission Vehicle credit sales redundant—a development that matters tremendously for companies like Tesla Inc. (TSLA) and Rivian Automotive Inc. (RIVN), which have generated substantial revenue from selling these credits to traditional automakers.
Meanwhile, a Senate committee led by Sen. Ted Cruz (R-TX) is taking aim at automotive safety features, questioning requirements for automatic emergency braking and child reminder systems. The stated concern? Vehicle affordability.
Ford's EV Reality Check
Ford's renewed focus on affordability comes against a stark backdrop: collapsing EV sales. The company sold just 4,247 electric vehicles in November, a stunning 60.8% drop from the 10,821 units sold in the same month last year.
This decline aligns with Farley's earlier prediction during Ford's third-quarter earnings call, where he suggested EV adoption in the U.S. could stall around 5% as consumer demand for electric vehicles weakens.
Market Reaction
Ford shares climbed 1% to $13.09 at market close on Wednesday, then edged up another 0.30% to $13.13 in after-hours trading. The stock performs well on momentum, value, and quality metrics while offering satisfactory growth, with favorable price trends across short, medium, and long-term horizons.