Shares of Bharat Forge tumbled 4 percent on March 13 in anticipation of a potential business impact, after the US Environmental Protection Agency (EPA) said it will roll back a series of Biden era regulations aimed at reducing pollution and address climate concerns.
The move is seen as a step away from policies for electric mobility, and the shares of the company were trading sharply lower during the trading session.
US EPA administrator Lee Zeldin on March 12 said he will roll back 31 environmental rules, including norms on pollution from coal-fired power plants, climate change and electric vehicles. He called this the ‘most consequential day of deregulation in American history’, and said the roll back will remove several ‘hidden taxes’ and regulatory costs, lowering the cost of living for American families. "Our actions will also reignite American manufacturing, spreading economic benefits to communities," news reports quoted him saying.
"Zeldin announced the agency will reconsider the Model Year 2027 and Later Light-Duty and Medium-Duty Vehicles regulation and Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles. In addition to imposing over $700 billion in regulatory and compliance costs, these rules provided the foundation for the Biden-Harris electric vehicle mandate that takes away Americans’ ability to choose a safe and affordable car for their family and increases the cost of living on all products that trucks deliver," US EPA said.
Recently at a conference, Bharat Forge had mentioned that before the EPA regulation take effect in 2027, there could be a surge in the pre-buy demand for its Class 8 trucks in 2026. However, if EPA does not implement the rule in 2027, the expected surge in the early demand for Class 8 trucks may not happen, Bharat Forge added.
Sales of US-based Class 8 trucks reportedly contribute to 15 percent of Bharat Forge's standalone revenue.
"The American auto industry has been hamstrung by the crushing regulatory regime of the last administration. As we reconsider nearly one trillion dollars of regulatory costs, we will abide by the rule of law to protect consumer choice and the environment," EPA Administrator Zeldin said.
The proposals are will now go through a lengthy process of approvals in order to be implemented.
(With inputs from CNBC-TV18)
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