Obama to Unveil Stricter Car Efficiency Rules

Tougher national emissions standards are coming for automobile manufacturers -- namely, a modified version of California's rules, the most stringent in the land.

Automakers have for some time wanted the government to offer clarity on the timing of the stricter regulations. Now they have it. Most likely on Tuesday, according to reports, the Obama administration will unveil plans that will require all cars and light trucks sold in the U.S. to curtail emissions by 30% and heighten overall fuel efficiency to 35 miles per gallon by 2016, four years earlier than that required by current federal law.

The new regulations will twine California's new tailpipe-emissions rules with the Department of Transportation's corporate average fuel economy standard.

The clarity should help carmakers plan for future models, even as General Motors strives to stave off bankruptcy and reach a deal with creditors and the federal government before its June deadline.

In response to the new plan, automakers are expected to drop litigation against California and other states that had been an effort to block state-specific emissions rules. In addition to California, thirteen states and the District of Columbia had joined forces in an attempt to put emissions rules on their books that were tougher than the federal standards.

Car stocks were higher Monday along with the broader market. Ford(F) shares were up a penny, while General Motors(GM) shares were up 8.3%, Daimler(DAI) shares up 4% and Toyota(TM) up nearly 3%.

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