Photo source: FMT
The recent election of Donald Trump as the 47th President of the United States is anticipated to create uncertainty for the electric vehicle (EV) industry. Trump’s victory over Vice President Kamala Harris signals a probable shift in policies that have supported EV growth under the Biden administration.
Throughout his campaign, Trump and his Republican allies have expressed scepticism towards EVs, arguing that they are being imposed on consumers against their will. The President-elect has pledged to scale back or eliminate various environmental regulations and incentives that have promoted EV production and adoption, including key provisions of the Inflation Reduction Act (IRA) of 2022.
While industry experts suggest that completely dismantling the IRA would be challenging, Trump could potentially use executive orders or other policy measures to reduce or restrict EV subsidies. It is expected that he may focus on targeting consumer tax credits for EV purchases, which currently offer up to USD$7,500, rather than industrial production incentives.
It is worth noting that many EV-related investments under the IRA have been made in Republican-leaning states such as Ohio, South Carolina, and Georgia.
Automotive industry leaders maintain that their investment strategies are not solely based on White House occupancy, though they acknowledge that administrative changes do require adaptations.
“Anytime there’s an administration change, it’s an interesting time for the industry because we have to go through new policies and regulations and have to bring new people up to speed on who we are and what we do. Administrations sometimes change every four years, so we don’t really do a lot of modifying the strategy,” stated David Christ of Toyota North America.
Wall Street analysts predict that traditional automakers, particularly General Motors, Ford, and Stellantis, could benefit from a second Trump term and Republican control of Congress.
Conversely, EV startups like Rivian and Lucid might face challenges under a Trump presidency. Tesla, however, appears to be an exception, with its stock price surging following the election results. This may be partly due to CEO Elon Musk’s vocal support for Trump during the campaign.
The new administration is also expected to challenge California’s authority to set its own vehicle emissions standards, which currently mandate that 35% of 2026 model year vehicles be zero-emission. This regulation is part of a more extensive plan requiring all new vehicle sales in California to be zero-emission by 2035.
Industry data shows that EVs currently represent 10% or more of local market share in only 11 states and Washington D.C. Experts anticipate that Trump may also seek to roll back or freeze Corporate Average Fuel Economy (CAFE) standards for model years 2027-2031.
Consequently, the future trajectory of EV adoption and related policies in the United States remains uncertain as the industry adapts to the new political climate.