Donald Trump’s potential second-term as president of the United States has raised significant questions regarding the future of clean energy and electric vehicles in the US.
Trump’s controversial stance towards environmental policies and renewable energy was well-known. His potential return to the office would have a major impact on the EV sector and climate initiatives.
How a Trump Presidency might affect the EV Sector and Related Policies
The Inflation Reduction Act could roll back its support for EVs
The Inflation Reduction Act of 2022 is a major concern for the EV Industry.
The IRA has played a key role in the investment of EVs. It allocated $369 Billion to clean energy projects.
According to Manufacturing Dive, since its enactment the IRA catalyzed investments in EVs totaling approximately $76.6 billion.
Trump publicly announced his intention to freeze grants and subsidies related to the IRA.
In his proposal, he wants to impose a moratorium on new grants and giveaways. This includes the $7.500 tax credit that has been a key factor in encouraging consumers to adopt electric vehicles.
According to the Treasury Department report, EV purchasers have saved a total of $600,000,000 since the start of this year, on average, $6,900 for each vehicle.
The elimination of these incentives would likely slow down the rate at which EVs are adopted, affecting automakers such as General Motors Ford and Tesla.
Changes to the regulatory framework for EVs, emissions and other vehicles
Trump’s skepticism about environmental regulations also extends to new rules from the Environmental Protection Agency (EPA) on tailpipe emission.
The EPA standards aim to lower carbon emissions through a promotion of plug-in and electric hybrid cars. The proposed regulation, aiming for 56% new vehicles to be sold as electric by 2032 will force the automotive industry to adopt greener technologies.
Trump has promised to rescind the EPA rules that he calls an unfair “EV mandate”.
Trump’s promise to eliminate these standards could harm efforts to increase EV sales, reduce emissions and boost EV sales.
He has suggested a return of a more lax regulatory environment, leading to higher emissions and slower progress against climate change.
Chinese carmakers and US auto production
Trump’s stance towards international trade, and Chinese automakers is a stark contrast with his environment policies. This is another aspect of Trump’s potential impact on the EV market.
Trump advocated during his election campaign for the construction of American car factories by Chinese automakers, or for tariffs up to 200% for vehicles imported from China.
He has endorsed a shift in production to the US from Mexico, which may affect projects that are already underway or planned by Tesla and BYD.
Tesla’s planned factory in Mexico announced earlier this summer with a $15 billion investment could be delayed or altered depending on Trump’s policies.
Trump’s approach to trade could add uncertainty for global investment plans and the supply chain as the Biden Administration prepares to raise tariffs on China made EVs.
As new information becomes available, this post may change.
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