Trump’s Tariffs Threaten U.S. Electric Vehicle Industry Growth
The U.S. electric vehicle (EV) industry is facing unprecedented challenges as President Donald Trump’s escalating trade war sends shockwaves through the global economy. The auto sector, particularly the EV market, is bearing the brunt of Trump’s tariff blitz, putting multibillion-dollar electrification plans at risk.
Current State of EV Adoption in the United States
Electric vehicles accounted for about 8% of new car sales in the U.S. in 2024, according to Motorintelligence.com. This growth can be attributed in part to expanded tax credits for EV purchases introduced during the Biden administration, which spurred consumer interest. Tesla dominated the U.S. EV market in 2024 with a 48% share, but its dominance is waning as other manufacturers like Ford (7.5%), Chevrolet (5.2%), and Hyundai (4.7%) enter the market with more affordable electric models.
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/shawmedia/AYYEYEJY6VAFRKA5FAVZ6A5NWY.jpg)
Challenges Facing U.S. EV Manufacturing
The Biden administration’s tax credits required automakers to source more EV components from the U.S. or allied countries to qualify for incentives. While significant investments have been made to build an EV supply chain across the country, tariffs on imported components, particularly from China, are increasing costs for manufacturers and consumers. Tesla, with its largely U.S.-based production, may be less vulnerable than other manufacturers.
Impact of Tariffs on EV Pricing and Inventory
Higher tariffs will likely lead to increased EV prices, potentially pushing consumers towards the used car market. However, used EVs may not offer significant savings. As a result, automakers may need to prioritize their investments, focusing on the most profitable models. Currently, manufacturers lose thousands of dollars on each EV sold but make profits from gas-guzzling pickup trucks and SUVs.
“Tariffs on our longstanding trade partners… introduces uncertainty and risk into an industry that is creating jobs and bringing new economic opportunities to communities across the country,” said Albert Gore, executive director of the Zero Emission Transportation Association.
Trump’s Policies and U.S. EV Growth
Trump’s policies have already stifled U.S. EV growth. He campaigned on ending Biden’s “EV mandate,” although it was not a mandate but rather incentives for manufacturers to increase their electric offerings. Trump also revoked Biden’s target for 50% of new vehicle sales to be electric by 2035 and is reevaluating emissions standards. Furthermore, he is likely to seek the repeal of tax credits for EV purchases.
The U.S. EV industry’s future hangs in the balance as Trump’s trade policies continue to evolve, threatening to derail the progress made in recent years.
