Trump’s EV Actions: What’s Changing for Car Buyers?
President Trump’s administration has signaled a shift in electric vehicle (EV) policy, leaving car shoppers and the auto industry wondering what the future holds. While the direction is clear, the specifics are still being worked out.
One of Trump’s first acts in office was to eliminate President Biden’s goal that 50% of all new car sales be electric by 2030. This target was largely symbolic, setting the tone for other policies. Trump’s actions don’t immediately change the availability of consumer tax credits, or state mandates and federal emissions rules. However, this step indicates the administration’s intention to ease regulations on the auto industry.
Revising Regulations
Trump has identified the “electric vehicle mandate” as his target. Federal law does not explicitly require the sale of EVs, but regulations to lower vehicle emissions effectively push automakers to sell more of them. To change these regulations, agencies like the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) must first propose adjustments. Then, public comment periods follow, before the agencies can implement any changes. Experts anticipate this process will move faster than during the first Trump administration, as his team now has more experience.
Congressional Crossroads
The Trump administration also objects to federal incentives that encourage EV sales and domestic production, such as tax credits, viewing them as market distortions. Eliminating these incentives would require an act of Congress. While Republicans control both the House and Senate, and are eager to cut spending, they are also keen on maintaining U.S. manufacturing and jobs. Funds for clean energy projects have been directed toward Republican-leaning states that are creating an “EV battery belt.” These funds resulted in hundreds of billions of dollars of private investment. The fate of these tax credits is therefore uncertain.
Potential Legal Battles
Some of Trump’s initial executive orders have immediate effects. The administration has, for example, frozen funds for building new EV chargers. Much of the money for highway chargers and community chargers has already been allocated, but some funds have not yet been distributed. Court decisions will determine how much of this funding Trump can block. The same applies to the potential legal fight between Trump and California over that state’s strict EV mandates, which require 100% of new vehicles to be zero-emission by 2035, a requirement that the federal government is ordering agencies to overrule. General Motors CEO Mary Barra mentioned that California’s regulations may be changing.
Consumer Demand and the Future.
Trump’s actions emphasize “consumer choice.” Auto industry leaders have welcomed the possibility of eased regulations because they recognize that the market drives product decisions. Electric vehicles currently make up about 10% of U.S. sales, but a recent survey showed that the percentage of new vehicle shoppers interested in purchasing an EV hit a two-year high. Automakers argue that because EVs are fun to drive and cheaper to own, they may eventually capture a larger share of the market.
There is uncertainty on the policies surrounding EVs, and some industries are concerned about the potential effects of the changes on the supply chain. The global landscape is moving toward EVs. Automakers must continue developing EV tech, because other countries are still concerned about climate change.
Critical Minerals: A Point of Agreement
While the EV supply chain faces uncertainty, one area where Trump has expressed continued support is the raw materials for EV batteries. His administration views domestic critical mineral supply as a national priority, a stance shared by the Biden administration. Support for critical minerals has been bipartisan, and is viewed as critical to compete with China and build American jobs.
