Trump routinely trashes electric vehicles, even with Elon Musk on his team, and he has long hated wind power. He belittles solar power, but, with solar-loving Elon Musk by his side, perhaps he will leave solar alone? Needling down, though, what is likely to happen with EV policies and EV sales in the United States?
Trump is as transactional as pretty much anyone can get. If you can do something for him, he may do something for you, or at least tell you he will. With that trait, it’s extremely hard to know what he will do. Countless staff and colleagues have said that there would constantly be jostling in the White House to be the last person by his side and in his ear before he took action on something — because that was the only way to get your way.
We can talk about what he did last time in power (reduce fuel economy standards, let EV tax credits expire, and go far beyond previous administrations in trying to get California’s right to require higher fuel economy standards repealed). But will these be his priorities if Elon Musk is hissing in his ear?
The following are a handful of possibilities, and then what I think they could mean for EV sales in the United States in coming years:
He could again weaken US fuel economy standards (highly likely), which will almost certainly lead to automakers producing fewer EVs in coming years.
If all of that does happen, US automakers will probably become less and less competitive, more and more detached from the global auto market, and smaller and smaller.
It will also open the door for more competitive EVs from other automakers to come in and disrupt the industry.
He might again attack California’s right, under the Clean Air Act, to enact stronger fuel economy standards. One would hope not, but if he does, I don’t think he’ll win in court — even with our highly imbalanced Supreme Court. But who knows?
It’s possible Trump and Republicans will repeal the Inflation Reduction Act and kill incentives for EV factories, battery factories, battery cell factories, and battery material mining and refining. I think that’s unlikely because it’s not really that popular to kill projects, programs, and policies that create jobs in the US. Also, Tesla benefits a lot from those.
Though, who knows? The fossil fuel industry is still king in the Republican Party. And, as noted, Trump loves to trash electric cars. Of course, if the IRA is killed, the US will become MUCH less competitive across these EV production and supply sectors, and the US will have fewer factories and fewer jobs down the road — again, making our EV industry less competitive.
Trump may or may not kill the NEVI program. Though, as the former Tesla executive referenced in that story has explained, Tesla gets a ton of support from the NEVI program. It seems unlikely Trump would kill a program that supports his new buddy’s company. But, again, who knows? Musk himself has talked negatively about it despite Tesla benefiting from it.
It’s very unlikely any new stimulus programs or support will be provided to EVs.
Overall, I think automakers will step off the pedal a bit more with EV production and sales targets (I think they already started doing that in anticipation of a Trump victory before Biden dropped out of the race). So, I believe EV sales growth will be slower from them in the US than it is among European automakers in Europe, Chinese automakers in China, or Chinese automakers everywhere else.
There are natural benefits to EVs, but if US automakers aren’t pushed, they’ll try to delay the transition to EVs as much as possible. The more they delay at home, though, the more they will fall behind globally. RIP, “Big 3.”
I don’t see any boost Tesla is going to get from a Trump administration, except perhaps from lower interest rates — which we’ve been expecting will come in the next year or so no matter who won. So, organic growth (or shrinkage) is still most likely here.
Will Trump drop the 100% tariff on Chinese EVs? Unlikely — unless Xi Jinping pressures Elon Musk to make it happen, and Trump gives in to Musk on it.
Will Trump do anything to require better and faster growth of EV charging? Unlikely.
The key matter is probably fuel economy standards, and I think those will be weakened, weakening EV efforts from automakers and leading to fewer EV sales than we’d see otherwise.
There are a lot of wildcards. Who knows what will happen? What will definitely not happen is an extension or expansion of the IRA, Bipartisan Infrastructure Law, or any other progressive policies on EVs.
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