The End of the Electric Vehicle Manipulation: Implications for American Automakers and the Auto-Rentalization Sector, and What They Could Mean for the American Auto Industry
Here’s the catch: The US has never had an EV mandate, or any sort of law or regulation requiring American buyers to go electric. Instead, the previous administration tried to create a series of carrots and sticks designed to make electric vehicles more appealing to both the manufacturers who make them and the people who buy them. An executive order issued yesterday attempts to undo all that.
Now the bad news: at Trump’s behest, Congress is very likely to do away with the tax credit at some point in the near future. Republican legislators tried to kill the credit several times in the past. But with Democrats in control of the Senate, and Joe Biden in the White House, none of those efforts ever went anywhere.
“It’ll be hard to say how the auto industry will respond to that,” said Kathy Harris, director of clean vehicles at the Natural Resources Defense Council. The regulations that the EPA has put out have provided benefits to both the automotive industry and people in the US, as well as public health.
Automakers are pleading for stability, but they’re likely to get everything but. The president’s plan to impose 25 percent tariffs on Mexico and Canada could be even worse than his threats to eliminate EV incentives. New fees could force companies to re-engineering their supply chains, which are extremely complex and run through many different countries. Trump’s position is that tariffs will force automakers to bring more manufacturing to the US and create jobs. But most experts are predicting price increases — and if cars become more expensive, sales will drop, forcing dealers, suppliers, and manufacturers to start weighing job cuts.
Trump could confront resistance from his own party. A letter sent to House Speaker Mike Johnson in August 2024, signed by 18 Republicans, warned that “[p]rematurely repealing energy tax credits… would undermine private investments and stop development that is already ongoing.” The members represent states with some of the highest levels of clean energy investments as a result of the IRA.
From the campaign trail, President Donald Trump was consistent: He would “end the electric vehicle mandate.” He was sworn into office just hours after he signed the executive order.
“The executive order is simply directing the agencies to take a look at the regulations,” Harris said. Within 30 days, I think it’s time for agencies to report back with a list of regulations for review.
Autonomy in the Light of the 2020s: Towards an EV-friendly Modernization of the U.S. and China
Some of the more ambitious EV promises have already been canceled, but electrics are still coming. The future of the US auto industry is not clear. Other governments are still pursuing EV-friendly policies, and critics warn they’ll look increasingly toward China’s auto industry to get them through the transition.
In the meantime, automakers will continue to make and sell electric vehicles, and consumers will continue to be able to buy them. When the emissions standards kick in in late 2026 it usually takes manufacturers five years to build a car, so if you own a car that’s following the rules then it should be built and sold.
The executive order stated that the rules related to EV should be looked at to see if they are burdensome and interfering with consumer choice. The results of those investigations should be written into reports within 30 days.