One of Donald Trump’s main campaign themes was ending the federal electric vehicle mandate, which he calls a China-first policy that taxes the electric grid, subsidizes forced labor, and destroys American jobs. This means rescinding Biden Administration subsidies and mandates – but what else will he be able to do?
The worldwide revolt against the one-engine-fits-all strategy long favored by the European Union began in Italy, just two months after the EU struck a provisional deal on a new vehicle emissions law that would have banned the sale of internal combustion engines by 2035.
Italian Prime Minister Giorgia Meloni’s government raised objections to the scheme, as the march toward an EV-only vehicle fleet had already hit the Italian auto industry with job cuts. Transport Minister Matteo Salvini argued that ICE vehicles were already running on carbon-neutral synthetic fuels.
German Finance Minister Christian Lindner then demanded an exception in the EU mandate for hydrogen-derived, carbon-neutral synthetic e-fuels, on which Porsche had already invested $75 million. Germany Transport Minister Volker Wissing, insisting that anyone serious about climate-neutral mobility must rely on all available options, did not understand why anyone would want to “ban some technologies.”
Auto industry veteran Andrew Graves suggested that e-fuels could be the answer for keeping older model ICE vehicles on the road. He also cited the significant risk that there could not be enough EV charging stations or battery manufacturing plants to satisfy demand by 2035.
European automakers found themselves in a losing battle against cheap (subsidized by President Xi’s government) Chinese imports and a declining interest by consumers in battery-electric vehicles. Unherd reported in July that Porsche was scaling back its sales targets for EVs due to a 25% drop-off in sales, admitting that “the transition to electric vehicles will take longer than we assumed.”
In the U.S., a Gallup survey found that the number of Americans not considering an EV had risen while the number considering such a purchase had fallen. President Trump has vowed to make it difficult for the Chinese to sell their EVs in the United States, and European governments also imposed tariffs to try to protect their automakers from total collapse.
General Motors delayed the development of new EV models and postponed the opening of an electric truck factory, while Ford shut down production of its Lightning EV trucks after admitting to losing over $47,000 for each EV it sold.
While many automakers are still building EV passenger vehicles, there is a growing consensus that battery-electric is not the way to go for 18-wheelers and other heavy trucks or even for the pickup trucks that millions rely on to haul smaller loads.
Peter Rawlinson, whose Lucid Motors manufactures luxury EVs, told Axios that internal combustion engines – not battery-electric vehicles – are the only realistic option for pickup trucks. The EV pickup “is the wrong product, and so we’re seeing that companies are not making a viable product by trying to make an electric pickup truck.”
Even before Trump’s November victory, automakers were cutting back on EV production promises made to placate the Biden Administration (and presumably, states like California that have passed stringent EV mandates).
Toyota in early October announced it would delay production of its first U.S.-made electric vehicles at its plant in Georgetown, Kentucky, until 2026, even as it remained committed to an EV SUV plant in Princeton, Indiana, and a lithium-ion battery plant in North Carolina.
Hyundai as of October had started production of its Ioniq 5 electric crossover at a huge plant in Bryan County, Georgia, that will build six EVs for Hyundai, Kia, and Genesis, aided by a battery factory joint venture with LG Energy Solutions. The company anticipated building 300,000 EVs a year, with a maximum capacity of 500,000 a year depending on demand. The facility will also be able to build hybrids, which are much higher on the Trump Administration’s pecking order.
But what happens to the EV market if the subsidies and the mandates are gone? The Biden Administration apparently squandered billions in a purported campaign to build out an EV charging network, and the super-fast charger is largely a mirage as of today. Auto insurance rates for EVs have soared in the wake of spontaneous fires, and growing power outages even in EV-mandate states are another brake on consumer confidence.
During his campaign, President-Elect Trump railed against hydrogen vehicles, which he said were prone to tragic explosions, but automakers from Europe to Asia are already putting hydrogen-powered engines and other new technologies on the market or in heavy development.
While Jaguar Land Rover in the United Kingdom has demanded “more effort” to make buying and owning an electric car more appealing, the industry worldwide is seeing production and sales of EVs in decline – a decline likely to be exacerbated by a subsidy-killing Trump Administration.
The British government, though, remain as committed (if not more so) than the Biden Administration to forcing EVs upon an unwilling public. While short-lived Prime Minister Rishi Sunak extended the deadline from 2030 to 2035 for a total phaseout of ICE engines, the nation is still far from (at just 3.5%) of the 22% minimum EV sales by 2025 and 80% by 2030.
The deeper issue in trying to replace a 125-year-old technology onto a public that today operates 1 billion ICE vehicles is that EVs run on an entirely different platform that is not amenable to other technologies – one very different even from the hybrid engine that works quite well in ICE vehicles. So does hydrogen, and so do e-fuels. Yet some governments still believe that resistance is futile – that their mandates will prevail even against a tidal wave of dissent.
A recent article in Wired speculates that a President Trump will back away in part from his pledge to “end the electric vehicle mandate on day one,” if only to avoid alienating strong supporter and Tesla CEO Elon Musk. Will he go along with the Heritage Foundation’s call for ending EV tax credits and other subsidies and backing away from ever-more-stringent fuel economy standards to level the playing field for ICE vehicles?
Trump has said clearly that he believes there is a place for EVs in the U.S. auto mix while sharply criticizing the ICE-friendly hydrogen-powered vehicle market (even though Tesla now plans to introduce its first hydrogen vehicle in 2026).
What is certain is that Democrats, wedded to an EV-only future, will try to obstruct any effort by the Trump Administration to roll back the Biden mandates, and that some Republicans may join them. Moreover, some of the EV facilities are in states whose votes Trump needed to win in 2024 – and it is difficult for politicians to vote to end the flow of federal cash into their states.
Four principles will likely guide the Trump Administration’s actions on the auto industry in the next several months: (a) tariffs to protect domestic auto industry jobs, (b) fighting against mandates that tilt the playing field toward an EV technology that is both widely unpopular especially for load-carrying vehicles, (c) lowering the overall cost of owning reliable transportation for American consumers, and (d) consumer choice, not government mandates, must drive the auto and truck marketplace.
Duggan Flanakin is a senior policy analyst at the Committee For A Constructive Tomorrow who writes on a wide variety of public policy issues.
This article was originally published by RealClearEnergy and made available via RealClearWire.
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My recollection is that Tesla no longer gets federal EV subsidies. The program was built with a limit of 500,000 vehicles by any one company. Tesla passed that total a while ago. They even dropped their prices as the subsidies were phased out to compensate.
I also recall Musk saying recently that he didn’t think EV’s should be subsidized. Since he can’t collect them anymore, killing them would raise the price for all makers still under the 500,000 car cap.
So while I think Musk should be called out for happily collecting those subsidies and now trying to get his competition cut off from them, I have no worry that he will try and talk Trump into keeping them.
I’m against subsidies of any kind, so recalling the principle of the enemy of my enemy is my friend, Musk is a friend. The road he took to get there no longer matters.
Besides, he bought X and saved freedom of speech.
That was the old incentives. The IRA created new ones that are unlimited.
Trump has already said that he plans to cancel every part of the IRA that he can, especially the EV tax credits.
Would you believe anything he said after his new appointments?
Everything!!!
Everything that he can with Executive Orders and everything that can get passed the Dems who will try and stonewall everything they can in the next 4 years
I like all Trump’s appointees with the exception of Gaetz.
I’m not a Gaetz fan because of what he pulled on former Speaker of the House Kevin McCarthy, not because of some unfounded sexual allegations. Biden’s Department of “Justice” investigated Gaetz and dropped the case. I would think if anything were there Biden would not have dropped the case.
Even though I don’t like Gaetz, I would love to see him heading up the DOJ. If you want to shake things up, he would certainly do the job.
And the Department of Justice does need a massive overhaul.
vboring is correct about the IRA-related EV credits for Tesla.
Per the Car & Driver article of June 17, 2024 (https://www.caranddriver.com/news/g43675128/cars-eligible-for-ev-tax-credit/ ), the following Tesla EVs are eligible for up-to-$7,500 tax credits:
— 2024 Tesla Model 3 Performance, Long Range
— 2024 Tesla Model Y
— 2024 Model X
Separately, according to CarsDirect (https://www.carsdirect.com/deals-articles/2024-tesla-cybertruck-qualifies-for-7-500-tax-credit ) the 2024 Tesla Cybertruck also qualifies for the up-to-$7,500 federal tax credit.
Ouch. I haven’t been following Tesla that closely for years, nor the IRA. Well if that’s the case, they need to be killed and I don’t think Musk will stand in the way of that. He’s built Tesla, SpaceX, acquired X and fixed it. Now he’s got a new shiny toy called DOGE.
A tax credit isn’t the same as a subsidy. A subsidy costs the taxpayer money whereas a tax credit doesn’t.
Whether it’s a $7500 tax credit or a $7500 subsidy, they both have the same -$7500 affect on the governments balance sheet that tax payers must eventually pay for.
A $7500 tax credit doesn’t equate to $7500 off the balance sheet. Typically it would be 22% of it so $1650
I understand why people dont want to subsidise others by giving them money but there is a certain amount of irony when the complaint is they’re not giving it to you.
I see the tax credit in the US is a straight reduction in tax so yes it could be $7500 less to the government. Many people here would normally applaud that.
If Trump 47 can manage to Abolish the IRS, tax credits become meaningless
As does Federal Withholding
Does that actually relate to any campaign promise?
Even though the Supreme Court killed the first attempt at an income tax as flat out unconstitutional, and that the Sixteenth Amendment was not passed by any state under US Constitutional requirements but was declared passed by deliberate fraud in DC, there is no way Trump could have enough power to overcome its operation. The most possible would be something like what Reagan did, sort of force a partial rewriting of the Code, which unfortunate also had the result of allowing powerful interests to slip in over 1000 very special, very limited provisions for very special people.
Sure . . . right . . . right . . . the Federal tax income that is lost from handing out tax credits doesn’t ever need to be replaced by increasing taxes on citizens elsewhere . . . r-i-i-i-i-g-h-t.
In fact, per your logic the US government should be giving out, oh say, $50,000 tax credits to every US taxpayer every April 14 because those credits won’t cost the taxpayers a penny . . . money growing on trees and all that!
They dont cost the taxpayers a penny until the government spends it. They cant spend what they dont have. Or at least they shouldn’t spend what they dont have. There are 35 Trillion reasons why I’m wrong on that.
Subsidy based on a fantasy is a prescription for disaster.
The battery electric vehicle (BEV) has become the largest part of the subsidy fantasy. Attached is a plot from Bloomberg to which I added data on grid investment from 2015 to 2020 (IEA), about $300 Billion per year.
The ‘investment’ in the energy transition is dominated by the BEV, the electric heat pump, and by grid construction to transport electricity; an essential infrastructure if the plan is to electrify transport and heating, as is apparent. All three are investments in CONSUMPTION.
That is a disaster and raises the question ‘from where is the electricity to come’. The enhanced grid structure is required only when intermittent renewable energy (IRE) dominates the power sources. The concept, apparently, is that, during ‘dunkelflaute’ for example, countries dependent upon IRE will import power, via that enhanced grid, from countries with electricity, so again, I ask from where is that electricity to come? It is ONLY those countries with dispatchable base power which can export to their powerless neighbors who have destroyed their internal base power, but then, NO country will have base power if and when Net Zero 2050 is enacted.
Major costs for the grid system to accommodate W&S are necessary, and would still be necessary if W&S were 100% reliable.
I like principle (d). Consumer choice. Governments, get out of our way. Don’t tell us what we need to do. If the global warming problem were so bad, nobody would have anything to do with fossil fuels.
Hallelujah, praise Trump and recycle the collection plates
Can I get a Federal subsidy on Uber or Lyft when I ride in one of their EV’s please? If not, why not?
Federal subsidies are given to EV purchasers, not users. Simplifies the bookkeeping.
I thought the idea in issuing subsidies was to encourage people to save the earth. Apparently, it’s only for people who pay large corporations for their products.
EV market share is minuscule, even allowing for taxpayer’s subsidies. Pull all ‘green’ subsidies and let the market prosecute the case for EV’s. Same for grid scale renewables.
The IEA estimate that the share of EVs in the total global car fleet will reach 5% by the end of 2024. 80% of these will be in China.
They also note that sales of PHEVS in the first half of 2024 rose by 70% in China, compared to a 15% rise in BEVs. In the US PHEVs rose 25% and BEVs 5%
IEA ‘World Energy Outlook 2024’ (Oct 2024)
I always said banning ICE will not happen. But within the EU they keep pushing. These narcistic politicians just won’t fold even it destroys the economy.
EVs are not the car the majority need, EVs are not the car the the majority can afford. We live in a 24/7 economy and the most flexible jobs are low paying jobs, and those people need a car to get to work.They can’t think outside their bubble.
I worked in public transportation and the first requirement is having a car, else you just can’t go to work. And trust me, you can’t buy an EV with that paycheck.
If I can’t charge at home then I don’t want an EV. Here’s also some hypocrisy. Traffic jams are expressed in billions of economical losses. But what’s the difference if millions are stuck in traffic or millions losing hours on on charging stations? I rather have 1 hour traffic jam then sitting around doing nothing at a charging station.
Yesterday again a pointless conversation about a Chinese EV with a 1000 mile range. That’s not the problem, you just have to add more batteries which add more costs. The car he talked about starts at 80.000 euro. You can’t get through their thick head that most can’t afford a 80.000 car. And why would I buy such a car for buying groceries twice a week? I love my little 16k car, it’s fun to drive and gets the job done. Do you really think your Amazon worker packing your stuff can buy such a car? Or your underpaid healthcare worker who needs to be at 6 am at her job?
We used to have small 10k cars, now they cost 20k or more. Surprised that sales of used cars has gone up? Most people are not paying attention, but when ICE bans go through many will hit the wall of being left without transportation. It’s an evil way of thinking creating a world with only rich and poor, the haves and haves not.
The job losses in the EU are gearing up, not just in automobile sector. By 2035 we don’t need cars anymore as nobody will have a job left.
But, but, but, all we need to do is raise minimum wage yet again and that issue of not being able to afford an EV goes away!
Right?
Hmmm…. labor costs increases results in prices increases for goods and services.
So, wrong!
Clarification: Tarrifs protect the owners of unprofitable businesses. They do not protect consumers.
Consider the EV market. Tesla and BYD are in competition.
One has an advantage in technology, access to raw materials, cheaper labour and a larger domestic base to support ongoing R&D. The other cannot compete. And it looks like it will; never be able to catch up.
So the other (Tesla) seeks state support to level the playing field.
This is good for Elon Musk. But Americans are denied the chance to buy cheap cars. They are forced to waste money on over-priced inferior EVs or have no EVs.
Not a problem if you want no EVs. But if people do want an EV, why must they pay more for one than it is worth?
WOW… a CCP apostle !!
I do not thank the CCP for China having a huge population with lots of natural resources.
It’s just the way it is.
The natural advantages that the USA had over Europe at the start of the 20th century are now China’s over the USA.
Note, I have been on these pages pointing out that Taiwan needs support against China, even though the difference is purely in the leadership.
Mcourtney; Please remember as we speak of access to natural resources in the case of the USofA versus China, it is more that we (I live in Washington State) have the resources in the ground, accessible and relatively avaliable for exploitation. It is regulation and access bans that preclude the access to the resources that present as a disparity in raw material production. Try opening a mine in America and see how long that will take..if ever.
Regards
MCR
“Not a problem if you want no EVs. But if people do want an EV, why must they pay more for one than it is worth?”
because stupidity should not be rewarded?
You’ve stated before that you are a Communist so I would expect that you would come out with BS like this. BYD does not have an advantage in technology, they use slave labor and Tesla does not have the freedom to build and sell in China the way it would want to.
I’m not a communist and nor have I ever claimed to be. You must be confused.
However, I doubt I would like to work in a BYD factory. Their conditions are so bad they don’t allow trade union representation.
I will never buy an EV. Too many issue with the first and foremost being FIRE.
I would never buy a Chinese EV or associated battery never, ever. Why? Do you think Chinese quality control even exists?
That’s what they said about Japan too.
Musk clearly disagrees with you as he is seeking tariffs to defend his company, not trying to compete on quality.
Chinese certainly have QC. No point in bashing everything Chinese.
For example, they have fairly functional space program. Not possible without QC.
Sooner or later they will have full cycle semicon industry, the epitome of QC.
In making cheap EVs, they indeed make compromises increasing risk of fire.
But Tesla and other western produced EV brands are not immune to this risk.
I would not buy any EV for this reason alone either, of any kind.
You forgot to mention slave labor.
“Not a problem if you want no EVs.”
There you go!
If you want an American~made EV, you will be able to buy one because of the tariff.
When used properly tariffs are a bargaining tool.
Whoever wrote this article seems to be a little behind the conversation. Both Trump and Musk want an end to the mandates. They have both said this many times. Why do we have to put up with substandard writing by journalists whose opinions aren’t worth warm spit-water?
“They have both said this many times.”
In case you haven’t yet noticed, there is a vast difference between what politicians say and what they do.
Clearly so now with Trump new appointees.
Yeah . . . his idea, I guess, of “draining the swamp”?
I mean nominating Matt Gaetz to be US Attorney General??? . . . why a paralegal in a community self-help law office in a strip mall has better credentials for that position than Gaetz!
His nominees are causing the swamp to drain itself.
You are very wrong about Matt’s qualifications. You might want to recheck your sources. Then of course you must be used to being wrong.
I’m not a Gaetz fan but Jim Jordan said yesterday that Gaetz was the best cross~examiner in Congress.
As if Congressional hearings represent the spectrum of cases presented to the Department of Justice! 😜
Jordan’s comment also reflects badly (though perhaps accurately) on the ineptitude of Congress as a whole.
Really? How very little you know!
According to https://en.wikipedia.org/wiki/Matt_Gaetz :
“He graduated from Florida State University in 2003 with a Bachelor of Science in interdisciplinary sciences, and from the William & Mary Law School in 2007 with a Juris Doctor. Gaetz was admitted to the Florida Bar on February 6, 2008 . . . After graduating from law school, Gaetz worked at the law firm Keefe, Anchors & Gordon (now AnchorsGordon) in Fort Walton Beach. In October 2021, the Florida bar suspended Gaetz from practicing law due to unpaid fees. He was reinstated after the $265 fee was paid . . . In March 2010 . . . Gaetz ran in the special election to succeed Sansom in the 4th district . . . Gaetz won with 43 percent of the vote . . . In the special general election, Gaetz defeated Democratic nominee Jan Fernald with 66 percent of the vote.”
Notes:
— at the time Gaetz was employed by Keefe, Anchors & Gordon it was a nine-person law firm
— when a new person is hired at a law firm, especially one just out of law school with no pervious experience “practicing law”, he/she is typically assigned to do what amounts to clerking matters, especially assisting the senior partners in the firm and tantamount to being a paralegal for a time
Since Gaetz was only with the Keefe, Anchors & Gordon law firm from 2008 to early-2010, a period of less than 3 years, he really does not have credible experience in the actual practice of law, as opposed to the practice of being a politician with a law degree!
I challenge YOU to provide a single significant legal case—just one will suffice—that Gaetz argued in court before a judge or jury as the principal lawyer or one where he provided to a court noteworthy legal reasoning in an amicus brief.
Qualified to be US Attorney General? . . . in a pig’s eye!
I’m not too sure about the above article’s conclusions.
President-elect Trump has fallen in love with one of his biggest boi fans, Elon Musk, whose company Tesla stands to lose tens-of-$ millions in sales if EV car purchases are no longer eligible for Federal tax rebates.
Trump has declared Elon Musk to be “a new star”, “an amazing guy”, and a “super genius” (see https://www.youtube.com/watch?v=rotVYaylc9o ).
Watch for some special exemptions for EVs being manufactured by US corporations. This would be somewhat in line with the above article’s reference to Trump stating that he believes “there is a place for EVs in the U.S. auto mix”.
IMHO, reading the tea leaves, Trump will call for horrendous tariffs on imported EVs while allowing Federal subsidies to continue for domestic EV sales.
Trump favors, as do I, built in America. It creates jobs and avoids all sorts of international issues.
Trump favors, as do I, ending the spending of MY TAX DOLLARS on special interests. The highest purpose of government is to protect the citizens from the government. The Constitution was written to have that purpose in this country.
Trump favors, as do I, getting the country back to free market economy, rather than government command economy.. Free market is the only pure, true democracy. People vote with their dollars.
Trump favors, as do I, NOT banning EVs or ICEs or anything.
Musk, like Trump, is businessman, not a politician. Musk saw a market opportunity, calculated cost-risk-benefit and proceeded. It is that kind of business decision based on supply and demand that has made America great.
Would you consider Neocons/ warhawks a net benefit or a cost? A real businessman would pull back and use the excess recources on his main product. In Trump’s case that should be the US. But money (sorry bribery) talks.
Money for billionaires..
Who are these “Neocons” and warhawks?
Did you know that a majority of Americans support Ukraine and Israel? Is this who you are referring to?
Funny to see you use “Trump” and “The Constitution” in the same paragraph.
consumer choice, not government mandates, must drive the auto and truck marketplace
Exactly.
Well, they could just do what they did w the abortion issue: leave it to the states. If they want to hand out subsidies, let them.
Mandates are not the same as subsidies and tax credits and, as noted below, tax credits are not the same as subsidies. Trump can cancel a mandate without affecting subsidies or credits. However, cancelling the mandate and the subsidy whilst keeping the tax credit is probably the best course. To obtain the credit you must first have sufficient income to generate taxes to which the credit would apply. Anything which reduces the personal tax load is a good thing. Tax credits that promote consumption that promotes increased production which increases jobs is also a good thing.
Tax credit are subsidies.
While I oppose income tax in principle, if everybody has to pay it, not taking it from somebody is the same as giving this person money.
Low income folks who do not qualify for tax credits are not on the market for EVs anyway.
EVs aren’t the answer for anything.
Meanwhile in South Carolina Scout Motors is getting ready to build a pant to build (only) two new EV trucks.
As I’ve said earlier, the whole EV debacle has resulted when governments depended too much on politicians, bureaucrats, environmentalists and academics to decide what’s best for the consumer without conducting proper surveys and studies of what the consumers wanted and/or were willing to pay for.Then when governments started imposing mandates on how many EVs had to be produced and offered paltry subsidies on vehicles that still remained overpriced, potential buyers smelled a rat. The stench grew stronger when it was learned resale values were low and reliability levels were well-below their ICE counterparts. Throw in the shortage of charging stations, bad publicity from battery fires, and limited cruising ranges and potential buyers changed their EV purchase intentions pretty quickly. The reality is that the technology for EV is still too uncertain to make large-scale purchases likely and may need another half-century to show appreciable increases.