Trump’s comeback may be the end of EVs

Donald Trump’s return to the Presidency is likely to reshape the US automotive industry, from trade protections and slowdowns to regulatory rollbacks.

The United States automotive industry is about to get a major shake-up under the second Presidency of Donald Trump.

Known for his “America First” approach, Trump’s second term is expected to deliver a patriotic trade stance, looser environmental regulations and a slow down of the electric vehicle transition.

Tesla CEO Elon Musk jumps on stage as he joins former US President and Republican presidential candidate Donald Trump during a campaign rally. Photo: Jim WATSON / AFP

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Global Data vice president of automotive research Jeff Schuster said he anticipates Trump’s “protectionist” stance will likely bring higher tariffs, specifically for vehicles made in China.

“Tariffs are a significant concern for the industry that could lead to higher vehicle prices for consumers and potentially limit choices,” he said.

This could also impact imports from Mexico and Canada which would ultimately raise prices for consumers and limit choice.

BYD electric cars waiting to be loaded on a ship in China. Photo: AFP/China OUT

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Scuster warns a rise in tariffs could create a tit-for-tat war.

“Retaliation is likely, which could negatively affect US exports,” he said.

The trade war could hurt US automotive exports and prompt a gradual shift in vehicle sourcing.

Scuster said retooling supply chains will take time but automakers may become reliant on international parts and labour if import duties are raised.

“We will need to wait and see if widespread tariffs are merely a negotiation tactic or a genuine plan,” he said.

Clearly, one of the most immediate impacts of Trump’s policies will be the slowdown of the EV market.

Trump has been vocal about his stance on EVs in stark contrast to President Biden, who made major strides in EV adoption with tax incentives and expanded infrastructure.

If Trump focuses on reducing oil and fuel prices and rolling back emission standards, Schuster forecasts a 15-20 per cent decrease in EV market share by 2030.

Tesla would benefit from restrictions on EVs from China. Picture: Thomas Wielecki

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“We anticipate that the transition to electric vehicles in the US will be hindered under Trump’s administration,” he said.

The decrease will also be dependent on whether Trump cuts EV incentives, such as the EV leading tax credit under the Inflation Reduction Act, and reduced federal support for charging infrastructure.

Trump’s policy will also likely favour traditional combustion engines (ICE) and incentives for US-based production of EVs and batteries.

It’s likely Trump will also rollback federal emissions and fuel economy standards.

Trump scaled back several Obama-era regulations during his first term, and it seems his administration will take a similar approach.

Schuster expects a repeal of California’s EPA waiver for Advanced Clean Cars laws.

“This could make it easier for vehicle manufacturers to operate in the US, but given the substantial investments already made, would create a different set of challenges,”

Some EV programs may be delayed or cancelled until there is clarity on potential policy changes.

This will impact manufacturers who have already invested heavily in EV development.