We are just hours into Donald Trump’s second presidency, but there has already been a profound impact on the automotive industry that began before the oath of office was administered. Comments made during the campaign and the transition signaled significant departures from previous policies, particularly relative to electric vehicles.
A November 2024 Reuters article pointed to plans to kill the Biden Administration’s electric vehicle tax credit early in Trump’s term. While this action is likely to have a deleterious medium-term effect on the future state of EVs in the United States, it has sparked a run on them in the short term as consumers rush to buy before the subsidy is eliminated.
Consider the trend in (non-Tesla/Rivian) EVs moved per day over the last six months. After hitting a recent low of 1,612 in October, this metric jumped immediately after the election and has remained 32% higher in December and January month-to-date.
Of the top 20 (non-Tesla/Rivian) EVs on the market, 15 have seen turn rate improvements since the election, with more than half of those experiencing double-digit gains. 
But there is a bit of a black cloud behind this current EV silver lining, even for those who have moved up their purchases.
Trump’s energy and climate transition team was led by Harold Hamm, an oil executive with expected leanings toward gas-powered vehicles. In addition to the looming elimination of federal tax credits for EV purchases, other policy shifts are being reported on. These include “clawing back whatever funds remain from Biden’s $7.5 billion plan to build charging stations”, rolling back emissions standards to enable OEMs to build more ICE vehicles, and—in Secretary of Transportation candidate Sean Duffy’s confirmation hearings—the suggestion to charge EV owners fees to fund road repairs since they do not pay gas taxes that are earmarked for such purposes. These shifts will no doubt slow progress in the EV sector, both in terms of OEM emphasis and investment, as well as on the demand side.
But while they will push out the timing of industry transitions, the long arc of innovation and transformation is expected to continue. The Union of Concerned Scientists posted a recent piece, which noted a variety of ongoing dynamics that will continue regardless of who is in the White House.
“Car companies need to build cars that sell in a world that is going EV and need to be ready for a post-Trump marketplace here in the US. While it might work in the short-term for US domestic automakers to slow down on EVs, that would put those companies at a tremendous disadvantage as Asian and European carmakers expand their EV offerings and drive down production costs.”
- Union of Concerned Scientists
OEMs will need to navigate these choppy waters, which will require balancing the short-term regulatory picture with the longer-term need to stay competitive and environmentally responsible. Industry leaders appear to be in wait-and-see mode until it is determined how much policy realities will match pre-election and transition rhetoric. After being a vocal advocate for General Motors leadership in the EV space over the past several years, CEO Mary Barra has de-emphasized this issue in her public comments since the election. And Ford CEO Jim Farley has signaled that company investments in the EV space will be dependent on decisions that are made in the coming months and years. Tesla, meanwhile, will continue to exert its leadership even as others have to pursue a more complicated calculus.
However the next chapter of this book plays out, it is a given that there will be new characters, settings, and plot twists that will make for an interesting story.
More to come…
