There have been a lot of exciting developments in the electric vehicle market recently. However, political shifts could impact the trajectory of EVs. After winning the 2024 election, many people are wondering how President Donald Trump’s skepticism of the green energy movement will influence the market. Some are worried that his policies and rhetoric may derail the EV boom altogether. Here’s what you need to know.
1. Ditching the EV Tax Credit
One of the major perks of buying an electric vehicle has been the kickbacks from the government. EV owners have been able to get a $7,500 tax credit when they buy an electric car. Donald Trump has already proposed getting rid of this subsidy. Surprisingly, his friend and now cabinet member Elon Musk is completely behind the idea. Although this tax credit has drawn more people into the EV market, Musk said that getting rid of it will only help his company, Tesla.
How, you might ask? Getting rid of the subsidies will actually force automakers to decrease the price of their EVs. Currently, Tesla is the only one profiting from the EV movement to begin with. So, when you remove other carmakers like GM and Ford from the mix, Tesla becomes the go-to for electric vehicles.
2. Slowing the Energy Transition
The Biden-Harris Administration has enacted the most consequential federal clean energy and climate policy in the history of the United States. The climate crisis was one of the administration’s top issues they wanted to address. Trump has essentially pledged to undo all of that, but his executive powers only really give him the ability to slow the energy transition.
3. ‘New Green Scam’ is Trump’s Stance on EVs
Trump hasn’t been quiet about what he thinks about the movement for green energy. He has called climate change a hoax and the efforts made by the Biden-Harris Administration a “green new scam.” The president-elect says that he wants to repeal the Inflation Reduction Act. This law allotted hundreds of billions of dollars of tax credits, grants, and other federal incentives for clean energy, EVs, and other technologies that impacted the climate in a positive way.
4. A Vow to Back ‘Big Oil’ From Day One
At rallies, Trump has been heard saying, “drill, baby, drill!” He has made it known that he wants to increase U.S. oil and gas production from day one. Andrew Reagan, executive director of Clean Energy for America, spoke about the potential impact during a recent webinar. “He has pledged to do the bidding for Big Oil on day one,” he said. “Oil and gas lobbyists are drafting executive orders for him to sign on day one.”
5. Donald Trump Can’t Do It On His Own
Like every other president in history, Donald Trump isn’t able to make good on these promises on his own. He’ll need the cooperation of the U.S. Congress and that’s not certain. Completely repealing the Inflation Reduction Act would be extremely disruptive to the clean energy sector. It could also put a lot of people out of work who have found positions in the clean energy industry. A recent survey of clean energy companies revealed that repealing the law would lead to half of these companies losing business or revenue. About 25% of the companies would lose projects or contracts as a result of the law being appealed and another 20% would have to lay people off. Ten percent could even face going out of business entirely.
The Future of Electric Vehicles Hangs in the Balance
While it seems like Donald Trump has his sights set on the clean energy movement from day one, the future of EVs and clean energy companies remains hanging in the balance. The EV boom represents a pivotal shift in the automotive industry, with many companies making huge steps toward sustainability. But where politics are concerned, the EV industry relies fairly heavily on government support. Ultimately, the question remains: Will the momentum of electric vehicles withstand potential political headwinds?