FYI: The future of America’s electric vehicle industry remains resilient against potential regulatory changes, even with the looming possibility of a political shift favoring former President Trump.
The Biden-Harris administration has significantly bolstered the U.S. electric vehicle (EV) industry through transformative legislation such as the Inflation Reduction Act (IRA). In contrast, former President Donald Trump has made his opposition to EVs clear. Yet, despite the rhetoric, cooling the momentum of the EV sector may prove challenging.
EV Investments: A Difficult Reversal
Political rhetoric cannot easily dismantle the substantial investments flowing into America’s EV future. Ingrid Malmgren, senior policy director at Plug In America, remarked that congressional representatives would be undermining their districts’ economic gains by opposing these advancements.
President Biden’s initiatives have sparked an manufacturing renaissance, drawing billions into diverse regions, including Republican strongholds. A Trump return could see attempts to dismantle some EV supports, but various factors complicate such intentions.
Tax Credits: Beyond the Reach of Easy Repeal
The resilience of EV tax credits, an idea originating from the George W. Bush era, is evident. The IRA expanded these credits, extending them to used EVs and easing some leasing conditions, which has stimulated market growth. While repealing these credits outright would need congressional action, adjusting their application remains the purview of federal agencies. Although a Trump administration might seek to reinterpret the rules, experts like Martin Lockman from Columbia University argue that legislation offers limited flexibility for significant alterations.
Matters are complex, as rewriting the rules could take years and would require stringent procedural follow-through, including public comments. Any legislative attempts to overturn these measures would likely be met with a veto from a President Harris.
Charging Network and Infrastructure Resilience
The national fast-charging network supported by the Infrastructure Investment and Jobs Act enjoys bipartisan backing, with funds committed through the National Electric Vehicle Infrastructure (NEVI) program. As Nick Nigro from Atlas Public Policy indicates, this initiative’s enduring support is largely due to its upfront funding and preset distribution schedule.
While the $2.5 billion Charging and Fueling Infrastructure program may be more susceptible to policy shifts, the inherent bipartisan design and existing allocation secure NEVI’s position in national infrastructure development.
Emissions Controls: A Likely Target
The Trump administration would probably revisit the Environmental Protection Agency’s emissions regulations, which necessitate greater fuel efficiency from automakers through 2032. These rules, however, are generally neutral regarding technology and could ignite lengthy legal debates.
Efforts to revoke California’s authority to impose tougher emissions standards might face sweeping legal challenges. Considering the auto industry’s global commitments and the market’s trajectory, experts anticipate these regulations will remain influential, particularly as automakers aim to meet various international standards.
EV Growth: A Worldwide Phenomenon
Despite potential policy shifts, the trajectory of EV growth worldwide makes domestic policy a secondary concern. With annual global EV sales climbing to nearly 14 million, automakers are incentivized to maintain momentum, competing against international players like BYD. Failing to capitalize on this momentum could see U.S. manufacturers lagging behind in a major technological shift.
Political and Economic Realities
While a Trump-led government might retrace current policies, political dynamics complicate any drastic agenda. With substantial job creation in Republican districts post-IRA, overturning EV-friendly policies may not sit well with constituents. Recognizing the strategic advantage in reducing reliance on Chinese EV components could persuade lawmakers to preserve these policies, ensuring the U.S. remains pivotal on the global stage.
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Authored by William Kouch, Editor of Automotive.fyi.
