The transition team behind President-elect Donald Trump has revealed that the incoming administration has plans to undo the outgoing administration’s EV policies. Trump has been extremely critical of electric cars and the billions of dollars the Biden administration has invested into EVs, green infrastructure, and clean energy as a whole.
During his second presidential campaign, Trump promised to rescind all unspent funds that had been dedicated to advance green energy goals. With the new administration just weeks away from taking over officially, Trump’s team states the controversial billionaire plans to cut off all support for electric cars and charging stations as well as impose tariffs on battery materials and electric vehicle components sourced from not just China but the entire globe.
Furthermore, the Trump transition team suggested rolling back greenhouse gas emission standards and blocking more stringent emission rules in California, home to the largest fleet of electric cars in the country. These actions would significantly undo the Biden administration’s well-laid plans to spur electric vehicle adoption and encourage the growth of an independent and domestic EV battery supply chain.
Some of the proposals set forth by the transition team suggest redirecting the funds pulled away from electric cars to national defense and boosting local production. News of the previously-unreported changes comes as America’s transition to electric cars stalls due to competition from China. Beijing has spent tens of billions of dollars subsidizing its electric vehicle segment and currently dominates the global supply chain for EV batteries.
Even though Trump reduced his anti-electric vehicle rhetoric after Tesla CEO Elon Musk endorsed his presidential bid, he is still hell-bent on undoing all the work the outgoing administration has done to strengthen America’s nascent electric vehicle sector. While the Biden administration sought to combine elevated domestic battery production and a departure from the Chinese supply chain with a speedy transition to electric cars, Trump’s policies will impose tariffs on all foreign battery materials to boost domestic production.
According to Reuters, the transition team recommends later negotiating exemptions for battery materials tariffs with allied nations. All the funds that are currently being spent to lower electric vehicle prices and build EV charging infrastructure will go to national defense-related issues such as weaning the U.S. off China’s battery supply chain, Reuters says.
The transition team is also looking to eliminate the federal $7,500 tax credit for EV purchases, a move that would make electric vehicle ownership more costly than it already is and wound America’s struggling EV industry even further. Even though Tesla will also suffer from the loss of government support, CEO and outspoken Trump supporter Elon Musk believes the loss of federal subsidies would hurt other automakers more than Tesla.
Foreign-based EV makers like VinFast Auto Ltd. (NASDAQ: VFS) will also be watching to see how the new U.S. administration’s policies will impact their access to this major auto market.
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