The Trump transition team has fleshed out its plan to slash electric vehicle incentives and funding, which would result in a significant slowdown of the US EV market.
The US EV market is already lagging way behind the rest of the world at roughly 9% of new cars, which is less than half the rate of China and most European markets.
And yet, during the elections, Trump has vowed to slow down electric vehicles in the US by slashing the incentives put in place to compensate for the impact on the environment that their fossil fuel-powered alternatives have.
Trump said that he would kill the $7,500 federal tax credit for electric vehicles and cut funding for electric vehicle production and charging stations. He also vowed to kill the non-existent “Joe Biden EV mandate.“
Reuters has been obtaining documents from the Trump transition team and releasing reports based on them. They have now obtained some about their plans for electric vehicles.
Trump reportedly is now looking to cut the tax credit, the federal funding for the charging stations, and move it to secure battery materials:
Incoming U.S. President Donald Trump’s transition team is recommending sweeping changes to cut off support for electric vehicles and charging stations and to strengthen measures blocking cars, components and battery materials from China, according to a document seen by Reuters.
A lot of the $7.5 billion funds for charging stations has already been allocated, and it could prove difficult to divert it to other projects.
The documents make the battery materials a “national-defense issue”:
Taken together, the recommendations are a stark departure from Biden administration policy, which sought to balance encouraging a domestic battery supply chain, separate from China, with a rapid EV transition. The transition-team plan would redirect money now flowing to building charging stations and making EVs affordable into national-defense priorities, including securing China-free supplies of batteries and the critical minerals to build them.
The Trump transition team also plans to put tariffs on parts and battery materials in all countries and then negotiate exemptions with allies.
Electrek’s Take
This will undoubtedly result in a slowdown in EV sales in the US and let the market fall even further behind the rest of the world.
I guess the small silver lining is that some of the money that was going to charging stations would go to battery materials instead, but I think US battery material projects would benefit more from a strong domestic EV market than from whatever Trump can divert from the charging station fund.
Top comment by Leonard Bates
Fred's comment at the end hits the nail on the head. Fossil fuels are deeply subsidized in ways that no one sees and really throws the game to ICE vehicles. If the true cost of fossil fuels was somehow brought to the market, no one would need subsidies on EVs.
While I was traveling in Europe last month, a Swedish auto journalist interviewed me about the impact Trump could have on the US EV market, and his questions allowed me to explain my views in detail.
If that sort of thing interests you, I’d recommend watching:
At the end, I do explain that I would agree with removing the EV incentives as long as it means that we properly represent the cost of fossil fuel-powered vehicles.
But that’s not what is happening. In fact, the incoming vice president even suggested adding a $7,500 incentive on gas-powered vehicles.
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