New York (AFP) – As part of his flurry of first-day actions, US President Donald Trump took aim at electric vehicles, a cornerstone of the Biden administration’s climate change agenda. Trump’s executive order on “Unleashing American Energy” on Monday included steps to ensure a “level” playing field for gasoline-powered motors and halt federal funding to build new EV charging stations. The executive order also appeared to presage other reversals, referencing the possible elimination of a federal tax credit for EV purchases and the renouncement of a US waiver that allows California to set stricter requirements on cars.
During his inaugural address, Trump said the moves would “end” the “Green New Deal,” ridiculing Biden-backed incentives for EV sales. While Trump harshly criticized EVs during the presidential campaign, policy experts have been skeptical Trump will junk all the Biden-era EV programs, in part because significant federal funding has gone toward projects in Republican congressional districts, where thousands of jobs are expected to be created. Shares of EV makers like Rivian and EV charging companies such as EVgo fell sharply Tuesday. Tesla, which is led by close Trump ally Elon Musk, also fell.
Kathy Harris, director for clean vehicles of the Natural Resources Defense Council, called Trump’s policy a sop for “fat-cat oil executives,” noting that EVs are better for the environment and can save consumers money on gasoline. Many of Trump’s executive orders are expected to face legal challenges, a possible outcome for the EV measures. “This is not the end of this story,” Harris said. “If the administration tries to cut corners or ignore the law, they will end up in court.” The Alliance for Automotive Innovation, which has previously endorsed the need for stable auto rules, reiterated its criticism of California’s car regulations in a statement that did not address other elements in Trump’s executive order. “The country should have a single, national standard to reduce carbon in transportation,” said the group’s president, John Bozzella. “We can’t have regulations that push the industry too far ahead of the customer.”
The new policy comes as automakers pause some EV investments due to slowing growth, even as sales of emission-free vehicles climb to new levels in the United States. In 2024, EV sales in the country reached 1.3 million, up 7.3 percent from the prior year, according to Cox Automotive’s Kelley Blue Book, which pointed to a meaningful rise in EVs at different price levels. But GM, Ford and other automakers have scaled back some EV investments in recent months, pointing to slowing demand growth. A Ford executive warned in November that a glut of EVs across showrooms will lead to “incredible pressure” on prices in 2025.
The broadside against EVs followed Trump’s targeting of the vehicles during the presidential campaign, when he claimed Democrat Kamala Harris wanted to force EVs on consumers. Harris said that she favored consumer choice. The Biden administration’s fuel economy rules required automakers to market fleets with sharply lower carbon dioxide emissions in a bid to address climate change, while laws such as the $400 billion Inflation Reduction Act of 2022 included a slew of lending and tax credit programs to boost EVs. Programs under the IRA and the 2021 infrastructure law are in various stages of implementation.
Monday’s executive order directs officials implementing the IRA to undertake a 90-day review to ensure that spending does not unfairly favor EVs “by rendering other types of vehicles unaffordable.” Policy experts see no meaningful chance that the new administration will try to claw back US funds that have already been spent. But whether Trump will seek to block other projects that are still moving through the pipeline is less clear. Nearly half of the $5 billion set aside for new EV chargers has been allocated to states under the infrastructure law, according to a memo from NRDC. The 2021 infrastructure law’s “embedded safeguards…should ensure continuity for infrastructure investments,” the NRDC said. “Of course, the incoming administration could try drastic measures, but those will face real-world and legal hurdles.”
In November, the Energy Department advanced projects to provide Rivian a $6.6 billion federal loan to build an EV manufacturing facility in Stanton Springs North, Georgia, and a $7.5 billion loan to StarPlus Energy to finance lithium-ion battery cell manufacturing plants in Kokomo, Indiana, under a Stellantis-Samsung joint venture. Construction on the Georgia plant is expected to begin in 2026, according to Rivian. Neither Rivian nor Stellantis responded to AFP queries on the implications of the new Trump policy for their projects.
© 2024 AFP
