EV Growth Expected to Slow Further Under Trump
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Slowing electric-vehicle adoption is likely to accelerate even further as President-elect Donald Trump delivers on his promise to gut plug-in friendly policies he called the “green new scam.”
Automotive forecaster GlobalData on Nov. 6 cut its outlook for EV market share in the U.S. for 2030 to 28% from 33% due to Trump’s election.
“The transition to electric vehicles in the U.S. will be hindered under Trump’s administration,” Jeff Schuster, GlobalData’s vice president of automotive research, said in a note. Trump’s focus on lowering oil prices and weakening tailpipe emissions standards could reduce electric vehicle market share by 15% to 20%, he said.
Automakers have poured billions of dollars into battery and EV plants in a push to field more electric models that will increasingly be required under U.S. rules governing vehicle efficiency and tailpipe emissions. Now, some $129 billion worth of EV investment in North America through 2027 is “at risk,” Mark Wakefield, co-head of the automotive practice at consultant AlixPartners, said in an interview. The $7,500 tax credit consumers can receive for buying a North American-built EV could also be in jeopardy.
Automotive is one of the sectors that could see a significant mid-term impact from the new Trump presidency.
GlobalData's latest Analyst Briefing provides an initial assessment of the implications for the Automotive industry.
Read more: https://t.co/cmnhif3Pcj pic.twitter.com/ZHH4pWcgHm — GlobalData Automotive (@automotive_GD) November 7, 2024
“What the EV market will look five years out is definitely less, much less,” Wakefield said. “The amount of vehicles you want out of your factories and your industrialization for EVs is less and less for longer.”
Automakers will continue to slow spending on EVs and delay or cancel new battery-powered models, Wakefield said. They have been making those moves in advance of the election and likely would have reversed them had Vice President Kamala Harris prevailed in the presidential race, he said.
Carmakers will also look for ways to increase production of profitable gasoline-fueled vehicles, while converting EV plants into facilities that can also build gas-electric hybrids, as Volkswagen AG’s new Scout lineup is doing at its $2 billion EV factory under construction in South Carolina.
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“From a profitability perspective it’s a challenge because you’ve got a lot of industrial plants with assumed volumes for EVs that are less” now, Wakefield said. “So some of those plants might turn into hybrid plants doing both, rather than pure EV.”
Trump will face difficulties rolling back President Joe Biden’s Inflation Reduction Act legislation that spurred a building boom of EV and battery factories, many in Republican-leaning states. Bigger changes are likely in store for fuel economy regulations, Wakefield said. Trump softened those rules during his first administration and has promised to end what he calls “EV mandates” on the first day of his second term, though changing such policies involves a lengthy process that can take months or years.
“It’s less about what happens this year,” Wakefield said. “That doesn’t really hit you until 2027.”
