American president Donald Trump has reversed his predecessor’s climate policies, including those that supported the EV rollout.
Upon his inauguration yesterday (20 January), Trump signed a host of executive orders to remove “burdensome and ideologically motivated” regulation and “unleash” American energy.
Under the order, Trump has made good on his campaign promise to “eliminate” the previous president’s “EV mandate”, despite the fact such a mandate never existed. In 2021, then-president Joe Biden passed an executive order that aimed to make half of all new vehicles sold in 2030 electric. While the order introduced a target, it was not legally binding.
Trump will also slash policy awarding federal tax credits for the purchase of a new or used EV and pause “the disbursement of funds appropriated through” the Inflation Reduction Act (IRA) or the Infrastructure Investment and Jobs Act “including but not limited to funds for electric vehicle charging stations made available through the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program”.
The executive order promises to “promote consumer choice” by removing barriers to motor vehicle access and terminating state emissions waivers that limit sales of gasoline-powered vehicles. In his first term, Trump loosened tailpipe emissions standards that had been set during the Obama presidency, but manufacturers are less welcoming of the backstep this time around.
Biden’s so-called mandate had won backing from Ford, GM, and Stellantis. Ahead of the inauguration, the car makers expressed that, having invested billions in the transition, they feared changes under Trump would harm the industry.
Manufacturers including Toyota, Stellantis and Ford have pushed for current regulations in the US to be maintained.
The Tesla effect
In August, Trump himself admitted he had “no choice” but to support EVs after receiving endorsement and funding from Elon Musk, the owner of technology firm Tesla.
Under previous rules, manufacturers that failed to meet emissions standards could buy credits from those that exceeded requirements; some argue that selling credits is what kept Tesla afloat during a period when other manufacturers struggled in the US.
Although Trump has yet to impose any sanctions on the battery supply chain, opening the car market to competition will surely be a blow to Musk’s business. However, Tesla stocks have remained up since the November election and investors still think the Trump presidency will benefit the EV maker.
One factor in this is the fact that, although Trump’s order will remove the White House’s federal standards, California has been setting its own vehicle emissions standards (the Advanced Clean Cars standards) that were already more stringent.
Under section 177 of the US Clean Air Act, other states can choose to follow California’s standards; known as the section 177 States, 17 American states including New York, Delaware and Pennsylvania, have opted to adhere to some or all elements of the Californian standard.
The only potential for Trump’s changes to the Environmental Protection Agency (EPA) rules to touch California (a major market for Tesla) would be if he attempted to eliminate the federal waiver allowing the state to pre-empt EPA.