A second Trump presidency could derail the EV industry. Here’s how

In August, after getting an endorsement from Elon Musk, Donald Trump said that he supported a “very small slice” of cars being electric, saying that he had “no choice” because of Musk’s endorsement. But that came after months of EV bashing. Last Christmas, Trump told EV supporters to “ROT IN HELL.” He has called Biden’s EV policies “lunacy.” He’s pledged to reverse Biden’s EV “mandate”—though there isn’t an actual mandate—on his first day as president. (In a meeting with oil industry executives in May, he reportedly said that he could get rid of Biden’s pro-EV policy if they donated $1 billion to his campaign.) He wants to slash the Inflation Reduction Act, the largest climate bill ever passed, calling it a “green new scam.” He has previously called climate change a hoax. Electric vehicles are near a tipping point. Global EV sales hit a record high in the second quarter of this year. In China, gas and diesel vehicle sales are dropping quickly enough that they could be obsolete by 2028. In the U.S., a record 1.2 million EVs were sold last year, and they’re on track to break a new record this year, making up as much as 10% of new car sales. By some estimates, EVs could be cheaper than gas cars as soon as next year; others say price parity could happen around 2028. Auto industry executives say electric cars are the future, even though some companies are adjusting the speed of their transition. If Trump is elected, it’s not yet clear how much he’ll actually do to the EV industry; he failed to accomplish other campaign promises, from building a wall to repealing Obamacare. But it’s likely that under a Trump presidency, the EV transition would slow down. Ditching the $7,500 EV tax credit Trump has said that he wants to end the tax credit for EVs, which offers up to $7,500 for qualifying new electric vehicles and up to $4,000 for a used EV. That tax credit “absolutely” matters to the growth of the market, says Ben Prochazka, executive director of the Electrification Coalition, since EVs are still more expensive than gas cars at this point. “We’re in the early stage of the technology transition,” Prochazka says. “Even though EVs have been around for a while, from the standpoint of going from early adopter to mass adoption, we’re still in that messy middle ground. This is about market acceleration in these early stages when we have to jump the chasm.” The clean vehicle tax credits are part of the Inflation Reduction Act, so Trump can’t end them by himself—he’d need to convince Congress to repeal parts of the law. But he could easily change Treasury regulations so that fewer cars qualify for them. For example, right now, cars made with parts from China don’t qualify, but there’s an exception for graphite, since the supply chain for that material is just beginning in the U.S., and almost all of it comes from China now. Trump could cancel that exception, so EVs that qualify for the credit now could no longer use it. “He actually could pretty severely restrict the effectiveness of the clean vehicle tax credit unilaterally by directing the Treasury Department to revise or issue new guidance on its implementation,” says Stephanie Searle, chief program officer at the nonprofit International Council on Clean Transportation. Still, Searle argues that Trump might not do it, despite what he’s claimed in rallies. “From Trump’s first term, we saw that generally he doesn’t really mind spending government money,” she says. “It’s regulating industry that he doesn’t like to do.” There’s a clear case for keeping the consumer tax credit. “Companies have to invest in the United States or in [allies] to be able to take advantage of that tax credit,” says Aaron Viles, senior director of campaigns at the Electrification Coalition. “That’s a game changer in terms of ensuring that EV manufacturing, from batteries and minerals, to the actual battery construction, to the final vehicle assembly, that’s all happening here in the United States of America.” Uncertainty about the future of the tax credit may be having an impact on the auto industry now. While EV sales are growing, car companies had hoped for faster growth, and have been pivoting some of their plans because of softer consumer demand; politics is likely also a contributing factor. “We’re already seeing hedging,” says Steven Cohen, director of Columbia University’s masters program in sustainability management. “Companies like Ford and GM have already delayed plans for production of vehicles and pushed back new models to some extent. I think a significant part of that is the risk of these demand incentives being withdrawn. They’re pushing back plans beyond November to see what happens.” Repealing the biggest climate bill in history Beyond the EV tax credits for consumers, the Inflation Reduction Act includes multiple other incentives for EVs (along with a very long list of other actions to help decarbonize the economy). Trump has claimed he