Trump’s Potential Rollback on EVs Risks US Falling Further Behind China

Key Takeaways

• Donald Trump’s transition team has reportedly recommended rolling back the Biden administration’s sweeping support for electric vehicles.
• The transition team’s recommendations correlate with the President-elect’s historically anti-environmental policies.
• China currently boasts the largest electric vehicle market in the world.

President-elect Donald Trump’s transition team has reportedly suggested significant changes to end support for electric vehicles (EV) in the U.S., according to a document viewed by Reuters .

The potential sweeping changes come as China speeds ahead of America in the EV sector and American car firms work on their battery-powered offerings.

An EV Rollback

According to a Reuters report, Trump’s transition team has recommended redirecting money currently being used for EV charging stations and subsidies to national defense priorities.

The transition team has also reportedly  called for a rollback on the Biden administration’s $7,500 consumer tax credit for EV purchases.

A lack of subsidies for cheaper EV sales will likely strongly impact the U.S. sector, which has already seen a slow adoption of battery-powered vehicles.

The transition team’s recommendations correlate with the President-elect’s historically anti-environmental policies.

Trump has been historically bullish on reducing renewable energy policies, and his subsequent term looks to be no different.

The potential changes to EV support come as many U.S. manufacturers have been moving to release electric options to consumers.

China Speeds Ahead

China currently boasts the largest EV market in the world, with millions of electric cars sold annually. In 2023, China had  60% of new electric car registrations.

In contrast, while the United States has seen growth in the EV sector, it has not matched China’s scale or pace.

Factors such as reliance on traditional automotive industries, slower infrastructure development, and higher costs for EVs have contributed to the disparity.

Policy support is a critical driver of the EV industry’s growth, influencing areas such as production incentives and consumer subsidies.

If this support is rolled back, the U.S. risks slowing the momentum of its domestic EV industry, making it harder for American manufacturers to compete globally.

Europe Still in Race

Meanwhile, the EU has committed to ambitious climate goals, including a complete ban on petrol car sales in 2035.

Legacy manufacturers in Europe have had to implement lofty climate goals to stay within this legislation. Sweden-based Volvo announced in September that it would not meet its plan to sell only EVs by 2030.

However, the carmaker has remained committed to making 90 to 100 percent of its vehicles fully electric or hybrid by the end of the decade.

Despite these lofty goals, the EU’s uncertain regulatory landscape has led to a slower adoption of EVs than China.

To combat China’s dominance, the EU raised duties on Chinese-made EVs to 48% in July.