The Trump team wants to overhaul auto industry policy

Source: Gasgoo

Reuters reported that a document showed that the team of the next president of the United States, Donald Trump, recommended sweeping changes that would cut off support for electric vehicles and charging stations and strengthen measures to block imports of cars, parts and battery materials from China.

 

At the same time, the documents show that the Trump team has proposed imposing tariffs on all battery materials globally to boost U.S. production, with negotiations to obtain a separate tariff exemption.

 

Trump vowed during the US presidential campaign to ease regulations on fossil fuel vehicles and eliminate the so-called “electric vehicle mandate”. The Trump team is calling for the elimination of a $7,500 tax credit that current U.S. President Joe Biden offered consumers for buying electric vehicles. The policy could deal a blow to U.S. electric vehicle sales and production at a time when many traditional automakers, such as General Motors and Hyundai Motor, have recently introduced a broader range of electric vehicle offerings to the U.S. market.

 

The Trump team’s cuts to subsidies for electric vehicles could also hurt sales of U.S. electric car giant Tesla. But Musk, Tesla’s chief executive, said competitors would be hurt more than Tesla by the loss of electric vehicle subsidies.

 

In addition, the Trump team called for recouping remaining funds from the Biden administration’s $7.5 billion plan to build charging stations and shifting the money to battery mineral processing and “U.S. defense supply chains and critical infrastructure.” Batteries, minerals and other electric vehicle components are critical for U.S. defense production, but electric vehicles and charging stations are not as important, the document said.

 

Karoline Leavitt, a spokeswoman for Trump’s campaign, also said the candidate would fulfill promises he made during his presidential campaign, including ending a crackdown on gasoline-powered cars.

 

Currently, in the U.S. market, some global automakers are aggressively transitioning to electric vehicles, in part to comply with the Biden administration’s stricter limits on tailpipe emissions. The Trump team has proposed rolling back the Biden administration’s carbon emissions and fuel economy standards to allow automakers to produce more gasoline-powered vehicles. The Trump team has proposed reverting carbon regulations to 2019 levels, which would increase carbon emissions per vehicle per mile by an average of about 25 percent over the carbon emissions mandated in 2025, and also reduce average fuel economy by about 15 percent.

 

In addition, the Trump team has proposed blocking the US state of California from enacting stricter vehicle emissions standards. California has applied for another waiver from the U.S. Environmental Protection Agency to implement a stricter set of rules starting in 2026 that would eventually require all vehicles to be electric, plug-in hybrid or hydrogen-powered by 2035. However, the Environmental Protection Agency has not yet approved California’s request.

Image Source: White House

The Trump team’s proposals also include tariffs on “electric vehicle supply chain” imports such as batteries, critical minerals and charging components; Waive environmental reviews and accelerate construction of “U.S. federally funded electric vehicle infrastructure projects,” including battery recycling and production, charging stations, and critical mineral manufacturing; Expanding export restrictions on electric vehicle battery technology to competing countries; Support the export of U.S.-made electric vehicle batteries through the Export-Import Bank of the United States; Using tariffs as a “negotiating tool” to open up overseas markets for U.S. auto exports, including electric vehicles; Removing the requirement for U.S. federal agencies to purchase electric vehicles, a current Biden administration policy requires that all cars and pickup trucks purchased by all U.S. federal agencies be zero-emission vehicles by the end of 2027.

 

Overall, the Trump team’s proposals differ sharply from the Biden administration’s policies. The Biden administration has sought to strike a balance between “promoting a homegrown battery supply chain to wean ourselves off China” and “a rapid transition to electric vehicles in the U.S. auto industry.” The Trump team, for its part, plans to divert money currently spent on building charging stations and producing affordable electric vehicles to U.S. defense priorities, including ensuring that batteries and key minerals needed to make them are not subject to Chinese supply chains.

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