The electric vehicle (EV) market in the United States is facing a significant slowdown as President Donald Trump’s administration rewrites climate policy, potentially setting the country back in its transition away from gasoline-powered cars. This shift comes despite the steady growth of EV sales in the US over the past few years, with a record 11.7% share of new car sales in September, according to Cox Automotive. However, the future looks uncertain as Trump aims to eliminate the country’s emissions credit systems and federal fuel economy standards, which have been crucial in incentivizing EV adoption and production.
The $7,500 EV tax incentive, which ended in September, had been a significant driver of EV sales, with General Motors (GM) reporting a doubling of its EV sales to a quarterly record of 66,501. But with the incentive gone, GM has had to book a $1.6 billion charge to scale back EV production and terminate its electric van production in Canada. This move reflects a broader trend in the industry, as EV-related investments have tumbled by almost a third to $8.1 billion in the three months to September, according to the US Clean Investment Monitor.
Trump’s policies also risk putting the US far behind China, where EVs are expected to outsell gasoline cars on an annual basis for the first time this year. China’s lead in clean technologies is a significant geopolitical concern, as the US lags behind in this critical area. The US car industry, which excels in internal combustion engines, may face a complete obliteration if EV adoption continues to slow down.
The regulatory changes come at a time when the global automotive industry is already dealing with higher tariffs imposed by the Trump administration on imported cars. Carmakers are responding by boosting production of petrol and hybrid versions of higher-margin sport utility vehicles and pick-up trucks, while EV-related investments are being scaled back. This shift could create a healthier environment for companies to compete with good quality and more affordable battery-powered cars, according to some industry analysts.
However, others argue that the removal of regulatory pressure and EV credits in the US would create a healthier environment for companies to compete with good quality and more affordable battery-powered cars. Stephanie Brinley, principal automotive analyst at S&P Global Mobility, believes that the EV market needs to thrive without incentives in the long term. The future of the EV market in the US remains uncertain, as the industry adapts to the changing regulatory landscape and consumer preferences.