The recent decision by the Trump administration to repeal the 2009 “endangerment finding” has sent shockwaves through the automotive industry and the climate change movement. This action, which classified carbon dioxide as a threat to public health and provided the legal basis for regulating greenhouse gas emissions, has effectively removed all emissions standards for cars and trucks in the United States. The impact of this decision is far-reaching, with implications for both the electric vehicle (EV) market and traditional gas-powered automotive industry.
This move is just the latest in a series of anti-EV and anti-climate policies enacted by the Trump administration since taking office. In addition to repealing the “endangerment finding,” the administration also rolled back a $7,500 federal tax credit for electric vehicles last September. As a result, the EV sector, both domestically and internationally, has been facing significant challenges and losses. EV makers are reporting enormous losses and cutting programs as a result of these policy changes.
Major automakers, such as Ford and Stellantis, have been forced to make drastic changes in response to the shifting policy landscape. Ford recently announced a $19.5 billion writedown and the cancellation of its electric F-150 pick-up truck, while Stellantis had to scrap several fully electric models and revive its 5.7-liter engine for the US market, resulting in a $26 billion hit. The Trump administration has touted these policy changes as a boon for traditional automakers, estimating an average cost savings of over $2,400 per vehicle.
The contraction in the EV market is not solely due to policy changes but also reflects broader issues within the sector. Automakers have struggled to meet consumer demand for affordable EV models and have failed to develop adequate charging infrastructure. This has led to an overestimation of EV demand and a disconnect between industry hype and consumer reality.
Despite the challenges facing the EV market in the United States, electric cars are not dead in the water. While European automakers are feeling the loss of the US market, there is still strong demand for EVs in other parts of the world. In the European Union, sales of fully electric vehicles surpassed those of gas-only vehicles for the first time in December. Emerging markets, such as Southeast Asia, India, Mexico, and Brazil, are also showing strong growth in EV sales.
Supportive policy environments will be crucial in shaping the future of the global EV market. As emerging markets drive a global EV boom, the choices made now on charging infrastructure and early support will determine the pace of this momentum. Despite the setbacks in the United States, the future of electric vehicles remains bright on a global scale.
