President-elect Trump’s transition team is looking to implement sweeping changes that include allowing 25% more tailpipe emissions per vehicle mile and lowering fuel efficiency standards by 15 percent while gasoline prices remain high in the US. This could take standards back to 2019 levels. At the same time, the transition team’s proposal includes tariffs on the EV supply chain, including batteries, critical minerals, and charging components, reports Reuters. Not only would this hurt production, therefore sales, of all-electric vehicles like the F-150 Lightning in the US, but hybrids as well. And at a point when Americans are moving to them in droves due to the high cost of gas while oil companies gauge drivers for record profits.
Transition Team Says Trump Administration Will Have Space For EVs
“When he takes office, President Trump will support the auto industry, allowing space for both gas-powered cars and electric vehicles,” transition spokesperson Karoline Leavitt said in a recent statement. However, this all rings hollow when the transition team is seeking to redirect money for charging stations to battery-mineral processing for the “national defense supply chain and critical infrastructure.” Indeed, many of the proposals Reuters saw in documents are defense-related and recommend using the Section 232 tariffs that allow imports to be limited based on national security threats.
The aim is to encourage domestic battery production for defense-related interests, not for the auto industry and certainly not for military electric vehicles. If the proposals are enacted, it would end Department of Defense directives to acquire electric military vehicles and reverse the Biden administration’s requirement for federal agencies to purchase zero-emission vehicles.
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One of Trump’s campaign promises was to “stop government attacks on gas-powered cars.” As a result, removing support for EV charging stations is also in the document Reuters viewed, specifically targeting Biden’s $7.5 billion plan to build charging stations. With the emissions rollback and plan to place tariffs on the EV supply train and kill EV charging, the incoming administration’s plan appears to be in the interest of defense contractors and oil companies, not the auto industry and consumers. In fact, the timing couldn’t be worse for home-grown big three automakers. Ford, GM, and Stellantis have sunk large amounts of money into developing and manufacturing EVs. Sinking EVs will also sink chances of making that money back and turning the development into profit.
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EV Components Are Important, But “Charging Stations Are Not”
There is some lip service to the US auto industry with a plan to use tariffs as a “negotiating tool” to get US auto exports into foreign markets. However, and famously, Trump and his team appear to have a fundamental misunderstanding of how tariffs work, and the inevitability of another heavy-handed approach is higher prices on domestic cars and another trade war with China.
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According to the transition team’s document, batteries, minerals, and other EV components are “critical to defense production,” but electric vehicles “and charging stations are not.” As things stand, the current administration is working to get as much money for EV promotion out before Trump’s administration gets into office. Recently, the Loan Programs Office finalized a $1.25 billion loan for EVgo to support the installation of around 7,500 chargers, and the Department of Energy’s Loan Programs Office announced the Ford and SK joint venture, BlueOval SK, will get a loan of up to $9.63 billion to build three battery plants.
We certainly can’t rely on Tesla CEO Elon Musk, who has gone on record stating that getting rid of tax credits will hurt other automakers, not Tesla. These are the same tax credits that were part of a huge amount of the government assistance that helped Tesla become the leader in electric vehicles. It’s also worth noting that during Trump’s first term, Tesla sued the US government over tariffs.
Source:
Reuters
