The Biden-Harris administration gave America’s electric vehicle industry a shot in the arm through landmark laws like the Inflation Reduction Act. Former President Donald Trump, meanwhile, hasn’t minced words about his disdain for battery-powered cars. And more than a few EV proponents fear that a second Trump administration would spell doom for this country’s burgeoning EV sector.
But there’s a big difference between fiery campaign rhetoric and reality. And the EV transition may be a lot harder to stall than Trump would like.
“Any Congressperson that has billions of dollars in investment in their district from this would be shooting themselves in the foot if they fought it,” said Ingrid Malmgren, senior policy director at the EV advocacy group Plug In America.
There are some policies Trump—who the polls show is currently in a dead heat with Vice President Kamala Harris—could throw out the window on day one, but many programs would be more challenging to trash. Not least because red states have witnessed an IRA-fueled manufacturing boom that would be politically counterproductive to stop.
Trump Can’t Unilaterally Repeal EV Tax Credits
Tax credits that incentivize Americans to buy clean cars have been around since the George W. Bush Administration. The IRA overhauled and expanded the program, introducing credits for used EVs. It implemented restrictions on which new cars can qualify in an effort to combat China’s dominance of EV supply chains and support domestic industry.
It also launched a commercial vehicle credit that, through something of a loophole, lifts those onerous manufacturing restrictions (as well as taxpayer income limits and vehicle price caps) for EVs that people lease instead of buy. This has sparked an EV leasing boom.
A full-blown repeal of the credits would require an act of Congress. However, it’s up to federal agencies to explain how they work and to create an infrastructure for claiming them. A Trump-controlled Treasury Department could rewrite the rules explaining the credits to make fewer vehicles and taxpayers qualify, policy and tax experts said.
“There is still a lot of work that the Treasury Department and the IRS do to make it possible for taxpayers to actually claim those credits in an efficient and predictable way,” said Martin Lockman, a fellow at Columbia University’s Sabin Center for Climate Change Law. “That is the area where a presidential administration could muddy the waters a little bit for taxpayers.”
But a president can’t simply ask their Treasury department to write rules that effectively erase a tax credit, and any new regulations would still have to reflect the intent of the legislation. That may not leave much wiggle room for interpretation.
“I don’t think there's an awful lot of gray area in these particular statutes,” said Matt Gardner, a senior fellow at the Institute for Taxation and Economic Policy. “And where there is a gray area, it isn't the sort of gray area that could meaningfully affect the usage of the credit.”
Rewriting finalized rules could take years and would require notice-and-comment periods. Some of the Biden administration’s more recent regulations could also be vulnerable to repeal via the Congressional Review Act, which gives lawmakers the power to overturn agency regulations. But any such attack by a Republican Congress would be vetoed by a potential President Harris.
Congress will also have a chance to revisit the tax code—including the IRA’s credits for EVs and battery manufacturing—when the Trump tax cuts passed in 2017 expire next year.
He Also Can’t Really Touch Funding For EV Charging
The Infrastructure Investment and Jobs Act set aside $5 billion to build out a national fast-charging network through the National Electric Vehicle Infrastructure program, or NEVI. The funding tackles one of the primary hurdles to widespread EV ownership, which is the lack of places to charge.
Nick Nigro, founder of the policy and research firm Atlas Public Policy, says there isn’t much a president or Congress can do to stop NEVI in its tracks. The money was appropriated in advance when the Infrastructure Investment and Jobs Act passed with bipartisan support in 2021, and it goes out to states annually on a predetermined schedule.
“So you can expect NEVI to go forward as it was designed through the next couple of years,” Nigro said. Three years into the five-year program, some $2.4 billion has already been distributed to states. And that funding is beginning to bear fruit in a meaningful way.
The $2.5 billion Charging and Fueling Infrastructure program may be more vulnerable, since those are discretionary grants, Nigro said.
Trump can’t technically withhold unspent IRA funds for projects he doesn’t like, legal experts say, but he could try to with the help of Congress.
But He Will Make His Own Car Emissions Rules
Trump is all but certain to take aim at the tailpipe emissions rules finalized this March by Biden’s Environmental Protection Agency. The regulations should push automakers to sell more hybrids, plug-in hybrids and EVs by ratcheting up emissions restrictions for vehicles from model years 2027 through 2032. This might be the “EV mandate” Trump references, but the regulations are technology-agnostic.
That’s within a president’s power, but it can’t happen overnight. During his first term, Trump directed his EPA to roll back Obama-era fuel economy rules—along with about 100 other environmental regulations—but it took most of his presidency. That kind of effort would likely happen again, and it would probably face legal challenges.
He may also try to revoke California’s ability to set its own, more stringent EV sales quotas, which is something he attempted in his first term. Then again, that would come with considerable legal challenges, and it may not matter much; many automakers have already committed long-term to meeting California’s emissions goals and they’re unlikely to walk those back as they seek to be competitive in other markets too.
What’s The Impact For EVs?
Industry experts and advocates say that while Trump can’t totally derail EV momentum in the U.S.—the industry will continue to grow over the long run—he may slow the rate of progress.
“It’s an incredibly exciting time,” said Aaron Viles, director of campaigns at Electrification Coalition, an EV advocacy group. “But not every factory has been built. Not every press release has become actualized. So the next administration could absolutely change that policy landscape that's been driving some of those investment decisions.”
Indeed, in a recent paper, Lockman and his colleagues said that any mucking around with IRA tax provisions could be “deeply damaging.” Massive battery and EV factory investments are riding on both EV purchase incentives and manufacturing tax credits, and companies want to be clear about what they’re getting into. And continued hyper-partisan rhetoric could dissuade people from actually buying EVs, which is the key to making this entire plan work.
However, the cost of inaction on the part of automakers is also higher than ever, said Corey Cantor, a senior EV analyst at BloombergNEF. EVs are gaining market share globally, no matter what U.S. policies have to say about it. So car companies should be motivated to stay competitive on the world stage, and especially with emerging Chinese firms like BYD.
“The pressure is just much greater” than during Trump’s first term, Cantor said. “You didn't have a million global EV sales until about 2017. And now we saw, last year, almost 14 million global EV sales.”
Would It Actually Happen?
There are some actions a potential President Trump 2.0 could and likely would pursue himself. And a majority-Republican Congress would give him even wider latitude to hack away at Biden-era policies. But what’s possible and what’s politically palatable aren’t always compatible.
At the end of the day, Republican lawmakers may hesitate to gut laws that are creating thousands of jobs across the South and Midwest. A growing realization that the EV industry is good for keeping America competitive globally—especially with China, an EV juggernaut—may help keep clean-vehicle policies intact. Many IRA policies are explicitly aimed at making the U.S. less reliant on Chinese EV components.
Of the $129 billion invested in clean energy projects since the IRA passed, more than $107 billion has gone to Republican districts, according to an analysis by E2, an environmental advocacy group. Of the 112,000 new jobs announced, some 78,000 are in Red areas, the group says.
“The more [the policies] are understood and appreciated by the members of Congress whose districts are benefiting, the more durable they will be,” said Viles. “This isn't just about helping people buy EVs. This is about making sure that America is actually manufacturing those EVs that people are buying.”
Opinions are already shifting. In August, 18 House Republicans sent a letter to Speaker Mike Johnson discouraging an attack on some IRA incentives. Senator Lindsey Graham of South Carolina, a major car manufacturing hub, voiced support for EVs during a hearing in July.
“Over the arc of time, there are going to be more electric vehicles, not less, in the United States. And over the arc of time there are going to be a lot of Chinese electric cars all over the world,” he said. “I’d like to compete in this space.”
The auto industry would likely lobby hard to keep various incentives rolling. Traditional players are still losing piles of cash on their EV investments, and their only hope of changing that is to build up to greater economies of scale. If they can’t do so quickly enough, they risk falling behind during the greatest technological transformation the auto industry has ever seen.
“In order for them to stay competitive, they have to continue on this trajectory,” Malmgren said. “Otherwise, they're going back to the Dark Ages.”
