What Happens To America's EV Boom If Trump Wins?

Trump has labeled Biden’s climate policies as the “Green New Scam.” Here's how it may impact EVs.

The next few days aren’t just about America’s future, but the future of the planet.

As the world’s biggest historical polluter, the U.S. is approaching a critical juncture with clean energy. Electric vehicle sales are at the forefront of this transition and they could continue growing or risk getting strangled, depending on who sits in the White House next. The Biden Administration's policies made major strides to push electric vehicle sales at home, giving auto manufacturers the tools to make them here. Vice President Kamala Harris is expected to continue or possibly expand those policies; her opponent, former President Donald Trump, has vowed to target them as soon as he's in office.

So if Trump does get there, what will happen to America's burgeoning EV sector on Jan. 20, 2025? There’s no clear answer yet, but a full repeal of the Inflation Reduction Act—which has supercharged funding for clean energy projects, including EV manufacturing—seems unlikely.

However, several reports suggest that Trump's plans might abruptly halt the ongoing investments in EV factories. He may even find a way to freeze the $7,500 federal tax credit for buyers, which could drive up prices and hamstring adoption rates.

What’s At Stake?

Believe it or not, but Americans are driving home battery-powered cars in droves thanks to an influx of new affordable models, federal and state tax credits and generous lease and financing offers, supported by a burgeoning charging network that’s now adding 1,000 new plugs every week.

The third quarter saw record EV sales, with automakers selling 346,309 EVs between July and September. And yet, to the chagrin of many industry experts, EVs have been the political punching bag this election season. Trump and much of the Republican Party have vilified electric cars for years. Trump threatened to repeal the Inflation Reduction Act, which he called the “Green New Scam” during a speech at the Economic Club of New York in September.

He previously falsely stated that EVs “don’t go far” and “cost a fortune,” both untrue as EVs continue to reach range and cost parity with their gas-powered counterparts. During a rally in Ohio, he claimed EVs would cause a “bloodbath” in the auto industry, referring to job losses in the sector. He only warmed up to EVs after Tesla CEO Elon Musk started donating millions of dollars to a pro-Trump Super PAC. Aside from EVs, Trump is a bonafide climate-denier. When he visited Georgia last month after the state got battered by Hurricane Helene, he called climate change “one of the greatest scams of all time.” Scientists say climate change is contributing to more intense and severe hurricanes.

On the other hand, the Biden administration passed the landmark Inflation Reduction Act (IRA) in 2022, supercharging clean energy projects and accelerating local production of electric cars by awarding billions of dollars in federal loans and grants to automakers. The IRA also allows car companies to offer EVs with tax credits of up to $7,500, provided the cars and their batteries are made in North America.

Since the law was passed, $154 billion in clean energy investments have been announced, of which $87 billion represents factories currently operating or under construction, The New York Times said, citing data from Atlas Public Policy. Ironically oil production also reached record levels under the Biden administration and Harris has no plans to ban fracking.

As businesses and Republican-leaning Southern states have warmed up to the IRA and how it is boosting local economies with thousands of clean energy jobs, Trump’s war against the “Green New Scam” may not pan out as he wishes.

Why Overturning The IRA Won’t Be Easy

Regardless of how he gobbles media oxygen to gerrymander his voters, EV investments driven by the IRA reached record highs this year. The lion's share of those have gone to Southern states, many of which are red or at least purple.

In Georgia alone, some 28 clean energy projects and $15 billion of investments are expected to create almost 16,000 jobs, according to Bloomberg. This includes the $8 billion Hyundai Metaplant, where the 2025 Ioniq 5 and other new models will be manufactured. It is expected to create some 8,500 new jobs. North Carolina is expected to receive $19 billion for 22 green energy projects.

In August, 18 House Republicanssigned a letterthat urged Speaker Mike Johnson not to gut the IRA incentives. Here’s what they said:

Prematurely repealing energy tax credits, particularly those which were used to justify investments that already broke ground, would undermine private investments and stop development that is already ongoing. A full repeal would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.

Automakers may continue to benefit from the grants they have already received, but the future may look uncertain. "We will rescind all unspent funds under the misnamed Inflation Reduction Act," Trump said in September.

For this exact reason, the Biden administration has been fast-tracking these grants ahead of the election, getting them “out the door” as quickly as possible, according to Axios. This makes it difficult for a future Trump administration to rescind the funds. About 80% of the funding ($92.5 billion) available through the fiscal year ending in September has already been awarded.

Moreover, the outlet points out that refusing to spend the funds that Congress has already appropriated would be illegal. Terminating spending would also involve lengthy court battles, which could hamper the pace of the current infrastructure build-out.

However, it's encouraging that the CEOs of some of America's largest automakers are all in on EVs. Ford CEO Jim Farley posted on LinkedIn a letter titled “Confessions from a Lifelong Petrol Head. I love electric vehicles, and it has nothing to do with politics.” GM CEO Mary Barra said in an interview with CBS Sunday Morning that she was surprised that a propulsion system would be politicized.

It’s hard to imagine that Ford and GM, both of which are set to receive billions of dollars in tax breaks this decade, won’t lobby hard to ensure that the IRA incentives continue flowing in. And it's crucial to remember this goes well beyond the Big Three: BMW, Volvo, Scout Motors, Toyota, Honda, VinFast and Mercedes-Benz are just some of the automakers looking to expand their domestic EV manufacturing and/or battery operations just to take advantage of purchasing credits alone. Surely, they'll have something to say about all this. (Curiously, Tesla CEO Elon Musk says he supports the removal of subsidies. He posted on X saying that it would only help Tesla, even though Tesla earns hundreds of millions of dollars in carbon credits, which would hurt its profits.)

All said, the climate benefits of these investments are enormous. The U.S. Environmental Protection Agency projects that the policies will help reduce carbon emissions by 35-40% by the end of the decade.

But Trump’s plans could reverse the progress. According to climate analysis websiteCarbonBrief, his plans could add another four billion tonnes of carbon emissions to the atmosphere by 2030, equivalent to putting another billion gas-powered cars on the road.

What Trump and much of his party seem to miss is that EVs aren’t a partisan tug-of-war that's meant to be won. It's about saving the planet, jobs, energy independence and having a stake in a battery-powered future that goes well beyond cars. But EVs are a key starting point there, and China has surged ahead, leaving the U.S. still very behind the curve.

It's not too late to fix that. But if we spend the next four years moving backward, the U.S. auto industry and our planet may never recover.

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