What's in store for the auto industry once President Trump is in the driver's seat?
Many automakers hope the country will be able to change lanes. Under the Biden administration, current regulations require stricter fuel economy and emissions standards by 2030, making this an uncertain road ahead.
This year's election is expected to have more impact on the auto industry than any previous election.
Of course, these standards are intended to guide the industry towards electric vehicles. There's one problem. Consumer demand simply doesn't exist, at least not in the short term. Given that EVs cost significantly more to produce than conventional gasoline or hybrid models, governments are asking these companies to take significant financial risks.
Volkswagen Group and Stellantis are two major car companies that are already feeling the pain of overinvestment in EVs, as evidenced by recent cost-cutting measures.
change gears
It is expected that the Trump-Vance administration will move away from mandating electric vehicles, but it is unclear by how much. Given the level of resources that domestic and foreign automakers have already invested in EV production, and the multi-year timelines required for changes in product plans, significant reductions in EV incentives and sales remain costly to the industry. It turns out that it takes.
The uncertainty surrounding political change has long been one of the most difficult aspects of running a successful automotive company. This year's election is expected to have more impact on the auto industry than any previous election.
impossible road
The disconnect between current electric vehicle regulations and actual consumer demand is forcing traditional automakers into an impossible path. They have invested billions of dollars into rapid EV development, even as sales have slowed and cars have piled up on dealer lots.
We expect the Trump administration to carefully evaluate and ultimately replace the existing MPG mandate (de facto EV mandate) with policies that better recognize market realities.
While this is a boon for traditional automakers, it could mean further slowing in EV sales growth and a tougher road ahead for electric vehicle brands like Lucid, Rivian, and Tesla.
Will Trump's new best friend Elon Musk say anything about it? Presumably, Tesla's market power and tariff exemption as a US-made car will allow it to continue to prosper. Musk is nothing if not resourceful.
cab cut
If President Trump takes office in January, he could quickly roll back these onerous emissions standards by executive order.
Several questions remain: How long will it be before automaker CEOs formally ask President Trump to repeal the EV mandate? Can we finally abolish the California Air Resources Board?
California has long had significant power to drive national EV policy. Not only does the state lead the nation in EV adoption, California also created a zero-emissions vehicle program that requires new cars to reach 100% zero-emissions and clean plug-in hybrid electric status by the 2035 model year. Responsible. year.
So far, 16 other states have adopted ZEV programs. The average number of EVs per 10,000 residents in these states is more than double that of non-ZEV states.
But President Trump's advisers are already planning to revisit Clean Air Act exemptions that allow California to enforce its own stricter pollution standards and restrict the types of cars Americans can drive. The Golden State's dominance may be weakened.
We will keep an eye on all new rules and regulations and keep you updated.
