Donald Trump’s potential return to the White House could spell the end of electric vehicle (EV) tax credits and usher in a new era of energy policy, with Tesla CEO Elon Musk potentially joining his cabinet.
At a Glance
- Trump plans to end EV tax credits and halt Biden’s $1.6 trillion climate agenda
- Elon Musk endorses Trump, despite potential impact on EV industry
- Trump softens stance on EVs but remains opposed to Biden’s initiatives
- Republicans argue Biden’s EV policies benefit China and limit consumer choice
- Musk believes ending EV subsidies could benefit Tesla long-term
Trump’s Evolving Stance on Electric Vehicles
Former President Donald Trump has recently moderated his rhetoric on electric vehicles following an endorsement from Tesla CEO Elon Musk. Despite this shift, the EV industry remains skeptical about Trump’s intentions, anticipating continued opposition to President Joe Biden’s electric vehicle initiatives.
“I have to be, you know, because Elon endorsed me very strongly,” Trump said. “That doesn’t mean everybody should have an electric car, but these are minor details, but your product is incredible,” Trump said.
Trump’s potential policies could significantly impact Biden’s $1.6 trillion climate, energy, and infrastructure agenda. Republicans argue that Biden’s EV policies limit consumer choice and benefit China, and they are likely to target the federal consumer tax credit for EVs.
The Impact on the EV Industry
The Environmental Protection Agency estimates that under strict emissions standards, 68% of new cars or light trucks sold in 2032 will be electric. However, Trump is expected to continue opposing Biden’s regulatory efforts to reduce greenhouse gas emissions through stricter tailpipe rules.
Interestingly, Elon Musk has indicated he would be fine with Trump removing EV subsidies, which would impact Tesla’s competitors more than Tesla itself. Musk believes the removal of the $7,500 tax credit for electric vehicles would have a minor impact on Tesla but could be devastating for its competitors.
Musk’s Perspective and Potential Cabinet Position
Musk’s endorsement of Trump marks a significant political shift for the Tesla CEO. Despite Trump’s vow to end Biden’s EV policies, which could initially seem detrimental to Tesla, Musk argues that eliminating EV subsidies will ultimately benefit his company.
“ROT IN HELL,” Trump told a rally in Atlanta this month that he’s for “a very small slice” of cars being electric.
Musk’s companies could benefit from a favorable tax and regulatory environment under a Trump presidency. This alignment of interests has led to speculation about Musk potentially joining Trump’s cabinet, bringing his business expertise to government affairs.
The Future of EV Policies and Industry Growth
Trump has stated he would halt new spending under President Joe Biden’s Inflation Reduction Act (IRA), which has significantly boosted EV sales and industry growth. The IRA has led to $124.7 billion invested in clean energy projects since its enactment, with EVs accounting for $77.6 billion of the total investment.
Elon Musk says Trump ending EV tax credits would be 'devastating' for rivals — but not Tesla https://t.co/N0ZXrdn37a
— Quartz (@qz) July 24, 2024
The Treasury Department reported that EV buyers have saved $600 million since January, with an average saving of $6,900 per consumer. However, these gains could be at risk under a potential Trump administration.
Implications for Tesla and the Broader EV Market
While the removal of EV subsidies could initially seem detrimental to Tesla, Musk believes it could benefit the company in the long run. Tesla’s planned factory in Mexico is currently on hold due to Trump’s proposed tariffs on cars made in Mexico, with Musk stating that the political situation needs to be monitored before proceeding with the factory plans.
As the 2024 election approaches, the future of EV policies and the broader clean energy agenda hangs in the balance. The potential alliance between Trump and Musk could reshape the landscape of the EV industry and American energy policy for years to come.
Sources:
1. Never mind Trump’s new rhetoric — he’s still gunning for EVs
2. Elon Musk says Trump ending EV tax credits would be ‘devastating’ for rivals — but not Tesla
