How the 2024 election stands to impact the US EV transition

Much of the Biden administration’s climate policy centered on driving decarbonization of transportation by incentivizing electrification.

With a second Trump presidency looming, there’s uncertainty about how, exactly, the president-elect’s promises of sweeping change will affect the transition to zero-emissions vehicles. But experts say Republicans’ sweep in the latest US election is likely to bring seismic change. Trump, after all, made anti-EV rhetoric a cornerstone of his campaign.

Here are ways the next Trump administration and its allies in a Republican-controlled Congress stand to reshape EV policies.

IRA incentives: Trump has vowed to repeal the Inflation Reduction Act, which dedicated hundreds of billions of dollars to the clean-energy transition, or to rescind unallocated IRA funds.

Experts say that a full repeal is unlikely, in part because the majority of the investments spurred by the legislation have flowed to GOP congressional districts. Clean-energy sector leaders have warned that a rollback would lead to widespread layoffs and business closures, and even a group of Republican legislators has argued against repealing the law.

“There’s this tension between, do you want to ‘own the libs’ and get rid of their signature piece of legislation, or do you want to represent your constituents’ economic interests?” MIT Sloan economist Catherine Wolfram, former deputy assistant secretary for climate and energy economics in the Biden administration, wrote.

“The political theory behind the IRA was that a lot of the investment would go into red congressional districts and red states, and that that would give it some permanence,” Wolfram told us. “We’ll see whether that political theory bears out.”

However, there’s widespread consensus that Trump and his allies in Congress will move to rescind provisions of the IRA—namely tax credits that offer consumers up to $7,500 on an EV purchase. Such a change could make EVs less affordable and further slow adoption.

“These policies will not likely change overnight,” Jessica Caldwell, Edmunds’ head of insights, said in a statement via PR rep Talia James-Armand, “but consumers who were planning on taking advantage of EV tax credits and reduced costs might consider moving up their purchase a bit sooner.”

Wild card: One uncertain factor is Tesla CEO Elon Musk, a Trump backer who’s playing a significant role in his transition back to the White House. Tesla’s stock soared after the election even as other EV stocks fell.

Trump’s return could be a boon for Tesla, which is far enough ahead on electrification that changes to the tax credits could wind up primarily hurting its competitors.

“It’s going to basically knock out the competition,” David Shepheard, a partner at global consultant Baringa, told us. “They’re the only company that can make EVs profitably right now. So, it just puts them in an even stronger position.”

“Tesla has the scale and scope that is unmatched in the EV industry,” Wedbush Securities analysts wrote, “and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment.”

Lower standards: There are likely to be changes to the EPA’s fuel economy and tailpipe emissions standards under Trump.

Under Biden, the EPA established stricter tailpipe emissions standards for model years 2027–2032 that would have seen EVs make up as much as 56% of new light-duty vehicle sales.

Many states follow more stringent standards set by the California Air Resources Board. But it’s possible that Republicans will try to get rid of the waiver that enables California to create its own greenhouse gas emissions standards.

Essentially, experts expect regulatory changes that will deprioritize electrification. S&P estimates that BEV market share would reach 29% by 2030 under Trump, lower than the Biden administration’s 50% goal.

“The pivot to EVs, it’s not dead,” Shepheard said. “It’s going to [slow] down, and it’s going to be adopted more state-by-state.”