While it briefly appeared that a second Donald Trump presidency might help the U.S. electric vehicle (EV) industry through the promise of high tariffs affecting foreign competitors, the Republican candidate’s commitments to the oil industry and rhetoric hostile to the green transition have drastically changed the situation.
The most recent news that hints that electing Trump could bode ill for the EV industry is that the billionaire politician revealed he is open to cutting the $7,500 tax credit on the purchase of such vehicles.
Indeed, it has been no secret that the Republican candidate is likely to prove a bump in the road for electric car makers, though at least one analyst – Wedbush’s Dan Ives – believes not all will be equally affected.
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Not all American EV makers to suffer the same effects from a second Trump presidency
In early July, Ives made an X post concluding that, while the entire industry will likely face headwinds should Trump reenter the Oval Office, Elon Musk’s Tesla Motors (NASDAQ: TSLA) might benefit as its sheer size could enable it to increase its lead over the competition further.
Interestingly, Musk has himself endorsed Trump and was involved in a rumor mill in which he pledged to provide the Republican campaign with more than $40 million each month. More recently, Donald Trump announced he would be open to offering the South African-Canadian-American billionaire a cabinet position.
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Still, while Trump’s statements about digging for more oil, supporting more traditional car makers, and skepticism about climate change are almost guaranteed to slow the United States’ green transition, it remains uncertain whether they can truly damage the EV industry.
The situation in Norway may offer a glimpse of things to come in the U.S., as the country did, in fact, cut some of its generous EV incentives, leading to a decline in sales in early 2023.
On the other hand, the negative impact in the Nordic country proved short-lived, as sales recovered relatively quickly to the point that electric vehicles may soon overtake their petrol-powered counterparts in numbers in the near future.
On the other hand, for years, the Norwegian government has been running a significantly more extensive and expensive program to push electric vehicles than any other country in the world.
The protracted effort and investment have enabled the transition to EVs to gain significant momentum and have turned Norway into the leader in electric vehicle sales.
Ultimately, it is impossible to gauge just how great an impact the removal of EV tax credits might have in the U.S.
Though the precedent in Norway demonstrates the industry can thrive even with lesser incentives, the situation in America is significantly different for multiple social, political, and economic reasons, not the least of which being the fact that the green push has never been as extensive as in the Scandinavian country.
