Will President-elect Donald Trump kill the electric vehicle market? Reuters reported on November 14 that Trump and his transition team are planning to put the kibosh on the Inflation Reduction Act’s $7,500 consumer tax credit for EV purchases. The newswire, citing two sources close to the situation, says this effort to eliminate the government subsidy will be part of a broader tax reform initiative. As the EV market continues to struggle – aside from Elon Musk’s Tesla Motors, of course – is it time to deliver the industry’s last rites?
Who Killed the Electric Vehicle?
Over the past year, there have been indicators that the electric vehicle market might be struggling despite the billions of dollars in federal and state subsidies. It comes down to one fact: Consumer demand is not there. At least, that is what one of the biggest car brands in the world is saying.
Speaking at a virtual media roundtable event on November 8, Jack Hollis, the chief operating officer of Toyota Motor North America, stated that the government’s electric vehicle mandates are “impossible” to meet. He referenced California’s “Advanced Clean Cars II” regulations, which force 35% of 2026 model-year automobiles to be zero-emission vehicles. The California Air Resources Board suggests that 12 states and Washington, DC, have implemented such rules. Other states have similar regulations but with a 2027 starting date.
And, yes, one glance at the calendar suggests these cars will be rolled out quite soon.
“I have not seen a forecast by anyone … government or private, anywhere that has told us that that number is achievable. At this point, it looks impossible,” Hollis said. “Demand isn’t there. It’s going to limit a customer’s choice of the vehicles they want.”
The Japanese motor industry titan recently announced it is delaying US electric vehicle production plans because of slowing sales. As Liberty Nation News reported, Toyota is not the only automaker to cite waning EV demand. Ford confirmed it lost $1 billion in its EV business in the third quarter. The company also confirmed this past summer that it is overhauling its EV strategy in response to “pricing and margin compression.” Volvo, meanwhile, waved goodbye in September to its objective of producing only fully electric cars by 2030.
Trump, Elon Musk, and Republicans
For months, it had been widely speculated that the incoming administration would take a chainsaw to the Inflation Reduction Act and the plethora of Biden-era environmental policies and regulations. In the aftermath of Trump’s stunning victory, a long list of clean-energy stocks tanked on this widespread expectation.
The president-elect has expressed mixed views on electric vehicles, though he quipped that he would have to like them because Musk endorsed him. That said, market watchers have operated on the premise that Trump would favor fossil fuels, a justified view after the 45th and soon-to-be 47th president told a Detroit audience in October that “we will frack, frack, frack, and drill, baby, drill.”
Despite the myriad challenges gripping the EV industry, ending the tax credit may be the death knell, and Musk is embracing this idea. While he admitted that removing the subsidy would slightly impact Tesla sales, it would be more of a crushing blow to his company’s competitors like General Motors.
But perhaps Republicans will be the obstacle to the Trump agenda. House Speaker Mike Johnson recently said in an interview with CNBC that it would be impossible to “blow up” President Biden’s signature climate change bill. “You’ve got to use a scalpel and not a sledgehammer, because there’s a few provisions in there that have helped overall,” Johnson told the business news network in September.
In addition, more than a dozen GOP lawmakers in the lower chamber urged the party brass to preserve many provisions in the bill, including energy tax credits. The 18 Republicans wrote in an August letter to Johnson:
“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.”
Sigh, Shock, Gasp
No one seems all that interested in electric vehicles produced by the older auto legends like GM and Ford. They want a Tesla – and only a Tesla. When consumers cannot purchase this brand, they will search for new-generation vehicle alternatives – like hybrids – or return to the good old-fashioned gasoline-powered automobile. And, as Liberty Nation News has reported, this is what many are currently doing. Trump might put the final nail in the EV coffin, but it was already dying slowly.
