Trump ordered a review of federal EV subsidies and state emissions waivers.
EV-related stocks fell following the announcement, with Tesla declining 4%.
Federal funding for EV charging infrastructure faces potential suspension.
The Canadian Government’s recent decision to cut EV incentives will severely harm EV adoption in the country. What’s happening south of the border may prove fatal unless some states can keep their waivers, which seems unlikely.
According to a new energy-focused executive order, U.S. President Donald Trump has instructed his administration to review and potentially eliminate subsidies and policies that support electric vehicles (EVs). The directive aims to remove what the administration calls “ill-conceived government-imposed market distortions,” which it argues effectively mandate EV adoption.
The order targets state-level regulations, calling for the termination of waivers that permit states to impose limits on gasoline-powered vehicle sales. California’s zero-emission vehicle mandate, which requires automakers to increase deliveries of emission-free models until 2035, is a specific target of the policy shift. However, the directive stops short of explicitly mandating revisions to federal vehicle emissions or fuel economy standards.
Trump’s order also directs federal agencies to pause the distribution of EV-related funds from two key Biden administration laws: the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. The latter allocated $7.5 billion to expand the national EV charging network.
Following the announcement, the shares of major EV manufacturers fell, with Tesla’s stock price declining 4%, Rivian’s down 7.6%, and Lucid Group’s down 8.5%. Charging station companies, including EVgo and Blink Charging, also saw their stock prices decline.
While full repeal of federal EV tax credits, such as the $7,500 incentive, would require an act of Congress, Trump holds the authority to modify eligibility criteria and impose additional restrictions. Any regulatory changes implemented under the executive order could take months to finalize and may face legal challenges.
Ultimately, the uncertainty alone surrounding EV mandates and incentives in Canada and the US will set back adoption rates. With little doubt, it will force automakers to continue to scale back their full-BEV offerings, instead opting for more hybrids.
Source: Bloomberg
