To a large extent, the electric vehicle market in the United States is based on Democratic policies. There are federal tax credits for car buyers. Subsidies for battery production. Cheap loans to build electric car factories. Grants for chargers. Regulations that push automakers to sell more zero-emission vehicles.
All that support — running into the hundreds of billions of dollars — could quickly disappear after the inauguration of President-elect Donald J. Trump, despite his close relationship with Elon Musk, the chief executive of electric car maker Tesla.
Mr. Trump and Republicans in Congress say they plan to eliminate most federal aid for electric cars and trucks and change emissions rules, raising doubts about the future of such vehicles and the billions of dollars automakers have invested in them. their design and construction.
Still, many auto experts say market forces and technological progress will eventually drive a long-term transition to electric vehicles, no matter how far Republicans go in undoing President Biden’s climate agenda.
The prices of batteries, the most expensive part of an electric vehicle, are falling rapidly. Now, many electric cars cost no more than comparable gasoline models when savings on fuel and maintenance are taken into account.
Technology is improving rapidly. Batteries are becoming lighter and smaller allowing for faster charging and longer travel distances. And more than 12,000 public high-voltage chargers were added in the United States in 2024, a 33 percent increase from a year earlier, according to Rho Motion, a research firm.
Automakers have a strong financial interest in promoting electric vehicles, regardless of who is in the White House. They must earn a return on the investment they have made in the production facilities. And failure to keep up with the technology could leave them vulnerable to emerging Chinese competitors who are all-in on electric vehicles.
“No matter what policy changes are brought in by the new administration, we will adhere to them and adjust accordingly,” Randy Parker, Hyundai Motor America’s chief executive, told reporters on a conference call last week. passed.
“Make no mistake about it,” he added, “we are committed to electrification.”
Hyundai recently began production of its popular Ioniq 5 car at a new $7.6 billion plant near Savannah, Ga. This car and a large electric sports utility vehicle are the first from the South Korean manufacturer to qualify for a $7,500 federal tax credit. The factory complex, which will employ 8,500 people, including Hyundai suppliers, once it reaches capacity, is one of the biggest examples of the jobs and investment that electric vehicles have generated.
There’s no doubt that sales of battery-powered cars, which generally cost more than comparable gasoline-powered cars, will take a hit if Republicans repeal the Inflation Reduction Act, the legislation that includes the $7,500 credit and subsidies for battery manufacturing. charger and electrical installation. school buses.
Representative Mike Johnson, a Republican from Louisiana, a major oil and gas producer, repeated the threat after winning re-election as House speaker this month. “We’re going to save our automakers’ jobs, and we’re going to do it by ending the ridiculous EV mandates,” he said.
Analysts note that sales of electric vehicles in Germany fell 27 percent last year after the country’s government cut incentives for car buyers.
“If incentives go away, that will definitely affect sales,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive.
On average, an electric car in the United States sold for $55,105 in 2024, compared to $48,165 for a gasoline car, according to Cox.
But the price gap is half of what it was two years ago. Several more affordable models are coming this year, and many analysts expect electric vehicles to cost the same or less than combustion engine cars by the end of the decade.
General Motors sells an electric Chevrolet Equinox for about $35,000 and plans to revive the Chevrolet Bolt this year at a lower price. Later this year, Honda will begin manufacturing electric cars in Ohio. The Japanese company has not announced a price but is known for affordable vehicles.
Tesla has said it will start selling a cheaper vehicle by the middle of the year, but has given few details. Later this year, Volvo plans to start selling a version of its EX30 that is expected to cost less than $37,000.
“We will be able to reduce the cost of electric vehicles lower than internal combustion engine vehicles,” said Kurt Kelty, a GM vice president in charge of batteries. “That’s what we’re aiming for.”
Many states, including Colorado, New York and Washington, offer subsidies for electric vehicles that will remain in place. California Gov. Gavin Newsom has said the state will revive its incentives if the federal tax credits are repealed.
In China, sales of electric vehicles rose as prices fell to the same level as gasoline cars or even lower, foreshadowing what could eventually happen in the United States. Half of all new cars sold in China are electric or plug-in hybrids, compared with about 10 percent in the United States.
When price was no longer an obstacle, Chinese car buyers focused on the advantages of electric vehicles, including software features that would be difficult to install in gasoline cars, said Hagen Heubach, who heads the unit of automotive business of SAP, a German software company. “A market can flip very quickly,” he said.
Chinese automakers’ success and global expansion are also putting pressure on American and European automakers to keep up with technology development or risk being overtaken.
BYD, based in Shenzhen, China, produced 4.3 million electric and plug-in hybrid vehicles last year, joining the big leagues of the global auto industry. BYD does not produce any vehicles that run only on fossil fuels.
Most drivers believe that electric cars will eventually dominate, although they disagree on when that will happen. Sales of electric vehicles rose 8 percent last year in the United States, while sales of cars that run only on fossil fuels fell 2 percent, according to Cox.
Sales of plug-in hybrids, which can travel 40 miles or more on battery power before a gasoline engine kicks in, rose 19 percent. This suggests that many consumers are interested in driving electric even if they are not ready to give up gasoline.
Only a small number of cars qualify for the federal buyer tax credit at any one time. The Inflation Reduction Act limited eligibility for the tax credit to vehicles that have a certain percentage of components manufactured either in the United States or its trading allies. The requirements become more stringent each year, forcing some vehicles to drop from the list. As of January 1, some models, including the Volkswagen ID.4 and Ford Mustang Mach-E, are no longer eligible.
Republicans are also expected to target a provision that allows leasing companies to collect the $7,500 credit on all battery cars, regardless of where they were made. Leasing companies usually pass the savings on to customers.
Eliminating the credits would reduce sales of electric cars by more than 300,000 vehicles a year, the equivalent of about three months of sales in 2024, according to a study published in October by Stanford University professors; University of Chicago; University of California, Berkeley; and Duke University.
But the researchers also noted that many buyers would have bought electric cars even without the incentives. It seems that some drivers are willing to pay more because battery cars have quick and smooth acceleration; can be charged at home at a lower cost than filling up at a gas station; and do not need oil changes and other routine maintenance.
Of course, many car buyers may be reluctant to buy one for years.
Nearly half of Americans surveyed recently by consulting firm Deloitte were concerned that electric cars can’t travel far enough between seats. However, most people rarely travel more than 60 miles from home, according to the survey, and most electric models can easily travel 200 to 300 miles without stopping.
It’s not known that Republicans will repeal any Democratic EV policies, because many have supported new plants in states like Tennessee, Kentucky and South Carolina. Republicans would kill jobs in their strongholds.
Mr. Trump’s inner circle includes Mr. Musk, whose electric car company, Tesla, accounts for almost half of the electric vehicles sold in the United States and benefits from the loans. Mr. Musk has supported the repeal of electric car subsidies, but it is not clear how he will use his influence once Mr. Trump becomes president. Tesla did not respond to a request for comment.
Mr. Trump’s campaign promises included “stopping gas car attacks,” Karoline Leavitt, a spokeswoman for the president-elect’s transition, said in an email. She suggested he would take a more balanced approach. “President Trump will support the auto industry,” she said, “allowing room for both gas cars and electric vehicles.”
However, proponents of electric vehicles worry about the disruption that is likely to come. Albert Gore III, executive director of the Zero Emissions Transportation Association and son of the former Democratic vice president, said slower sales could reduce efforts to develop sources of lithium and other battery materials in the United States. China currently dominates that supply chain.
Mining companies have been “able to raise money in the capital markets and invest in US manufacturing capacity based on solid demand commitments from US automakers,” Mr Gore said. “That would be the most pronounced impact.”
Even a modest slowdown in electric vehicle sales could seriously hurt efforts to cut greenhouse gas emissions from burning fossil fuels, environmentalists said.
“We’re probably not moving fast enough right now,” said John Boesel, president of Calstart, a nonprofit group backed by businesses and governments that promotes clean transportation. “So any attempt to delay or slow things down will have a negative impact for decades, if not centuries, to come.”
