2024 Chevrolet Silverado EV. (Chevrolet)

Elizabeth Balzani

As Donald J. Trump prepares to come into office, questions linger about the future of renewable energy, especially electric vehicles. What will happen to the EV tax credit? Will Trump keep the same regulations in place that drove the EV market forward under Biden? Many major car companies, such as Ford, General Motors, and Stellantis, do not want Trump to discard current federal regulations that incentivize car manufacturers to sell electric vehicles (EV).

In March 2024, the EPA passed national pollution standards that were designed to strictly limit the amount of tailpipe emission pollution created by cars and other vehicles that have model years of 2027 through 2032. These regulations were set so that roughly two-thirds of vehicles could be zero emission by 2032. In response, car companies have had to increase their sale of electric vehicles to meet pollution standard requirements.

From human health and planetary health perspectives, these pollution standards have many benefits. It is estimated that these standards will prevent seven billion tons of carbon dioxide from being emitted into the atmosphere. This will result in better air quality. Due to this improved air quality, an estimated $13 billion will be saved on public health. An addition $62 billion is estimated to be saved as fuel costs go down.

As car companies have increased EV sales, consumers have been incentivized to purchase electric cars. As things are now, consumers who buy or lease an EV are eligible for a federal tax credit of up to $7,500.

Unfortunately, national pollution standards and tax incentives for electric vehicles are precisely the things Trump wants to push against. Trump has historically pushed back against the EV industry. For example, in 2017 when Trump first took office, he revoked California’s 1970 Clean Air Act waiver. This revocation meant that California was no longer allowed to set its own rules for tailpipe emission restrictions.

California governor Gavin Newsom anticipates that Trump will do similar actions in his upcoming term. As a result, California has secured a deal with Stellantis, one of the largest car manufacturers in the world. Stellantis has agreed to follow California’s state tailpipe emission standards, no matter what the federal courts rule in terms of acceptable emissions limits. Other car makers, such as Ford and Honda, have also agreed to follow California’s lead.

Ford Mustang Mach E. (Ford Motor Company)

There is more hope for the future of EVs as well. Car companies want stability. They have invested billions of dollars into electric vehicles, and thus want to continue making them. Since carmakers start manufacturing their cars years in advance, car companies like Ford and General Motors have already started designing and making cars for the next several years according to the new pollution standards announced in 2024. A constant flux in EV legislation makes it impossible for car manufacturers to successfully design, make, and sell new models.

Additionally, the EV industry has not only provided jobs to the American people, it has also offered the U.S. a competitive stage against China. To completely scrap the EV industry would mean losing this competitive edge as well as a lot of money. So, although the manufacturing and sale of EVs in the U.S. may decrease, it will not cease entirely.

What will happen to the cost of EVs under the upcoming Trump administration? Unfortunately, the cost is likely to increase, for several reasons. For one, Trump plans to impose tariffs on materials that are imported to make EVs, such as batteries.

The current $7,500 tax credit may be abolished under Trump as well, which will de-incentivize people to buy EVs, and make it much harder for people to be able to afford buying or leasing an EV. However, since the tax credits are declared law by Congress, they will not immediately disappear; they may get phased out, or they may remain. If they remain, there is a possibility that Trump could convince the Treasury Department to make it much more difficult for people to qualify for a tax credit. For instance, loopholes stating that tax credits are more easily accessible through leasing an EV than buying one, are expected to be abolished.

Under the Biden Administration, a total of $7.5 billion was allocated to improve and expand upon EV charging stations across the U.S. ($5 billion was given to the states and $2.5 billion was designated grant money). Trump and his team plan to take back much of this money, which could potentially reduce EV growth.

On the positive side, many EV manufacturing plants are in states that Trump carried in the election. Ohio, Tennessee, and Georgia are among a few states with such EV infrastructure. There is the possibility that Trump may want to support the tax revenue and jobs that these plants provide. One final piece of optimism is that many of Trump’s anti-EV policies are not yet definite. There is still time to lobby for EVs and persuade the Trump administration not to do away with EV standards.