Trump revokes Biden order, but that doesn't mean EVs die

President Donald Trump pledged to revoke the so-called electric vehicle mandate, and an executive order on day one of his second presidential term signals his intent to undo much of his predecessor's legacy when it comes to electric vehicle promotion.

But it's unclear how sweeping the impact will be or whether it will ultimately kill the $7,500 EV tax credit for buyers. Trump's "Unleashing American Energy" order that references consideration of "the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs" appears to include language to eliminate the credit, for instance.

But policies promoting EV sales are also harder to root out of tax code and Clean Air Act regulations than the executive order might imply, and questions about the president's ability to undo EV-related legislation suggest legal battles ahead.

Sean Tucker, writing for Kelley Blue Book, noted that some orders could be subject to court challenges, or they essentially acknowledge that the president can't change laws and instead direct officials to conduct reviews.

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"If there’s one lesson to take from a deep read of the executive orders, it’s that all of these changes will take time and some may be blocked," Tucker wrote. "Agencies will likely change some of the policies Trump has instructed them to change. But that is a slow process with several steps, and those agencies can’t even begin that process yet without leaders in place."

The EV market and automaker plans have also changed in the years since Joe Biden’s August 2021 executive order on “Strengthening American Leadership in Clean Cars and Trucks,” which Trump revoked Monday. That nonbinding Biden directive set "a goal that 50% of all new passenger cars and light trucks sold in 2030 be zero-emission vehicles."

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Automakers get reprieve on EV adoption

EV sales have continued to grow but not at the rates planned for earlier, and automakers have responded to that shift.

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Still, the change in tone from one administration to the next is stark, with Trump's orders appearing to target EVs, money for EV charging stations and emissions rules spearheaded by California.

Erik Gordon, a professor at the University of Michigan’s Ross School of Business who follows the auto industry, said Biden’s 2021 order was a signal of EV aspirations while Trump’s revocation is a signal of EV realities.

“Car companies with ICE models have already adjusted to a more realistic timing for EV adoption. They got a reprieve from customers. Now they have one from the government,” Gordon said, referencing an abbreviation for the internal combustion engine. “In a market economy, you can’t sell what people won’t buy, even if the government says you have to.”

Karl Brauer, executive analyst with iSeeCars.com, echoed that.

“Trump made his plans for the electric car mandate clear when campaigning, and his decisive win has given him the confidence to move forward with revoking it. He feels it’s threatening the health of the U.S. auto industry, which, combined with his long-standing preference for a free market approach versus government mandates, makes this an easy decision for him,” Brauer said.

A variety of General Motors EV’s line up to take people around a track during the 2025 Detroit Auto Show at Huntington Place in Detroit on Friday, Jan.10, 2025.
A variety of General Motors EV’s line up to take people around a track during the 2025 Detroit Auto Show at Huntington Place in Detroit on Friday, Jan.10, 2025.

Stephanie Brinley, an associate director at S&P Global Mobility, said Trump's actions so far haven't been a surprise.

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“Rescinding the soft target that President Biden put in place codifies a change in the focus of President Trump’s administration overall. Whether the U.S. met the 50% EV target by 2030 was less important than the direction that the statement set," Brinley said. "Easing the regulations for emissions and fuel economy will be the next step, and it will give the industry the ability to make better investment decisions in the near term as well. At the end of the day, however, consumers will determine the pace of EV adoption; easing regulations takes one pressure off of the industry to meet those targets, but it will be consumer demand that ultimately sets the pace.”

Change in direction will 'hurt the industry and lead to job losses'

Some industry watchers, however, warn that a significant shift on EVs could ultimately hurt automakers.

Sam Abuelsamid, vice president of market research at Telemetry Insights, said scaling back EV production and sales could prove harmful to the industry overall, saying that U.S. automakers aren’t in a position to back out of billions already invested in the shift to electrification.

“They can’t entirely pivot back on a dime,” he said. “We’re going to see a lot of product programs get delayed as they try to shift gears again and that is going to hurt the industry and lead to job losses. If these plants are not being utilized, and if they can’t sell the EVs, the plants, most of which are in Republican districts — those jobs are going to disappear. You’re going to end up with unused empty factories. It’s going to hurt jobs, lead to uncertainty and make the U.S. auto industry less competitive globally. If they’re not pushing forward with electrification, and automakers from other countries are, that’s going to give those automakers an advantage.”

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Automakers and their allies have heard, like the rest of us, what Trump said during the campaign and through their main U.S. trade group have highlighted their interests to him. John Bozzella, president and CEO of the Alliance for Automotive Innovation, in a letter to Trump after his election in November, pointed to a range of regulatory concerns and the industry's need to compete with China, but did not seek the end of EVs.

The alliance on Tuesday issued a statement attributed to Bozzella: "The president is paying close attention to the competitiveness of the American auto industry. And anyone who has been paying attention knows there’s a mismatch between current EV market dynamics and the emissions and EV sales targets called for in recent regulations — especially in the states that adopted California’s gas-powered vehicle ban and EV sales requirements (that are by any measure not achievable)."

California, which routinely is granted exemptions to the federal Clean Air Act to set tougher fuel economy standards, seeks to ban sales of gasoline-powered cars by 2035.

“The country should have a single, national standard to reduce carbon in transportation. We can't have regulations that push the industry too far ahead of the customer," Bozzella said.

Detroit automakers react

On Tuesday, Ford Motor Co. spokesman Richard Binhammer told the Detroit Free Press that “we continue to evaluate the initiatives” and Ford does not have any further comment yet as to what Trump has done or may do in the near future and how it would impact Ford.

But at the Detroit Auto Show on Jan. 9, Ford Executive Chair Bill Ford told reporters he got an unexpected phone call from Trump earlier this month seeking Ford’s input on the auto industry. As the Detroit Free Press reported, Ford said he had a long conversation with Trump and hung up feeling confident that the automaker will “have a seat at the table” with the new administration.

“(Trump) understands the importance of our industry and Ford in the industry,” Ford said on Jan. 9. “He wants to be helpful. I think once he gets his staff together, we’ll probably be able to go a little bit deeper."

In a statement from Stellantis provided by spokeswoman Jodi Tinson on Tuesday, the company said it "is well positioned to adapt to the policy changes enacted by the new administration. President Trump's clear focus on policies that support a robust and competitive manufacturing base in the United States is hugely positive and we look forward to working with him on the crucial objectives of strengthening our industry and the nation's economy."

Stellantis owns the Jeep, Ram, Chrysler, Dodge and Fiat brands.

Mary Barra, General Motors CEO, has said she expects GM to have a seat at the table in setting auto policy, and on Monday tweeted congratulations to Trump, saying "@GM looks forward to working together on our shared goal of a strong U.S. automotive industry."

Some on Wall Street said Tuesday that Trump’s moves to rescind Biden’s clean air initiative is positive for the Detroit automakers because they can now build a foundation of electric vehicles, but not be forced by government regulations to go fully electric.

Dan Ives, managing director and senior equity analyst at Wedbush Securities, told the Free Press he also believes that Trump will have a phased wipeout of the EV tax credit this year.

“This will be a multistep process for Trump with the EV emissions, and ultimately GM, Ford, Stellantis will have to adjust to a new normal for the automakers as the EV incentives and 2030 targets slowly get pulled by Trump,” Ives said. “We see hybrids becoming front and center and less aggressive EV targets for the 313 area code going forward.”

Uncertain threat of tariffs looms

Kevin Mixer, senior director analyst for automotive manufacturing at Gartner, said the new Trump administration’s stated intention to cut incentives and other governmental initiatives aimed at accelerating the adoption of electric vehicles could slow purchase rates.

“However, EVs have already established a presence in the market and are gaining traction worldwide,” Mixer told the Free Press. “The U.S. represents just one segment of the global market where automakers compete. Any changes in the administration's priorities might impact the timeline for product releases, but not their eventual success.”

Pointed comments from Trump about the possibility or likelihood of imposing tariffs on products coming from Canada and Mexico are also on the minds of analysts and others.

Mixer said it's difficult to predict the impact of tariffs until it is known what Trump imposes. But in the short term, Mixer said, “they are likely to increase vehicle costs and impact vehicle demand.”

Morningstar analyst David Whiston said the prospect of increased tariffs worries him for the Detroit automakers.

“I think in the auto industry, everyone is hoping the 25% is not going to be a long-term tariff and I do think Trump is more interested in using tariffs to get Canada and Mexico to do what he wants on fentanyl and immigration than on just hitting them with a tariff,” Whiston told the Free Press in an email. “He’s trying to leverage American buying power to influence immigration and illegal drugs, but it’s dangerous to the Detroit 3 too, especially GM and Stellantis who use Mexico and Canada for production more than Ford does.”

But he said no automaker is safe because parts cross North American borders many times before ending up in a finished vehicle, even if that vehicle is made at an American assembly plant.

“So a tariff each time will raise prices by at least a few thousand dollars on all vehicles, not just Canadian- and Mexican-made ones,” Whiston said. “The fact that he gave a date of Feb. 1 rather than immediately doing the tariffs, is to give Canada and Mexico a little more time to get a deal done. I’m not optimistic the industry can avoid tariffs, though, for his entire term. Have to hope they are short-lasting.”

Although Trump has been vocal about EVs and other issues affecting the auto industry, changes could be influenced by factors beyond executive branch action.

Abuelsamid noted that some of the changes that Trump has touted might have come to pass even without an executive order. He pointed to the U.S. Supreme Court's decision on June 28, 2024, that overruled the administrative-law doctrine known as “Chevron deference.”

In place since 1984, the Chevron deference had allowed federal agencies to interpret ambiguous congressional statutes within reasonable parameters.

Since the current fuel-economy standard is above the latest legislative mandates from the 2007 Energy Act, there is no reason to set the bar higher from a congressional standpoint.

“The current standard is 41/42 (mpg), and will go up to 50 with the current requirements, but that goes above and beyond what Congress mandated,” Abuelsamid said. “Now judges no longer have to defer to regulators; they can stick with what Congress requires. Unless Congress explicitly asks for it, regulators cannot do it. Regulators can do it, I should say, but the courts can void those rules.”

Free Press staff writer Todd Spangler contributed to this report.

Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber. Submit a letter to the editor at freep.com/letters.

This article originally appeared on Detroit Free Press: Trump revoked Biden EV 'mandate,' but immediate impact not clear