SLOWING electric vehicle (EV) adoption is likely to accelerate even further as President-Elect Donald Trump delivers on his promise to gut plug-in friendly policies he called the “green new scam”.
Automotive forecaster GlobalData on Wednesday (Nov 6) cut its outlook for EV market share in the US for 2030 to 28 per cent from 33 per cent due to Trump’s election.
“The transition to electric vehicles in the US will be hindered under Trump’s administration,” Jeff Schuster, GlobalData’s vice-president of automotive research, said in a note. Trump’s focus on lowering oil prices and weakening tailpipe emissions standards could reduce electric vehicle market share by 15 to 20 per cent, he said.
Automakers have poured billions of US dollars into battery and EV plants in a push to field more electric models that will increasingly required under US rules governing vehicle efficiency and tailpipe emissions. Now, some US$129 billion worth of EV investment in North America through 2027 is “at risk”, Mark Wakefield, co-head of the automotive practice at consultant AlixPartners, said. The US$7,500 tax credit consumers can receive for buying a North American-built EV could also be in jeopardy.
“What the EV market will look five years out is definitely less, much less,” Wakefield said. “The amount of vehicles you want out of your factories and your industrialisation for EVs is less and less for longer.”
Automakers will continue to slow spending on EVs and delay or cancel new battery-powered models, Wakefield said. They have been making those moves in advance of the election and likely would have reversed them had Vice-President Kamala Harris prevailed in the presidential race, he said.
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Carmakers will also look for ways to increase production of profitable petrol-fuelled vehicles, while converting EV plants into facilities that can also built petrol-electric hybrids, as Volkswagen’s new Scout lineup is doing at its US$2 billion EV factory under construction in South Carolina.
“From a profitability perspective it’s a challenge because you have got a lot of industrial plans with assumed volumes for EVs that are less” now, Wakefield said. “So some of those plants might turn into hybrid plants doing both, rather than pure EV.”
Trump will face difficulties rolling back President Joe Biden’s Inflation Reduction Act legislation that spurred a building boom of EV and battery factories, many in Republican-leaning states. Bigger changes are likely in store for fuel economy regulations, Wakefield said. Trump softened those rules during his first administration and has promised to end what he calls “EV mandates” on the first day of his second term, though changing such policies involves a lengthy process that can take months or years.
“It’s less about what happens this year,” Wakefield said. “That does not really hit you until 2027.” BLOOMBERG
