President Trump’s executive orders aim to reverse climate change efforts by ending subsidies for electric vehicles (EVs). The move has sparked pushback from automakers, Republicans, and environmental activists. While some see it as a reprieve for the fossil-fuel industry, others warn of potential job losses and stranded capital.
The Biden administration’s multibillion-dollar program to address climate change is being dismantled, with Trump ordering federal agencies to pause disbursement of funds allocated by Congress. The Inflation Reduction Act provided tax credits of up to $7,500 for new EV buyers and $4,000 for used models. Trump has rescinded these incentives.
Automakers like Rivian and General Motors have received billions in loans to develop electric sports utility vehicles and battery factories. However, if the subsidies are removed, carmakers may struggle financially. Analysts predict a decline in demand for electric vehicles, which could lead to costly underuse of factories and stranded capital.
Environmentalists and some Republicans are concerned about job losses and the impact on local politics. Republican representatives from states like Georgia, Ohio, South Carolina, and Tennessee, where the loans were secured, may hesitate to repeal laws that have brought their districts jobs and investment.
The U.S. auto industry is facing uncertainty due to Trump’s promise to impose 25 percent tariffs on goods from Canada and Mexico, major suppliers of cars and car parts. Tariffs could “shatter” the industry, according to chief economist Carl Weinberg.
While some automakers, like Stellantis, have welcomed promises by Trump to rescind emissions and air-quality standards, others remain noncommittal. Elon Musk’s Tesla, which accounts for over half of electric cars sold in the US, has not commented on the issue.
The move highlights the climate of uncertainty surrounding EV policies, with individuals and families deciding what cars to buy based on market share gains due to subsidies rather than financial incentives alone.
Source: https://www.nytimes.com/2025/01/21/business/trump-ev-subsidies.html