The US electric vehicle market may face a significant price hike due to new tariffs imposed by the Trump administration, threatening California’s ambitious climate goals. The 25% tariffs on all imported vehicles and certain automobile parts will have a ripple effect on the entire automotive industry.
Electric vehicles (EVs) are particularly susceptible to price increases, as lithium-ion batteries rely on rare-earth metals found overseas. Although some American automakers are transitioning to new battery technology, many of the largest EV battery producers are in China, South Korea, and Japan. The upcoming 125% tariff on all Chinese goods will further disrupt supply chains.
California’s climate goals rely heavily on EV adoption, with one in four cars sold being zero-emission or plug-in hybrid by 2024. However, foreign automakers dominate the sector, accounting for around 40% of EV sales in California in the fourth quarter of 2024. The state’s success story may be threatened as tariffs increase prices.
Tesla, the best-selling EV maker, has seen a decline in sales due to Elon Musk’s association with controversy. While discounts can still drive demand, experts warn that higher prices will lead to reduced car purchases, harming the economy and environment.
To encourage EV adoption, California officials must address the rising cost of electricity. With tariffs in place, state officials must ensure driving electric remains cheaper than driving gas to maintain growth in the number of EVs on the road.
Source: https://www.latimes.com/environment/story/2025-04-09/tariffs-will-make-california-ev-goals-harder-to-achieve