Donald Trump’s resounding election victory Tuesday that will make him the 47th president of the United States could prompt U.S. automakers to shift business strategy after spending billions on a transition to electric vehicles to keep up with the Biden administration’s climate goals and China’s growing EV dominance.
As Republicans appear poised to seize control of every federal policymaking body in Washington, every automotive rule, law and incentive established by outgoing Democratic President Joe Biden — and ones that have existed for decades — could be on the chopping block, if campaign promises are to be believed.
«As EVs continue to grow, it seems we are at one of those inflection moments,» said Tyson Jominy, vice president of data and analytics at J.D. Power.
Those policies include emissions and fuel economy rules that were set to shape the industry’s product mix into the next decade, laws that have promised huge sums of money to aid automakers in an EV transition, and trade policy that could upend the global automotive supply chain and the relationships between businesses across international lines.
Detroit’s United Auto Workers — led by Trump nemesis Shawn Fain — will be watching closely as the once-and-future president guides federal labor policy and continues his embrace of Tesla Inc. CEO Elon Musk, who’s been no friend to union efforts even as his ties to Trump appeared to deepen as Election Day approached.
Among the world’s richest people, analysts say Musk and his companies could benefit from a Trump presidency. Shares in Tesla jumped more than 15% Wednesday, powered by a broad Trump rally; his SpaceX holds contracts with NASA worth billions; and Musk said promises by Trump to appoint him head of a government efficiency department could position him to shape development of a policy regulating self-driving vehicles like those produced by Tesla.
“The biggest positive from a Trump win would be for Tesla and Musk,” Daniel Ives, a Wedbush Securities analyst, wrote in a report to clients. Tesla, he added, would command a competitive advantage over other manufacturers in the event the United States reduces tax incentives for electric vehicles.
Many of the actions taken by Biden’s administration to support the transition to such electric vehicles as Teslas came through regulations, not laws passed by Congress and signed by the president. Regulations, in times of divided government, can take years to unwind. But if Republicans take back the House to go along with their Senate and White House victories, they could swiftly slash those regulations.
The GOP’s actions could start — on the lower end — from undoing or modifying recent rules they have said amount to an «EV mandate,» which emerged as a top campaign issue in automotive-heavy Michigan. On the higher end, Republicans could seismically alter vehicle emissions and environmental policy in the United States by gutting California’s unique, decades-old privilege to set stricter rules than the federal government and drive state-level standards across the country.
Consequently, automaker executives, while stating they will work with any administration, will have to adapt their electrification plans since the changes could hinder EV adoption growth.
The changes could make it even more difficult to turn a profit on the new vehicles, something that has been elusive to all domestic companies besides Tesla. But they could also give automakers breathing room to make the transition more slowly, without pressure to prioritize long-term environmental and Chinese competition considerations over short-term profits.
The results potentially could indicate the country is opting out of the race to electric vehicles, Jominy said.
“It feels that way as Trump has said he is against EV mandates, which, therefore, the implication being that the IRA will be reversed or gutted,” he said. “That’s the biggest support for EVs to have gotten where they are today, which is about 10% of the market.”
Impact on the IRA and tariffs
Automakers will watch how the Trump administration addresses federal funding for EVs through the Inflation Reduction Act. The IRA extended a tax credit that gives consumers up to $7,500 for purchasing an electric vehicle, though there are stipulations for which vehicles are eligible thanks to domestic production requirements aimed at reducing reliance on China for critical components.
The IRA also provides automakers support for manufacturing EVs. Among other investments, the federal government promised in July to provide $1.7 billion in grants to help revitalize 11 shuttered or at-risk auto manufacturing and assembly facilities, including General Motors Co.’s Lansing Grand River Assembly Plant, which will receive up to $500 million to convert the plant to produce EVs.
Stellantis NV is also slated to receive up to nearly $575 million for two plants. About $335 million will go towards a project aimed at retooling and reopening a shuttered plant in Belvidere, Ill., and another $250 million for a project in Kokomo, Indiana.
Beyond the IRA, a $5 billion federally funded effort to install more charging stations nationwide could also see a reduction. The slow pace of execution of the program has drawn ire from Republicans and even some Democrats.
The IRA and other programs set in law require congressional action to change drastically, according to an S&P Global Mobility guide on how the election will affect the industry.
But with the Republicans likely to control both the U.S. House and Senate, «the party’s ability to reduce IRA funding as well as change the structure of the law is more likely to be successful,» Stephanie Brinley, S&P Global Mobility associate director of AutoIntelligence, noted in the guide.
Automakers are likely to rethink their launch strategies on various vehicles with so many unknowns on the horizon, Brinley noted in an interview: «I would expect to see that most automakers and suppliers already have an idea of how they might change their mix based on this.
«Do they have a plan? Do they have a direction they think they’re going to go? They do. Exactly what that direction is, and how precisely it gets from this ‘what if plan’ to actual execution will depend on how fast things move, what the drastic changes are.»
Many Democrats and Republicans have agreed on the importance of ensuring the United States gets or stays ahead of China on modern vehicle technology and EVs — though Trump has suggested the United States stop trying to compete on EVs. Both parties support tariffs on China-built EVs and technology.
Biden has increased tariffs on various Chinese products used in the auto industry, surpassing what was established during Trump’s first term. The Republican has vowed to go even further in his second term.
On the campaign trail, Trump made big promises of reinvigorating what he has labeled a «collapsing» U.S. auto industry. He claimed during one Detroit visit that auto manufacturing would be «even better than it was during its prime,» and that Michigan and Detroit would be «at the center of the action.»
During that October address to Detroit business leaders focused on the auto industry, Trump said his strategy would include more aggressive tariffs to keep Chinese cars out of the country, and would offer large tax breaks for automakers that build factories and conduct their research and development domestically. He said if foreign leaders or CEOs complain about higher tariffs, he’ll tell them to «build it in America, build it in Detroit, build it in Dearborn, or Lansing, or Grand Rapids, or Flint.»
But promises around tariffs could also leave domestic manufacturers lagging further behind competitors.
“Tariffs never work long-term,” Jominy said. “Right now, we do have tariffs keeping the Chinese automakers out. Other parts of the IRA are eroding that, and the tariffs are meant to get everybody up to speed.
“What are we going to do with that time under a Trump administration?» he asked rhetorically. «Probably sell a lot more full-size trucks and SUVs as opposed to using that time to fix the infrastructure and making sure EV charging is visible and transparent and working; and taking on the red tape to prevent EV charging down on interstates; preparing for the global market. Without those things in place, the Chinese automakers will likely still end up here. We perhaps will be less ready than otherwise.”
California and federal regulations effects
California sets arguably the most influential automotive business and environmental policies in the United States, and 11 other states have pledged to adopt its Advanced Clean Cars II regulations that require EVs to represent more than one-third of new vehicle sales by model year 2026 or 2027.
California is able to set its own standards with waivers from the executive branch thanks to a provision in the Clean Air Act. That process has become much more political since the turn of the century, and presumptive President-elect Trump’s administration could eliminate it altogether.
Biden still needs to grant a waiver for the latest set of regulations, and many industry observers believe he will sometime after the election.
The Trump administration «is expected to work toward eliminating that waiver,» Brinley noted in the S&P guide. «Simultaneously, legal challenges to ending the California exemption are under development, being prepared for when and if they may be needed. Ultimately, any legal challenges to California’s waiver may need to be resolved by the Supreme Court.»
Those legal challenges will likely become weaker, however, if Republicans take full control of Congress and seek to change the waiver process through legislation.
On the federal regulatory side, the current administration set environmental standards in March that boost EVs by slashing tailpipe emission allowances, though the standards do not prescribe one vehicle technology for hitting requirements.
Brinley noted the current Environmental Protection Agency greenhouse gas emissions standards and the National Highway Traffic Safety Administration’s newest fuel economy regulations for light vehicles run through 2032, but are not aligned, making it difficult for automakers to meet both.
«Regardless of which political party controls the White House or the two chambers of the Congress, change seems necessary to realistically align regulations with what is technologically feasible, with what consumer demand is for the technology, and with what is profitable at a price point consumers are willing to pay, and to accomplish those factors within the defined timeframe,» Brinley noted.
Brinley, in her report, projected that the 2028 model year targets will be delayed and the 2032 model year targets extended.
How the industry is responding
In a statement, Ford Motor Co. congratulated Trump on his victory, noting that it remains «steadfast in our strategy to provide customers choice of gas, electric and hybrid vehicles. We look forward to working with the new Administration and Congress on policies that strengthen the U.S. automotive industry, which supports 9.7 million American jobs and drives more than $1 trillion into the economy each year.”
Ford, like all automakers, has struggled to make money off of its EV business. In late October the Dearborn automaker said it expected to lose about $5 billion in 2024, the low end of its previously provided guidance. To reduce its losses, Ford is idling the Dearborn plant where the F-150 Lightning pickup trucks are built starting in mid-November into 2025.
Stellantis also congratulated Trump in a statement. «We look forward to working with President-elect Trump and the new Congress on policies that support a strong and competitive manufacturing base in the U.S.,» the company said.
GM said in a statement: «We congratulate and look forward to working with the President-elect, Congress, and all elected officials to ensure that the U.S. continues to lead the world in technology and innovation to the benefit of American workers and consumers alike.»
In a push to get Harris and other pro-labor Democrats in office, the UAW launched «its largest and most aggressive get-out-the-vote (GOTV) effort in recent history» with more than 5,000 UAW volunteers engaging union members and retirees.
On Wednesday, Fain, the UAW president who has lately been donning a «Trump is a scab» T-shirt, said in a statement: «It’s time for Washington, D.C., to put up or shut up, no matter the party, no matter the candidate. Will our government stand with the working class, or keep doing the bidding of the billionaires? That’s the question we face today. And that’s the question we’ll face tomorrow. The answer lies with us. No matter who’s in office.»
The UAW faces the difficulty of trying to continue an organizing drive while defending itself to the president, and to Musk, a billionaire businessman who discussed firing striking workers with Trump. That prompted the UAW in August to file federal labor charges against both men.
“When you try to organize, you look at the protections you’ll get,” including expediting the process of being recognized or pursuing unfair labor practices, said Marick Masters, a management professor emeritus at Wayne State University. “Trump wants to rein in independent agencies, regulatory agencies and bring back a less intrusive government. That doesn’t necessarily resound to labor’s benefit.”
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