It’s not even been two weeks since former President Donald Trump won reelection, and to me, it’s very telling that some of his incoming administration’s top priorities right out of the gate seem to be car-related. One, we know about: attempting to end the electric vehicle tax credits. We’ll discuss another one down below. But if EV incentives have a new and powerful adversary, who’s going to advocate to keep them?
30%: Who Will Fight For The Tax Credits?
Trump campaigned heavily on ending the EV tax credits implemented by the Inflation Reduction Act, which is something he wants to dismantle entirely. And so far he has support from two unlikely allies: the oil industry and his new pal Tesla CEO Elon Musk. Though Musk’s companies have benefitted handsomely from subsidies and government contracts over the years, he now seems to think that ending the credits will benefit Tesla—still the most-ahead on EV production and the only Western company that can make them profitably—by kneecapping competitors. I am not sure that’s actually the case, but he’s hanging out in the White House these days and I am not.
So that’s a powerful group in the “against” column. Who’s lining up to fight for the credits? There are tons of arguments for doing so. The American EV industry is still in its infant stages, and we’ve seen what happens to electric sales in places like Europe when subsidies end: people don’t buy them. That puts at risk billions of existing and ongoing factory investments in America (plus the jobs that go with them) and the West’s ability to compete with high-tech new EVs from China. Not to mention the many environmental benefits of having cleaner cars on the road, but that argument is definitely falling on deaf ears in our current moment.
One potential EV ally is the Republican governors and members of Congress who don’t want to see those investments in their communities evaporate. But so far, few, if any, have been vocal about this to the new president; not that we’ve seen or heard publicly, anyway. But another group that wants to keep this going is energy utility companies, Reuters reports:
The U.S. utility industry wants the incoming Trump administration and Republican-led Congress to preserve clean energy and EV tax credits in the Inflation Reduction Act, Pedro Pizarro, the CEO of utility Edison International, said on Saturday.
Pizarro, who until recently chaired the board of industry trade group Edison Electric Institute, said the lobby group’s members have been making the case with the Trump transition team and Republican members of Congress that preserving the IRA is good for businesses and consumers alike.
“One of our big priorities as an industry is going to be to articulate the benefits of the IRA,” Pizarro told Reuters on the sidelines of the COP29 climate summit in Azerbaijan. “Most of those (IRA) benefits don’t actually accrue to our shareholders. They go straight to our bills and down to our customers,” he said.
[…] Retaining IRA tax credits for energy storage, transmission, nuclear power, hydrogen, EVs and others are crucial for continued growth, Pizarro said.
And then there’s the auto industry itself. Few individual car companies are speaking out here, but they are leaning on their lobbying groups to do so. Also from Reuters:
The Zero Emission Transportation Association – whose members include Rivian LG, Tesla, Uber, Lucid and Panasonic – said production tax credits have driven enormous job gains in states like Ohio, Kentucky, Michigan and Georgia, and warned killing those production and consumer tax credits would undercut those investments and hurt American job growth.
ZETA Executive Director Albert Gore said the tax credits are critical to “actually compete to win against China.”
Automakers have been making the case to the Trump transition team and lawmakers that they face stringent regulations and need tax incentives to meet them.
The Alliance for Automotive Innovation urged Congress in an Oct. 15 letter to retain the EV tax credits, calling them “critical to cementing the U.S. as a global leader” in future auto manufacturing.
I’m wondering who will end up being the first person or company to really break ranks and speak out publicly here. A red state elected official with a huge EV investment in his or her state? A huge traditional automaker that doesn’t want to lose out? That may mean going up against Trump and Musk directly, which few people seem to have the stomach for. But that may need to change if the credit is to be saved.
60%: Trump Already Targets Self-Driving Vehicle Rules
Photo by: InsideEVs
Musk’s influence on the new administration is already being profoundly felt, with the billionaire reportedly on calls with world leaders and weighing in on key personnel decisions. The next U.S. Department of Transportation chief could be a Musk pal, as well as a former Uber executive and a SpaceX investor. And that would give Musk profound influence over the agencies that not only set rules for autonomous vehicles but have also been investigating Tesla for its many crashes and safety issues on that front.
Over the weekend, we learned that self-driving car rules will be top priority for Trump coming in. Granted, the U.S. rules for autonomy have long needed an overhaul; they’re currently a state-by-state patchwork of regulations that nobody is happy with and are probably slowing growth down.
But as Bloomberg reports, whatever federal-level rules do happen will almost certainly benefit Tesla. And what will that mean for safety on our roads?
If new rules enable cars without human controls, it will directly benefit Elon Musk, the Tesla Inc. chief executive officer and Trump mega-donor who’s become a powerful fixture in the president-elect’s inner circle. He’s bet the future of the EV maker on self-driving technology and artificial intelligence.
Current federal rules pose significant roadblocks for companies looking to deploy vehicles without steering wheels or foot pedals in large quantities, which Tesla plans to do. The Trump team is looking for policy leaders for the department to develop a framework to regulate self-driving vehicles, according to people familiar with the matter, who asked not to be named because they weren’t authorized to speak publicly.
While the Transportation Department can issue rules through the National Highway Traffic Safety Administration that would make it easier to deploy autonomous vehicles, an act of Congress would clear the way for mass adoption of self-driving cars. A bipartisan legislative measure being discussed in early stages would create federal rules around AVs, two of the people said.
Okay. And what does the market say?
Tesla shares traded up 8% in premarket trading on Monday. The stock has climbed 28% since election day. Meanwhile, shares of Uber Technologies Inc. and Lyft Inc. dropped by 2% before the start of regular trading in New York.
Don’t say I didn’t warn you.
90%: GM Layoffs Continue
Photo by: General Motors
While it’s still profitable from trucks and SUVs and has seen a lot of success with its EV sales this year, GM continues the trend of belt-tightening seen across the entire industry. It’s sadly no surprise. Interest rates are still high, sales of all cars will likely never reach their pre-pandemic levels again and costs of batteries and next-gen technology are still through the roof. As such, GM is cutting about 1,000 salaried jobs again, CNBC reported Friday:
A majority of the employees impacted were salaried workers in suburban Detroit at the automaker’s global technical center in Warren, Michigan, the person said. The United Auto Workers said about 50 union members were included in the layoffs.
The company is targeting $2 billion in fixed cost reductions this year as it deals with slowing U.S. sales, business deterioration in China and a shift in its “all-in” strategy for electric vehicles amid slower-than-expected consumer adoption.
“In order to win in this competitive market, we need to optimize for speed and excellence,” GM spokesperson Kevin Kelly said in an emailed statement. “This includes operating with efficiency, ensuring we have the right team structure, and focusing on our top priorities as a business. As part of this continuous effort, we’ve made a small number of team reductions. We are grateful to those who helped establish a strong foundation that positions GM to lead in the industry moving forward.”
100%: What Argument Can Convince Trump (And Musk) To Save The EV Tax Credit?
Let’s say you were in charge of the auto industry’s lobbying efforts, or you represent the economic development efforts of any state that’s about to see an EV and battery jobs boom. (Hey, maybe that is you; we have all kinds of readers here.) What play do you run now?
Contact the author: patrick.george@insideevs.com
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