Tech & Innovation - January 22, 2025

Unraveling the Impact of Trump's Executive Order on Elect...

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President Donald Trump, shortly after being sworn into office, signed an executive order aimed at ending what he referred to as the electric vehicle (EV) mandate. This has raised multiple questions, given that the United States has never had an EV mandate. The previous administration had put in place a series of incentives to make EVs more appealing to manufacturers and consumers. The new executive order attempts to undo these efforts. However, the effects of the order are not immediately clear and may take time to materialize.

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Understanding the Executive Order

The executive order signed by President Trump is more about signaling the administration's intent than having immediate practical effects. The order demands US agencies to review their rules related to EVs and determine whether they're unduly burdensome and interfere with consumer choice. The findings of this review are due in reports within 30 days. However, repealing a regulation involves a lengthy public process, involving publishing new proposed rules, taking public comments, and engaging with the industry.

Potential Impact on Vehicle Standards and Subsidy Programs

The clearest way for the White House to loosen rules requiring automakers to make more EVs will be to target vehicle fuel efficiency and tailpipe standards. These require manufacturers to reach certain levels of gas efficiency and to cap the pollutants released. One of the easier ways for automakers to meet these goals is to sell more EVs. The Trump administration may also target subsidy programs, including those that offer federal tax credits to EV buyers, reducing the price of electrified cars by up to $7,500.

The Future of EVs in the United States

Despite the executive order, automakers will continue to produce and sell electric vehicles. Some stricter emissions standards kick in in late 2026, and it usually takes manufacturers some five years to plan and build a car. Hence, vehicles following these forthcoming emissions regulations should be built and sold. The long-term future of the US auto industry is far from clear. Other governments are still pursuing EV-friendly policies, and critics warn they'll look increasingly toward China's auto industry to get them through the transition.

The electric vehicle parts of the order seem more about messaging than immediate practical effects. A lot of it is signaling the administration's intent, says Timothy Johnson, a professor of energy and environment at the Duke Nicholas School of the Environment.