The U.S. Ignores EVs at Its Own Peril
By Edward A. Sanchez — Jan. 21, 2025
President Donald Trump announced that he would stop the so-called “EV Mandate” on day one of his administration. The nebulous “mandate” in fact increased fuel economy standards finalized by the Biden administration in June 2024, which would require fuel economy to increase 2% per year for model years 2027-2031 for passenger cars, with light trucks increasing 2% per year for model years 2029-2031. These changes were targeted to bring the average light-duty vehicle fuel economy up to approximately 50.4 miles per gallon by model year 2031.
I am not a constitutional scholar, but undoing of the fuel economy standard changes might be slightly more difficult than the scribble of a presidential pen. The Congressional Review Act allows an incoming president to kill any regulations made within the last 60 legislative days. It would seem the fuel economy rules fall out of that timeframe. Also, a majority of the funds allocated as part of the National Electric Vehicle Infrastructure (NEVI) have been allocated, making it more difficult for the Trump administration or Congress to try to claw them back.
I am pro EV, however, I have also publicly come out in favor of ending EV purchase credits. The industry has had EV purchase credits of one form or another for more than a decade. I believe it is time for the industry to figure out how to make the economics of EV manufacturing and sales profitable organically. I am not upset that the NEVI funds have been allocated. Charging infrastructure issues are without a doubt the biggest impediment to EV adoption.
Also, as triumphant as Trump’s supporters have been of his “drill baby drill” campaign rhetoric and “ending the EV mandate,” I would only note that national industrial policy decisions and their ramifications go far beyond a single administration. The next president could be another MAGA Republican, centrist Republican, or a Democrat. Policies and investments made exclusively on the premise of this administration’s environmental or energy policies are short-sighted at best.
The North American automotive industry is at the peril of becoming an isolationist island, only producing products for itself and other markets that do not have as stringent environmental regulations as the rest of the world. To me, this does not seem like a winning strategy in the decades ahead. The majority of cars built in the U.S. are sold in the U.S., but if we want to have any kind of export strategy for the automotive industry, EVs are a necessary part of that equation.
China is showing no signs of slowing down its EV ambitions, either domestically or in its export strategy. Due to decades of desire for ever-greater profits and lower labor costs, American companies have willingly ceded their domestic industrial capacity, and wittingly or unwittingly given over their intellectual property to Chinese companies. Lithium Iron Phosphate (LFP) batteries, which are now synonymous with Chinese battery giant CATL? Co-discovered by the late American battery researcher John Goodenough.
China’s dominance in the EV space is no accident. The country’s industrial policy and strategy identified EVs in the early 2000s as a relative “white space” in the automotive sector that no company had yet dominated. Tesla, at the time, was only an upstart that made a converted Lotus Elise that sold for $100,000+.
It may be tempting to go back to gas-guzzlers and abandon EV development under an ICE and oil-friendly administration. But each day EV plans are shelved or delayed is one more day that China gains an advantage, making their entry and dominance of the EV market in the U.S. and globally only more inevitable.
(Image by Vilkass
