Shortly after the US newly appointed president took charge, the global EV industry started feeling the heat. The executive orders he signed on the first day also include the one reversing electric vehicle (EV) policies established during Joe Biden’s administration.
Biden’s 2021 executive order aimed for 50% of all new vehicle sales in the US to be electric by 2030. However, this target was non-binding and relied heavily on federal incentives and state-level cooperation.
What the Order Entails
Trump’s executive order focuses on halting unspent government funds allocated for EV charging infrastructure. It also challenges a waiver granted to California, which allowed the state to enforce stricter emissions standards and ban internal combustion engine (ICE) vehicles by 2035.
In the order, Trump emphasized the need to end what he described as “unfair subsidies” and policies that disproportionately favor electric vehicles over other technologies. He called on the Environmental Protection Agency (EPA) to terminate, “where appropriate, state emissions waivers that limit sales of gasoline-powered cars.”
The executive order also reignited discussion about the federal $7,500 EV tax credit. President Trump has previously criticized this incentive, suggesting it creates an uneven playing field.
Automakers’ Concerns
Trump’s decision contrasts sharply with the requests of major automakers. In November 2024, a coalition of automakers under the Alliance for Automotive Innovation urged the government to maintain EV policies.
The coalition highlighted that the industry thrives on “stability and predictability,” citing billions of dollars already invested in EV research and development. Automakers argued that consistent policies are essential to meet growing consumer demand and global competition.
What Next?
The path forward for Trump’s rollback remains unclear. Experts suggest that while an executive order can set the tone, changes to emissions standards or state waivers may require further action through the EPA or Congress.
According to reports, the administration is exploring options to propose new legislation targeting emissions regulations.
The reversal marks a significant shift in U.S. EV policy and signals potential challenges for automakers and states like California, which have led the push for cleaner transportation technologies.
