Large automakers like the auto giant Tesla may not be affected by US President Donald Trump’s decision to repeal the electric vehicle (EV) mandate, but smaller EV companies and the ancillary industry are likely to be impacted. This will allow global competitors in China and the UK, who receive government support, to increase their shares in the international EV market with their EV models.
Experts in energy and the environment say the action will also hurt international efforts to cut greenhouse gas emissions and meet sustainability targets.
Reversing EV subsidies would “promote true consumer choice, which is essential for economic growth and innovation,” according to an executive order issued after Trump repealed the EV mandate.
But over time, smaller EV producers and the sector that supports them will probably be burdened by the Trump administration’s “America first” stance.
Although it is still unclear how the new regime’s repeal of the EV mandate will work out, experts noted that the US’s September implementation of higher import duties on the significantly less expensive Chinese batteries will raise the cost of production for smaller EV manufacturers like Rivian, NIO, and Karma Automotive. Stated differently, the greater expenses imposed by the tariffs had been somewhat offset by the EV mandate. The US EV industry just bears the increased expenses after the mandate is lifted, with no compensating advantages.
These US manufacturers will be at a competitive disadvantage in the global market due to their lack of domestic government assistance, while Chinese and UK automakers enter the market with significant government subsidies and support.
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