Trump Team’s 100-Day Plan Shows EV Policy Stripped of Rebates

(Bloomberg) -- Advisers to President-elect Donald Trump are recommending a two-pronged approach to reshape the US auto industry: cut federal subsidies to boost electric-vehicle sales while still fostering a domestic supply chain to produce them.

Taken together, the suggestions highlight how Trump’s campaign promise to “terminate” EV mandates could manifest in policies that prioritize domestic carmakers and suppliers — but without taxpayer support for consumers.

The recommendations were outlined as potential policy changes for the incoming Trump administration’s first 100 days in office, according to people familiar with the matter and a document seen by Bloomberg News. Several initiatives dovetail with the desires of conservative, free-market advocates and fuel producers who have long said the US government shouldn’t dictate what cars Americans should drive and make.

Trump’s advisers encouraged relaxing environmental reviews and speeding up permitting for federally funded EV and infrastructure projects, including the development of batteries and critical minerals, according to the document and the people, who asked to not be identified because the deliberations are private.

Those projects could also potentially benefit from expanded tariffs the advisers are recommending on a suite of EV-related imports, including critical minerals, magnets, batteries, industrial control systems and assembly equipment.

At the same time, the officials are calling for a repeal of federal policies that boost consumer demand for EVs, including the $7,500 federal tax credit for purchasers of plug-in cars, according to the document, which was reported earlier by Reuters.

Biden-era fuel-economy and tailpipe pollution regulations would also be rolled back and reset to 2019 levels. US Environmental Protection Agency approvals that allow California to impose its own limits on tailpipe emissions — including a mandate for 100% EV sales in 2035 — would also be on the chopping block.

The policy options reflect a broader shift away from departing President Joe Biden’s use of industrial policy to combat climate change. Some could also potentially benefit Tesla Inc. Chief Executive Officer Elon Musk, who has emerged as a top Trump adviser and is co-leading a broad effort to identify government waste.

Notably, the transition team isn’t recommending a repeal of advanced manufacturing tax credits that reward domestic production of key components, including EV batteries.

“The American people reelected President Trump by a resounding margin, giving him a mandate to implement the promises he made on the campaign trail, including stopping attacks on gas-powered cars,” Trump-Vance Transition Spokeswoman Karoline Leavitt said in an emailed statement. “When he takes office, President Trump will support the auto industry, allowing space for both gas-powered cars and electric vehicles.”

Other initiatives under discussion include liberalizing regulations to “encourage” the autonomous vehicle industry, confirming an earlier Bloomberg report. That recommendation echoes recent comments by Musk, who called for a federal approval process to ease deployment of autonomous vehicles, such as the robotaxi prototype his company revealed in October.

Trump is also being urged to repeal a government order forcing carmakers and technology companies to report information about crashes involving the use of automated driving technologies. The requirement applies to cars made by Tesla, which account for a significant proportion of the collisions reported under the order.

Tesla did not respond to a request for comment.

©2024 Bloomberg L.P.