Donald Trump ends US electric car target on Day One
01/21/2025 07:18 PM
Despite working with Tesla CEO Elon Musk on his re-election, US president Donald Trump has killed the electric vehicle target on his first day back as US president.
United States President Donald Trump has abandoned the country's electric vehicle targets – among other potential changes – on his first day back in office with the full support of electric car maker Tesla's Elon Musk.
Trump dropped the United States (US) federal government's aim for half of all new vehicle sales in the US to be zero-emission cars – effectively meaning battery-electric – by the year 2030.
The ambition – which according to Reuters had the support of US car makers including General Motors, Ford and brands importing vehicles to North America – was signed in as an executive order by president Joe Biden in 2021 and was not legally-binding.
The support came after the target had already been reduced from 63 per cent after Biden succumbed to pressure from US car makers and lobby groups.
The Fact Sheet on the 2021 announcement has already been removed from The White House official website.
The decision has significant impact on many global car makers as the number of Chinese-made electric vehicle exports continue to increase, and as US and European brands decide their long-term model line-ups – and what portion of them will be electric cars.
At the 2024 Republican National Convention in July 2024, Trump said: "I will end the electric vehicle mandate on day one, thereby saving the auto industry from complete obliteration … saving US customers thousands and thousands of dollars per car."
According to Reuters, Trump is also pressuring state governments to follow.
This includes seeking the removal of a waiver from the Environmental Protection Agency (EPA) for California – provided by Biden in 2022 – allowing the state's ban on the sale of new petrol vehicles from 2035.
At least eleven other US states followed in adopting the 2035 ban, with reports from The Guardian suggesting California will challenge any attempt by Trump to abolish the ban.
Trump also said his administration is considering ending electric vehicle tax credits, currently up to $US7500 ($AU12,026) per vehicle , while freezing distribution of money from a $US5 billion ($AU8 billion) fund intended to develop electric vehicle charging infrastructure across the US.
The policy shift comes as Trump was inaugurated as US president on 20 January 2025, having defeated Kamala Harris in the November 2024 US federal election, saying he had "100 executive orders waiting" ahead of his official swearing in as president.
It is now clear ending the electric vehicle target was one of those orders – with 42 issued in the first 24 hours – as promised by Trump ahead of the November 2024 vote.
In the lead-up to the 2024 election, the Republican candidate had sceptically described electric vehicles a 'green scam', a term applied to actions/objects appearing environmentally beneficial but are not.
The comments came ahead of the strong public support for Trump's re-election from the CEO of US electric car maker Tesla, Elon Musk – who donated more than an estimated $US200 million ($AU320 million) according to Forbesto help Trump return to office.
Musk was not at the Biden administration's 2021 announcement of the 2030 target – which was attended by Ford CEO Jim Farley and General Motors (GM) Chief Executive Mary Barra – posting "Yeah, seems odd Tesla wasn't invited" on social media in response.
Yeah, seems odd that Tesla wasn't invited
— Elon Musk (@elonmusk) August 5, 2021
The Tesla chief has not posted any comments on social media regarding the latest move but may have supported the end of the 2030 electric car mandate.
Musk may have seen it as providing opportunity for rivals – such as GM, Ford and Chrysler-owner Stellantis – to potentially catch up in the electric car segment.
Tesla is currently the world's number one electric car maker in 2024 – despite China's BYD closing in on the US brand – and also continues to lead in terms of electric car infrastructure.
A total of 1.3 million electric cars were sold in the US in 2024, which represents a year-on-year increase of 7.3 per cent, with the Tesla Model Y leading ahead of the Tesla Model 3 and Ford Mustang Mach-E.
While still the best-selling electric car brand, Tesla's market share in the US dropped 49 per cent in 2024 – down six per cent – a trend mirrored in other places, including Australia, where Tesla sales slid even further with a 17 per cent decline.
Tesla also sold fewer cars globally in 2024 to record its first annual sales decline, missing previous growth forecasts.
General Motors and Ford both set full-year brand records in 2024 for the number of electric vehicles sold, while Stellantis struggled amid a restructure including leadership changes in the US and globally.
Yet the sharpest rise in sales in the US was in hybrid vehicles – where Tesla does not compete – with 1.9 million sold compared to 1.2 million in 2023.
Electric vehicles are not the only area of the automotive industry Trump is expected to target, given the changes made between previous US government administrations.
Trump pulled the US from the 2015 Paris climate agreement – which includes carbon emissions reduction targets, prompting a push for battery-electric cars – during his first term in office.
Biden had the US re-engage with the Paris agreement, yet the new Trump administration also signed a Day One order to withdraw the US a second time.
Australia is a signatory to the Paris climate agreement, a step towards its goal of becoming a carbon neutral nation by 2050 including the New Vehicle Emissions Standard introduced on 1 January 2025.
Biden also pushed for new emissions standards, which were passed in 2024 after being somewhat watered down after consultation with US car makers.
Trump has also pledged to tax Chinese-made cars out of the US – beyond the 102 per cent tariff applied by the outgoing Biden administration – as part of his 'America First Trade Policy'.
The policy was another Day One executive order from the president, which said:
"I am establishing a robust and reinvigorated trade policy that promotes investment and productivity, enhances our Nation's industrial and technological advantages, defends our economic and national security, and — above all — benefits American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses."
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