The topic of electric cars has been a mixed bag for Republican Presidential candidate Donald Trump.Recently, the former President openly admitted at a rally that he is "for" electric cars. In an attempt to clarify his position on the subject, he explained that a particular fan of his inspired his switch-up. “[Kamala Harris] wants to get rid of gas-powered cars and replace them with all electric,” Trump told the crowd in Atlanta. “They don’t go far, they cost too much, they’re all made in China; other than that they’re fantastic, and I’m for electric cars.”“I have to be, you know, because Elon [Musk] endorsed me very strongly, Elon. So I have no choice.” Related: Elon Musk's endorsement inspired Trump's sudden flip-flop on EVsPreviously, he railed on what he called the Biden "EV mandate;" a term he used to refer to newly revised EPA rules unveiled in March, which were looser than those unveiled in 2023. While he isn't a fan of government bureaucracy, a recent interview with Trump reveals that he isn't fond of government "handouts" either. If elected, he promises a change that can dramatically change the U.S. EV market.
Republican Presidential nominee, former president Donald J. Trump remarks during a campaign event at Precision Custom Components on August 19, 2024, in York, Pennsylvania. Tierney L. Cross/Getty Images
Cutting off a lifelineStaunch critics of government spending and overreach can rejoice. In an interview with Reuters on August 19, shortly following a campaign event in York, Pennsylvania, Trump told the outlet that he seeks to end a program that is a lifeline for automakers that make EVs.The Republican nominee said that if elected, he would consider ending the $7,500 tax credit for electric vehicle purchases that President Biden's Inflation Reduction Act currently funds. "Well, we are looking at [EV tax credits], that is a big thing, but you know tax credits and tax incentives are not generally a good thing," Trump told Reuters. "I am not making any final decisions. I am a big fan of electric cars, but I am a fan of gasoline-propelled cars and also hybrids, and whatever else happens to come along. And you can't mandate that you can only buy an electric car.More Business of EVs:Waymo finds new way to bring chaos to quiet city streetsGavin Newsom's 'EV mandate' is under U.S. Supreme Court threatBMW's clever, new EV app is a privacy nightmare"Other people's money."Funded directly through taxpayer money, the $7,500 IRA tax credit has been instrumental in providing a valuable incentive for motorists to ditch the gas pump for the electric plug. As of June 2024, EV and plug-in buyers have run up quite the tab on their brand-spanking-new vehicles. Since new rules that made it easier to claim credits took effect on January 1st this year, more than one billion dollars in tax credits have been given to buyers of qualifying EVs and plug-in vehicles.The record in itself is astonishing, as the 46 EVs and plug-ins eligible for $3,750 to $7,500 in federal tax credits are not an exhaustive list of every EV or plug-in on the market.Many models are not eligible for tax credits due to price restrictions or the Treasury's strict Foreign Entity of Concern (FEOC) guidelines meant to reduce the EV supply chain's dependence on China.Related: Trump's VP pick is the EV industry's worst nightmareRepublican criticismTrump is not alone in criticizing the IRA tax credit on EVs and plug-ins. Most notably, his pick for Vice President, JD Vance, introduced a bill to the Senate floor in 2023 called the Drive American Act. It would eliminate the $7,500 EV tax credit and replace it with a subsidy of the same amount for American-made gas-guzzlers.However, on May 2 of this year, Senator John Barrasso (R-Wyo.), backed by a coalition of Republican senators including Tom Cotton (R-Ark.), Marco Rubio (R-Fla.), and Rick Scott (R-Fla.) introduced a measure called the Eliminating Lavish Incentives to Electric (ELITE) Vehicles Act; a bill that would eliminate subsidies for EVs and plug-ins altogether. In a statement, Barrasso played true to the bill's name, arguing that the incentives benefit the kind of vehicles that only the richest Americans can afford. “The electric vehicle tax credit benefits the wealthiest of Americans and costs hardworking American taxpayers billions of dollars,” Barrasso said. “Working families in Wyoming shouldn’t be footing the bill for the luxuries of Biden’s climate elitists. The federal government has no business pushing Americans into expensive electric cars they don’t want or can’t afford."
People examine Rivian EVs at the Rivian storefront in the Meatpacking District of ManhattanSpencer Platt/Getty Images
EV GrowthTrump's statements also come at a time when new data shows that EV growth is surpassing that of gas-powered vehicles. According to a new analysis of new car registrations by S&P Global Mobility, electric car sales are growing much faster and eclipsing the rest of the auto industry.S&P Global Mobility analyst Kent Chiu told Automotive News that a wave of new models and incentives from both manufacturers and the government is driving registration growth of 3.3% compared to last year. At the same time, registrations of gas-powered cars dropped by over 8.8%. According to their data, incentives reached as high as $18,000 per vehicle, which is fueled by manufacturer incentives, as well as the $7,500 tax credit."The June month numbers were good for EVs," Chiu said. "But behind them were pretty strong incentives as a motivator."Related: Veteran fund manager picks favorite stocks for 2024
