Electric Vehicle Industry to Thrive Despite Trump’s Funding Cuts, Say Experts

Despite the challenges posed by the new Trump administration, experts assert that electric vehicles (EVs) are poised to become a significant component of the United States vehicle fleet.

Todd Cassidy, managing director at Brown Gibbons Lang & Company, emphasized that automakers and suppliers unanimously acknowledge the future of electrification, questioning only its timeline and magnitude. “Every automaker recognizes the inevitability of electrification,” he stated.

President Joe Biden’s Infrastructure Investment and Jobs Act, along with the Inflation Reduction Act, allocated billions to promote electric vehicle adoption. These funds aim to facilitate consumer purchases, support charging station installations, and bolster manufacturing capabilities. The Biden administration also set a non-binding goal for half of all new vehicles to be electric by 2030, striving to reduce U.S. carbon emissions.

In stark contrast, Trump took immediate action on his first day in office by signing an executive order that overturned what he labeled the “electric vehicle mandate.” This order aims to enhance “consumer choice” and eliminate federal subsidies and certain state emissions exemptions, like those in California.

Recently, Trump also halted a $3 billion project intended to expand the network of EV charging stations—a move reminiscent of his prior efforts to retract emission standards established by President Obama. Despite these political shifts, Cassidy noted that the evolution of the electric vehicle industry has a prolonged “gestation period,” meaning that significant changes will not happen overnight.

The current landscape features three major vehicle types: internal combustion engine (ICE) cars, hybrid vehicles, and all-electric models. By mid-2024, hybrids and battery-powered vehicles represented 19% of new vehicle sales, while electric-only vehicles accounted for 7%. Particularly in the luxury segment, electric vehicles had a more robust presence, making up 33% of sales, with an average price of $56,371.

Alan Taub, an engineering professor and director of the Electric Vehicle Center at the University of Michigan, noted that the pursuit of electric vehicles has been ongoing for decades. Historical limitations on battery technology stymied earlier efforts, but advancements in lithium-ion batteries during the 1990s reignited the industry’s focus on electrification. Taub describes modern EVs as superior vehicles due to their reduced mechanical complexity, faster acceleration, and quieter operation.

The software integral to modern electric vehicles is another transformative feature, with Rampton highlighting that the complexity of vehicle coding surpasses that of the internet. The EV center collaborates with major players in the auto industry to identify labor market gaps, with Taub asserting that the transition to electric vehicles will require an upskilling of the workforce rather than outright job losses.

Electric vehicles are primarily driven by environmental considerations. Usha Haley, a business expert at Wichita State University, remarked that EVs could potentially lower U.S. carbon emissions by 50%, as they significantly reduce greenhouse gas outputs. However, she acknowledged the broader environmental challenges, such as lithium extraction and battery disposal.

Yet, electric vehicles typically carry a higher price tag upfront—averaging about $10,000 more than their gasoline counterparts. The Inflation Reduction Act does offer a tax credit of up to $7,500 for new EV buyers, though the future of such incentives under Trump remains uncertain. Experts believe state initiatives may continue to promote electric vehicle adoption regardless of federal policy shifts.

Despite potential federal rollbacks, analysts assert that the momentum for electric vehicles will persist. Taub predicts that by 2030, owning a battery electric vehicle will be comparably affordable to a gas-powered one.

Both Taub and Rampton maintain that auto manufacturers must adapt to meet growing EV demands. As the industry evolves, partnerships between automakers may emerge to facilitate infrastructure development, ensuring that electric vehicles continue to thrive in the market.