Following the election of Donald Trump, Jeff Schuster, Vice President Research Automotive at GlobalData, offers his view on some of the changes expected in the US automotive industry from Trump 2.0:
“Automotive is one of the sectors that could see a significant mid-term impact from the new Trump presidency in the areas of Trade, Electric Vehicle Transition and Regulations.
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Trade
“We anticipate that the current state of protectionism will be intensified under Trump, with Chinese imported vehicles and technology being targeted. Tariffs are a significant concern for the industry that could lead to higher vehicle prices for consumers and potentially limit choices. Tariffs have implications for any vehicles imported to the US, including those from Mexico and Canada. This could result in a decrease in the share of affected vehicles and potentially impact overall sales volume as prices remain elevated. Retaliation is likely, which could negatively affect US exports. Vehicle sourcing changes would likely result but not in the short-term as it takes time to change direction. We will need to wait and see if widespread tariffs are merely a negotiation tactic or a genuine plan.
Electric Vehicles (EVs)
“We anticipate that the transition to electric vehicles (EVs) in the US will be hindered under Trump’s administration. His focus on reducing oil/fuel prices and rolling back emissions standards could lead to a 15-20% decrease in the market share of battery electric vehicles (BEVs) in the US by 2030 compared to our base forecast. This will depend on the extent to which the administration cuts investments in infrastructure and eliminates the leasing tax credit under section 45W of the Inflation Reduction Act (IRA). However, the Trump administration could potentially incentivize US assembly of Chinese EVs or battery production.
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By GlobalDataRegulations
“The pro-internal combustion engine (ICE) agenda is likely to slow the emissions reductions regulation by the Environmental Protection Agency (EPA) and the Corporate Average Fuel Economy (CAFE) improvements by the National Highway Traffic Safety Administration (NHTSA). We anticipate a repeal of the EPA waiver for California’s Advanced Clean Cars II laws, which could make it easier for vehicle manufacturers to operate in the US, but given the substantial investments already made, would create a different set of challenges. We expect some EV programs to be delayed or canceled until there is clarity on potential policy changes.
“An additional wildcard is the likely push for Autonomous Vehicles under Trump 2.0, running counter to a pullback EV investment and incentives.”
Jeff Schuster, Vice President Research, Automotive, GlobalData
