President Donald Trump issued an executive order directing his administration to evaluate the elimination of subsidies and policies that support electric vehicles (EVs). The order criticizes government efforts that promote EV adoption, labeling them as “ill-conceived market distortions” that effectively push consumers toward electric options. While the US does not enforce a federal EV purchase mandate, stringent vehicle emission rules indirectly compel automakers to prioritize electric models.
California’s Zero-Emission Policies in Focus
The directive highlights potential changes to policies allowing states like California to enforce stricter emission standards. California’s zero-emission program requires automakers to increase the production and sale of electric vehicles, aiming for a complete shift to zero-emission cars by 2035. By targeting these waivers, Trump signals an intent to challenge state-level initiatives promoting EV adoption, potentially easing restrictions on gas-powered vehicles.
The order also halts funding for EV-related projects approved under President Joe Biden’s administration, including investments from the Inflation Reduction Act and Infrastructure Investment and Jobs Act. Among these, $7.5 billion was allocated to establish a national network of EV charging stations. Freezing these funds threatens the development of critical infrastructure intended to make EVs more accessible to consumers.
Stock Market Reaction to Policy Shift
News of Trump’s directive triggered significant declines in the stock prices of EV manufacturers and charging companies. Tesla shares dropped 4%, while Rivian and Lucid fell by 7.6% and 8.5%, respectively. Charging infrastructure companies such as EVgo and Blink Charging also experienced losses. Investors expressed concerns about reduced government support for EVs, which could slow market growth and innovation in the sector.
Trump’s administration has previously suggested repealing federal incentives like the $7,500 EV tax credit for buyers. While completely removing these incentives would require Congressional action, Trump has the authority to limit company eligibility and make smaller adjustments. Implementing such changes could take months, potentially impacting EV sales and manufacturing efforts in the near term.
