by Changes in the Automotive Industry Due to Trump’s Policy
The automotive industry in 2025 underwent significant changes due to Donald Trump’s political decisions. The cancellation of federal tax incentives for electric vehicles and the termination of fines for non-compliance with fuel economy standards under CAFE created new rules of the game in the market.
Advantages for ICE Brands
Manufacturers focused on internal combustion engines benefited the most, as they can now concentrate on selling pickups and SUVs without financial penalties. On the other hand, companies like Tesla and Rivian are losing billions of dollars due to the cessation of revenue from the sale of regulatory credits.
Financial Implications
According to Bloomberg, General Motors spent about $3.5 billion on purchasing credits since 2022, and Ford and Stellantis also invested significant funds. This money went to brands specializing in electric vehicles, which had a surplus of credits due to zero emissions. Now, traditional automakers can redirect these funds to their own needs.
Ford CEO Jim Farley said the policy shift has the “potential to unlock a multibillion-dollar opportunity,” noting that the Blue Oval is already retooling its Oakville, Ontario, plant to build Super Duty pickups instead of EVs.
Production Changes
GM is cutting electric vehicle production and retooling plants to produce ICE models. Stellantis even brought back to life the powerful Hemi V8 engine, which was considered obsolete in the era of electrification. These changes could negatively impact the future of electric vehicle brands.
Challenges for EV Startups
The termination of tax incentives makes electric vehicles less attractive to buyers and also deprives brands of an additional source of income. Smaller companies, such as Slate, are under threat due to the high cost of their products without incentives.
The Role of the Environmental Protection Agency (EPA)
The official mission of the EPA is to protect human health and the environment, but its actions under the Trump administration contradict this goal. Supporting the relaxation of environmental standards allows automakers to produce more polluting vehicles, which could have negative consequences for the environment and consumer savings.
Research, including data from J.D. Power, shows that electric vehicles are often cheaper in the long run due to lower maintenance and energy costs. While the choice of car type should remain with the consumer, supporting environmentally clean technologies aligns with the tasks that the EPA formally proclaims. The agency’s current actions could slow down the transition to more sustainable transportation.
