According to news on November 7, after former US President Donald Trump defeated current Vice President Kamala Harris (Kamala Harris) for re-election, the US electric vehicle industry may trigger a period of turmoil.

Trump's Republican Party has generally been critical of electric vehicles in the past, viewing them as a choice forced on consumers. Trump has vowed to repeal or weaken many of the U.S. Environmental Protection Agency's vehicle emissions standards, as well as eliminate incentives to boost vehicle production and adoption such as the Inflation Reduction Act (IRA) introduced by the Biden administration in 2022.

Auto industry insiders and other officials pointed out that although Trump will be unable to completely repeal the Inflation Reduction Act, he may reduce or limit electric vehicle subsidies through executive orders or other policy means.

There are predictions that Trump may target federal consumer subsidies for electric vehicles, which currently top $7,500, rather than production subsidies for companies.

David Rubenstein, co-founder and co-chairman of Carlyle Group, said there may be adjustments to the Inflation Reduction Act, but it is unlikely to be completely repealed. There's a lot of positive stuff in there that's bipartisan, and I think both Republicans and Democrats will like it.

Under the provisions of the Inflation Reduction Act, significant investment in electric vehicle production is concentrated in Republican-controlled states such as Ohio, South Carolina and Georgia. Auto industry executives also quickly stated that their investment decisions are not entirely affected by who is in the White House, but the arrival of a new government will naturally lead to some strategic adjustments.

"Changes in government are always full of uncertainty for the auto industry because we need to adapt to new policies and regulations, as well as let new officials understand who we are and what we do," David Christ, vice president and general manager of Toyota North America, said at an Automotive News Association event near Detroit. "Governments change about every four years, so we don't change our strategy significantly as a result."

Winners and losers?

Regarding the winners and losers in this election, many analysts on Wall Street have speculated that traditional automakers, especially Detroit-based General Motors, Ford Motor Co. and Chrysler parent company Stellantis, may benefit greatly from Trump's second term and Republican control of Congress.

Bank of America Securities analyst John Murphy noted in an investor note on Wednesday that "we believe Ford and General Motors will be the main beneficiaries of the Trump administration's policies. Current environmental regulations require traditional automakers (including cars and trucks) to decarbonize their core operations by 2020 and accelerate the transition to electric vehicle product lines."

General Motors hopes to achieve an "all-electric future" and be profitable in the short term, relying heavily on federal tax incentives.

Analysts have predicted that if Democrats win the election, electric vehicle startups such as Rivian and Lucid may gain more support. However, if EV subsidies are cut or eliminated, Toyota may emerge as the winner because the Japanese automaker has been more cautious in investing in pure electric models compared to hybrid vehicles.

Shares of General Motors and Ford Motor rose 2.5% and 5.6%, respectively, on Wednesday. Share prices of Toyota and Stellantis remained basically stable. It is worth noting that Stellantis has encountered many difficulties in the US market. The share prices of Lucid and Rivian fell by 5.3% and 8.3% respectively.

Tesla, the leader in the U.S. electric vehicle industry, is an exception. Its CEO, Elon Musk, has strongly supported Trump in many swing states, and Trump has discussed making the billionaire head of government efficiency. Tesla shares soared 15% on Wednesday and hit a 52-week high earlier.

"The challenges facing Lucid and Rivian have largely been reflected in the stock market," said Murphy, an analyst at BofA Securities. "We don't expect Tesla to encounter much difficulty because it is already profitable and plans to launch more entry-level products for the masses."

The automakers did not immediately respond to requests for comment after multiple U.S. media outlets declared Trump the winner of the election. However, Detroit Motor Company and Hyundai Motor Co. expressed their congratulations to Trump and the newly elected government officials at all levels.

Ford issued a statement saying: "We look forward to working with the new administration and Congress to develop policies that strengthen the U.S. auto industry, which creates 9.7 million jobs in the United States and contributes more than $1 trillion to the economy annually."

General Motors said, "We congratulate the president-elect, Congress and all elected officials, and look forward to working with them to ensure that the United States remains a leader in technology and innovation to bring greater benefits to American workers and consumers."

California Electric Vehicle Regulations

Trump is expected to clash again with California and other states that have set independent emissions standards that include mandatory requirements for the sale of all-electric vehicles.

According to the California Advanced Clean Vehicle Regulations II (ACCII), which will be implemented in 2022, 35% of the 2026 models launched from next year must be zero-emission vehicles, including pure electric, fuel cell and some plug-in hybrid models.

Before the election, auto industry insiders revealed that many automakers would seek to delay enforcement of the rules, no matter who ended up in the White House.

The California Air Resources Board (CARB) noted that 12 states and Washington, D.C., have adopted these regulations, but half of them plan to implement them starting with the 2027 model year. This is part of the Advanced Clean Vehicles Regulations, which requires that 100% of new vehicles sold in California be zero-emission by 2035.

But data from the Alliance for Automotive Innovation shows that at the beginning of this year, only 11 states and the District of Columbia had electric vehicle market share of 10% or more. The Alliance for Automotive Innovation is an industry association and lobbying group representing most major automakers operating in the United States.

Additionally, auto executives and industry experts have predicted that Trump could eliminate or freeze corporate average fuel economy (CAFE) standards for model years 2027 through 2031.