Advisers to U.S. President-elect Donald Trump have suggested a two-pronged approach to reshape U.S. auto manufacturing by eliminating federal subsidies aimed at boosting electric vehicle sales while continuing to cultivate a domestic supply chain for electric vehicle production.
The proposals underscore how Trump's campaign promise to "end" the Biden administration's electric vehicle mandates will be reflected in his policies. Overall, the policy will prioritize domestic automakers and suppliers while avoiding the use of taxpayer funds to support consumers.
The recommendations are outlined as possible policy changes in the Trump administration's first 100 days, according to a document seen by Bloomberg News and reported by people familiar with the matter. Several of the moves align with the wishes of conservatives, free-market advocates and fuel producers, who have long said the U.S. government should not dictate what cars Americans should drive and build.
Trump’s advisers have encouraged loosening environmental scrutiny and speeding up approvals for federally funded electric vehicles and infrastructure projects, including the development of batteries and critical minerals, according to the documents and the people, who requested anonymity.
The projects could also benefit from advisers' proposed tariffs on a range of EV-related imports, including critical minerals, magnets, batteries, industrial control systems and assembly equipment.
At the same time, officials called for an end to federal policies that have spurred demand for electric vehicles, including a $7,500 federal tax credit for the purchase of plug-in vehicles, according to the document. Reuters reported the news earlier.
Biden-era fuel economy and exhaust pollution regulations will also return to 2019 levels. The U.S. Environmental Protection Agency allows California to impose its own standards on tailpipe emissions, including a mandate that 100% of cars sold be electric by 2035, which will also be eliminated.
The policy options reflect a broad change in Biden’s approach to using industrial policy to combat climate change after he leaves office.
Notably, the Trump transition team is not proposing to repeal advanced manufacturing tax credits that reward domestic production of key components including electric vehicle batteries.
"The American people re-elected Trump as president by a wide margin, placing a responsibility on him to deliver on the promises he made on the campaign trail, including ending the attack on gasoline-powered vehicles," Karoline Leavitt, a spokesperson for the Trump-Vance transition team, said in an emailed statement. "President Trump will support the auto industry after taking office so that there is room for both gasoline-powered and electric vehicles to develop."