Production is now set to begin at the former Detroit-Hamtramck assembly plant, less than two years after GM announced a massive $2.2 billion investment to completely renovate the plant to build a variety of all-electric trucks and SUVs.
Photo by Jeffrey Sauger for General Motors
DETROIT – President-elect Donald Trump's victory over Vice President Kamala Harris is likely to plunge the U.S. electric vehicle industry into a period of uncertainty.
Republicans, led by the former president, have widely condemned electric vehicles, saying they are being forced on consumers. Trump has vowed to roll back or eliminate many vehicle emissions standards under the Environmental Protection Agency, as well as create incentives to encourage production and adoption of the vehicles, such as the Biden administration's Inflation Reduction Act of 2022.
Auto industry insiders and other officials said it would be difficult for Trump to completely gut the IRA, but he could eliminate or limit electric vehicle subsidies through regulations or other policies.
Several people said they expected Trump to target federal consumer loans, which currently offer up to $7,500 for the purchase of an electric vehicle, rather than industrial production loans for businesses.
“The IRA will probably see some adjustments… I don't think the IRA will go away,” David Rubenstein, co-founder and co-chair of The Carlyle Group investment firm, told CNBC on Wednesday. “It has some really good things in it that I think Republicans and Democrats will like.”
Many of the investments in electric vehicle production under the IRA were made in Republican states such as Ohio, South Carolina and Georgia.
Winners and losers?
Several Wall Street analysts have speculated on legacy automakers – particularly the “Detroit” companies General Motors, Ford engine and Chrysler mother Stellar — would be the biggest winners of a second Trump term and Republican control of Congress.
“We see F and GM as the primary beneficiaries of the Trump administration,” BofA Securities analyst John Murphy said in an investor note Wednesday. “The current environmental regime would put the core business of contaminated sites under pressure [automakers, trucks,] decarbonize by the end of the decade while quickly transitioning to an EV portfolio.”
GM's aspirations for an “all-electric future” and a profitable EV business in the near term rely heavily on federal tax credits.
Analysts had pointed to EV startups such as: Rivian Automotive And Lucid Group would benefit more from a Democratic victory.
Shares of GM and Ford rose in trading on Wednesday, while Stellantis, which is facing significant problems in the U.S., fell slightly. Lucid and Rivian were down 8% and 10%, respectively.
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Automaker stocks following President-elect Donald Trump's victory.
One outlier is the US market leader for electric vehicles Tesla. CEO Elon Musk campaigned hard for Trump in swing states, who have discussed making the billionaire the czar of government efficiency.
Shares of Tesla rose 13%, previously hitting a new 52-week high.
“We see RIVN and LCID challenged, which is largely reflected in the shares,” Murphy said. “We do not expect any significant issues for TSLA as the company has already achieved profitability and will continue to introduce more entry-level products that may be attractive to the general public.”
Several automakers did not immediately respond to requests for comment after NBC News and several other media outlets called the election for Trump.
In a statement Wednesday, Ford congratulated Trump and newly elected officials at all levels of government: “We look forward to working with the new administration and Congress on policies that strengthen the U.S. automotive industry, which supports 9.7 million American jobs and drives more.” more than $1 trillion into the economy every year.”
California EV regulations
Trump is also expected to resume the fight with California and other states that are setting their own vehicle emissions standards, including requirements for the sale of all-electric vehicles.
The current requirements of the 2022 Advanced Clean Cars II regulation require 35% of model year 2026 vehicles, which begin rolling out next year, to be zero-emission vehicles. Battery-electric vehicles, fuel cell vehicles and, in some cases, plug-in hybrid electric vehicles are considered emission-free.
Before the election, auto officials said many automakers would push for a shift in mandates regardless of who won the White House.
The California Air Resources Board reports that twelve states and Washington, DC have adopted the rules; However, about half of them did so starting with the 2027 model year. They are part of CARB's Advanced Clean Cars regulations, which require that 100% of new car sales in the state of California be zero-emission models by 2035.
As of this year, electric vehicles accounted for 10% or more of local market share in just 11 states and the District of Columbia, according to the Alliance for Automotive Innovation, a trade association and lobbying group that represents most major automakers operating in the United States
Auto executives and industry experts also expect Trump could roll back or freeze Corporate Average Fuel Economy (CAFE) standards for the 2027-2031 model years.
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