President-elect Donald Trump’s advisers are recommending a two-pronged approach to reshaping the American auto industry: cutting federal subsidies to boost sales of electric vehicles while fostering a domestic supply chain to produce them.
Together, the suggestions highlight how Trump’s campaign promise to “end” electric vehicle mandatesIt could manifest itself in policies that prioritize domestic car manufacturers and suppliers, but without taxpayer support for consumers.
The recommendations were described as possible policy changes for the incoming Trump administration’s first 100 days in office.according to people familiar with the matter and a document seen by Bloomberg News.
Several initiatives dovetail with the wishes of conservative free-market advocates and fuel producers who have long have said that the US government should not dictate what cars Americans should drive and make.
Trump advisers encouraged relaxing environmental reviews and expediting permits for federally funded electric vehicle and infrastructure projectsincluding the development of batteries and critical minerals, according to the document and the people, who asked not to be identified because the deliberations are private.
Those projects could also potentially benefit from expanded tariffs that advisors recommend for a set of imports related to electric vehicles, including critical minerals, magnets, batteries, industrial control systems and assembly equipment.
At the same time, officials are calling for the repeal of federal policies that drive consumer demand for electric cars.including the $7,500 federal tax credit for buyers of plug-in cars, according to the document, which was previously reported by Reuters.
Biden-era fuel economy and tailpipe pollution regulations would also be rolled back and reset to 2019 levels. U.S. Environmental Protection Agency approvals allowing California to impose its own limits on tailpipe emissions, including a mandate for 100% electric vehicle sales by 2035, would also be in the crosshairs.
The policy options reflect a broader shift regarding outgoing President Joe Biden’s use of industrial policy to combat climate change. Some could also potentially benefit Tesla CEO Elon Musk, who has become one of Trump’s top advisers and is co-leading a broad effort to identify government waste.
In particular, the transition team does not recommend repealing tax credits for advanced manufacturing that reward domestic production of key components, including electric vehicle batteries.
“The American people re-elected President Trump by a resounding margin, giving him the mandate to implement the promises he made during the campaign.”including stopping attacks on gas cars,” Trump-Vance transition spokeswoman Karoline Leavitt said in an emailed statement.
“When he takes office, President Trump will support the auto industry, accommodating both gasoline cars and electric vehicles.”
Other initiatives being discussed include liberalizing regulations to “stimulate” the autonomous vehicle industry, confirming an earlier Bloomberg report. That recommendation echoes recent comments from Musk, who called for a federal approval process to facilitate the deployment of autonomous vehicles, like the robotaxi prototype that his company presented in October.
Trump is also urged to repeal a government order requiring car manufacturers and technology companies to report accidents involving the use of automated driving technologies. The requirement applies to cars made by Tesla, which account for a significant proportion of crashes reported under the order.
