In the early days of his presidency, Donald Trump signed executive orders targeting an “electric vehicle mandate” he claims was instituted under his predecessor’s administration.
With the stroke of a pen, Trump promised to roll back aspirational carbon emission regulations aiming to incentivize domestic EV production and detailed policy changes he wants to push through Congress, such as paring back $7,500 tax credits for buyers of plug-in cars. Trump and his allies argue the Democratic-backed federal policies threaten gasoline vehicles, arguing repealing the federal programs will create a “level regulatory playing field.”
Trump’s actions so far are more bombast than substance — federal incentives supporting EVs remain law, for now. But experts say the administration’s moves could worsen politicization around the technology.
With a global race to dominate the clean energy transition well underway, experts say Trump’s moves could put the U.S. at a disadvantage, and leave Georgia caught in the crossfire.
A federal reversal threatens tens of thousands of promised electric vehicle jobs nationwide and risks leaving businesses with tens of billions of dollars in sunk costs tied to the EV transition, experts say.
“We can’t keep flip-flopping from one administration to another and change our strategic investments that we’ve made in billions and billions of dollars,” said Kevin Ketels, a Wayne State University professor who specializes in global logistics. “There is a race right now to create electric vehicles.”
Georgia has emerged as a leader in the electrification of auto travel, attracting multibillion-dollar EV manufacturing plants, battery factories and many projects across their supply chains. Many of those investments have been championed by Georgia Republicans as the nexus for the state’s industrial future.
The policies Trump aims to unplug focus on providing extra juice for EV companies and makers to accelerate their U.S. investments, including the projects that have gravitated to Georgia and promise to create tens of thousands of jobs. Experts say the whiplash in federal support likely won’t change the global direction of electrifying transportation and other sectors, but it could surrender ground to the America’s international rivals, such as China.
“The risk is ceding more territory to global competitors who are, at times, global adversaries,” said Albert Gore, executive director of the EV industry trade group Zero Emission Transportation Association.
Georgia Republican leaders, including Gov. Brian Kemp, have said supporting a domestic EV and battery sector is a matter of national security, attempting to prevent China from monopolizing those industries. Kemp’s office did not respond to a request for comment.
Credit: John Bazemore/AP
Credit: John Bazemore/AP
While Georgia is set to benefit from that EV push, Kemp and other state leaders said they support Trump’s move to rollback much of the future federal support for these industries, arguing they distort the free market.
“When the government picks winners and losers, consumers lose every single time,” said U.S. Rep. Buddy Carter, R-St. Simons Island, whose district includes Hyundai Motor Group’s newly opened $7.6 billion EV factory. “I’m proud that President Trump rescinded the electric vehicle mandate so that Georgians — not federal bureaucrats — can choose the best car for them.”
Support vs. mandate
Kathy Harris, director of clean vehicles at the nonprofit Natural Resources Defense Council, argues no “EV mandate” exists.
Most auto manufacturers still produce gas-powered models, and consumers can choose between buying and driving an internal combustion vehicle or an electric one. Former President Joe Biden’s administration finalized stiffer tailpipe emissions standards, which may require most manufacturers to offer mostly EVs by the early 2030s.
Harris said it appears the tailpipe regulations are among the rules the Trump administration wants to ax, but doing so will require the Environmental Protection Agency to complete a lengthy rulemaking process that could take years.
Then there are the tax incentives for customers to buy EVs and for companies to build them in the U.S. Those were created by the Inflation Reduction Act, Biden’s signature health and climate law.
Credit: AP
Credit: AP
Based on Trump’s campaign rhetoric and the executive orders, Harris said it appears those are also among the targets the administration will try to eliminate. But because they were signed into law, doing so would require Congress to pass a new law.
“On the tax credits, that’s the law of the land right now and that would take congressional action,” Harris said.
The Alliance for Automotive Innovation, a trade group representing nearly all major automakers besides Tesla, said Trump’s promised rollback addresses “a mismatch between current EV market dynamics and the emissions and EV sales targets called for in recent regulations.”
“There’s a saying in the auto business: you can’t get ahead of the customer,” John Bozzella, the organization’s president and CEO, said. “We can’t have regulations that push the industry too far ahead of the customer.”
Still, any rollbacks of emissions standards or EV incentives the administration is able to execute would have global implications for the fight to curb climate change, Harris said. The U.S. transportation sector is responsible for 28% of the economy’s overall carbon pollution, more than any other part of the economy according to federal data from 2022, the most recent full year available.
According to the EPA, the lifetime emissions of EVs are lower than those of gas-powered vehicles, and all-electric models don’t produce any tailpipe pollution once on the road.
Credit: AP
Credit: AP
Harris said the IRA has created thousands of jobs in states like Georgia, reduced emissions and led to cleaner air.
“These regulations and laws have really provided significant benefits so far, and it would be really disappointing to see them rolled back,” she said.
‘A long game’
Hyundai Motor Group, the Korean automotive giant, has made huge investments in U.S. manufacturing in recent years, including the largest economic development project in Georgia history. The company’s $7.6 billion electric vehicle factory near Savannah, which it calls a Metaplant, began pumping out EVs in October.
Though the factory was announced before the IRA was introduced, Hyundai is poised to benefit from many of its provisions. But Jose Munoz, Hyundai’s top North American chief executive, previously said the company is “not planning our business based on tax credits,” which the company echoed in a statement after Trump signed his executive orders.
Credit: Hyundai Motor Group Metaplant America
Credit: Hyundai Motor Group Metaplant America
“Hyundai remains focused on electrification in the U.S. because it is where we see significant opportunity for long-term growth,” the company’s statement said. “But we are also meeting consumers where they are, offering internal combustion engines, hybrids, and plug-in hybrids alongside our EV lineup.”
Rivian, an EV startup promising to build a $5 billion factory in Georgia, didn’t respond to requests for comment. The automaker recently received final approval from the Biden administration for a $6.6 billion loan to ensure the stalled plant is built.
Federal loans also came under attack by Trump’s administration, causing confusion since Trump’s inauguration on what would be impacted. The White House on Wednesday reversed at least in part a directive to freeze trillions in federal loans and grants, a day after a federal judge put the sweeping spending edicts on pause.
But a White House spokeswoman the same day said Trump’s orders targeting federal spending in areas like diversity, equity and inclusion and climate change remain in effect.
Credit: Courtesy Rivian
Credit: Courtesy Rivian
Trump’s allies have taken aim at the Rivian loan for its 11th-hour approval, though the company applied more than two years ago.
Gore said it’s vital for companies and investors to have confidence their regulatory environment, loan commitments and incentives won’t be altered, especially when making massive investments like a manufacturing plant.
“In a state like Georgia, there’s a solid understanding of the importance of regulatory and policy certainty behind these investments,” he said. “In general, businesses that have made investments in reliance on policy should be able to count on that without the road from being pulled out from under them.”
It’s a point Kemp made last year when he vetoed legislation that would have suspended sales tax breaks on equipment in new data centers, which have sprouted across metro Atlanta. State and local leaders have also offered gigantic incentive packages to companies like Hyundai and Rivian to support their projects.
Ketels said rolling back federal support could slow down EV projects, including those Georgia, but electrification plans are too important to automakers’ futures for them to pull the plug entirely.
“They’re not going to bounce around like the ball in a pinball machine, going from one strategic direction to another,” Ketels said of automakers. “They’ll tweak and make adjustments, but this is a long game to them, and they’re making long-term investments of billions and billions of dollars.”
Cox Enterprises, the owner of The Atlanta Journal-Constitution, also owns a 3% stake in Rivian.
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