Newly elected US President Donald Trump will reportedly withdraw the country’s electric vehicle (EV) subsidies if he comes to power next year, sparking fears about the rise of battery-powered models in the region.
Press agency Reuters reports reports from insiders close to Mr Trump that the federal tax credit for electric vehicles, which could be worth as much as US$7,500 (US$11,625), will be phased out in early 2025, just over two years after the last version of the subsidy was introduced by current President Joe Biden.
Currently, the incentive is available for electric cars built in North America and below certain price points – US$55,000 (US$85,250) for passenger cars and US$80,000 (US$124,000) for pickups and SUVs – with only 16 models eligible. the full amount. .
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Electric vehicles have been a major target during Trump’s election campaign, with the new president falsely claiming that the US government has mandates requiring electric vehicle (EV) sales to reach 100 percent. He promised to withdraw it if elected.
While the U.S. Environmental Protection Agency (EPA) has set a goal for electric vehicles to account for 35 to 56 percent of new vehicle market sales by 2032, this is not an enforcement or mandate, but rather an outline of what automakers are going to do. doing. need to do to comply with wider emissions regulations for their fleet.
This EPA target was previously as high as 67 percent before it was rolled back in April of this year, due to electric vehicle cooling demand.
Trump’s criticism of electric vehicles and push to scrap sales targets and incentives came despite heavy support from Tesla CEO Elon Musk, who has since been appointed co-head of the new Department of Government Efficiency.
Tesla is the largest EV manufacturer in the world. Although it faces increasing competition from China globally, it is by far the most popular in the US, accounting for more than half of the market for battery-powered cars, SUVs and pickups.
Mr Musk has previously said the potential removal of the tax incentive would “probably benefit Tesla” in the long run, although its removal could delay the rollout of electric vehicles in the US.
According to Cox AutomobileUS electric vehicle sales grew 11 percent in the third quarter of 2024 (July to September) compared to the same period last year.
While the number of EV sales is increasing, the percentage has decreased compared to last year. In the third quarter of 2023, the EV market grew by almost 50 percent compared to the same three months in 2022.
Speak with ReutersMike Murphy, head of the EV Politics Project advocacy group, said eliminating the subsidy would “leave Tesla in first place, and everyone else in second place” and would be “really bad for America’s automakers” .
“The Trump administration is proving that they have absolutely no interest in helping the American auto industry survive the coming Chinese invasion,” Murphy said.
In May, the Biden administration announced a 100 percent tariff on Chinese electric cars, impacting a small number of models currently on sale but also acting as a deterrent for brands looking to enter the U.S. market.
Trump has also pledged to impose tariffs of up to 200 percent on vehicles made in Mexico, which would impact Chinese brands such as BYD, which were believed to be looking to open factories south of the border to ease restrictions out of the Biden administration. bypass era.
The Australian government does not offer direct subsidies for electric cars here, but does offer an exemption from the Fringe Benefits Tax (FBT) for electric cars (and plug-in hybrids) that fall below the Luxury Car Tax (LCT) threshold.
At a state or territory level, only the Australian Capital Territory, Western Australia and Northern Territory still have incentives to encourage EV updates, after plans were finalized in New South Wales, Victoria, Queensland, South Australia and Tasmania.
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