Why EVs could get a Trump bump — for now
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Donald Trump's looming move back into the White House could boost EV sales to buyers worried he'll end subsidies after taking office.
The big picture: "EV interest will likely increase over the next few months," Edmunds analyst Jessica Caldwell said via email.
- "President Trump has been vocal about potentially eliminating EV tax credits, so his victory could kick fence-sitters into action, particularly lessees," she said.
Friction point: Trump bashed federal EV support on the stump and his victory could blunt the tech's long-term U.S. growth.
- He'll likely work with Capitol Hill Republicans to try to nix the credits in next year's debate over expiring tax cuts from his first term.
- But some GOP lawmakers with EV manufacturing in their districts could resist, my Axios Pro colleagues report.
- Even without Congress, Trump's Treasury Department could change implementing rules to make tapping the credits harder.
State of play: EVs are eligible for up to $7,500 in credits if they meet battery sourcing and domestic assembly rules in the 2022 climate law.
- Used EVs get credits up to $4,000.
- Leased EVs don't face the same restrictions, which broadens the pool of models available. Buyer income limits don't apply, either.
What they're saying: "If there's concern the incentives will go away under Trump, I could see electric vehicle shoppers moving their purchase forward," iSeeCars.com executive analyst Karl Brauer said via email.
- Recent history offers a lesson, he said. Before the IRA, the $7,500 credits were capped at 200,000 vehicles per automaker before losing value.
- Brauer notes Tesla sales got a bump around six years ago when the company was about to hit the cap.
What we're watching: Future sales and leasing data.
- Fully electric models reached 9% of U.S. car sales in September, a new high, per Cox Automotive data.
- Caldwell, the Edmunds analyst, said it's investigating whether there's been increased EV shopping on its site since the election.
- But with adoption rising already, it will be tough to parse how many sales are rooted in fear of vanishing incentives.
"We would need to survey buyers on motivating factors. It could be the fact that EV discounts right now are through the roof," Cox spokesman Mark Schirmer said in an email.
The intrigue: The jeopardy hasn't stopped the bromance between Trump and Tesla CEO Elon Musk, whose firm is the U.S. market leader.
- Tesla would be better positioned than other automakers if subsidies die, analysts say. Musk has made the same point.
The bottom line: "If there's increased electric vehicle buying activity ahead of a real, or perceived, loss of the incentive, sales will likely fall disproportionately in the following weeks or months," Brauer notes.
- "This pattern will be more pronounced if the incentives really do go away."
