Trump rollbacks, vanishing tax credits to hammer U.S. EV sales
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Analysts are slashing estimates for U.S. EV sales in coming years as GOP lawmakers and Trump officials scuttle tax credits and emissions rules.
Why it matters: Transportation is the biggest U.S. share of CO2. And dimming sales forecasts show a market that remains tethered to fast-changing policies.
Driving the news: Today the research firm BloombergNEF estimated that EVs will be 27% of U.S. passenger vehicle sales in 2030, down from nearly 48% in last year's version of the annual look-ahead.
- Plans to roll back fuel economy and emissions rules, end the $7,500 consumer credit, cut funding for charging infrastructure, and auto import tariffs are all dragging down the outlook.
- And BNEF's outlook assumes that California's plans to phase out gas-powered car sales by 2035 — which are under threat — remain in place.
Catch up quick: It comes a month after the International Energy Agency revised its future U.S. sales estimates sharply downward.
- IEA now sees EVs with 20% of light-duty market sales in 2030.
- That's less than half of IEA's projection in the 2024 version of its annual EV report.
Friction point: Both the House and Senate GOP versions of the budget reconciliation plan mostly scuttle IRA purchase credits worth up to $7,500.
What we're watching: How Capitol Hill and White House policy changes — which also pare back manufacturing support — change the domestic supply chain buildout.
Global sales are slated to hit another record this year, with BNEF estimating 22 million passenger EVs moved, up 25% from 2024.
- China accounts for two-thirds (!) of the market, with Europe next at 17%, followed by the U.S at 7%.
- EVs, including plug-in hybrids, are slated to be one in four passenger vehicles sold this year worldwide.
Yes, but: The research firm has trimmed its short- and long-term outlook.
- That's due to the U.S. policy changes, potential nullification of California's rules, and the EU pushing back near-term vehicle CO2 targets.
- It now sees 39 million passenger EVs sold globally in 2030, compared to 42 million in last year's outlook.
Zoom in: The global market is shifting as Chinese automakers ramp up foreign sales.
- "This challenges a widely held assumption that EVs will start in wealthy countries before spreading further," it states.
- "Thailand now has higher EV adoption rates than the U.S., while Brazil is ahead of Japan."
State of play: A separate new report finds that policy and market uncertainty is starting to cool investment in U.S. battery manufacturing, and risking existing plans.
- Over $150 billion in manufacturing investments were announced between Q1 2018 and Q1 2025, Rhodium Group and MIT researchers show, fueled largely by the IRA in 2022.
- But these battery announcements slowed to a "glacial" pace last quarter, and $6 billion worth of projects were canceled from January through March.
Threat level: Lots of battery plant construction is underway even as the EV market outlook dims, "raising the possibility of stranded investments if policy and market conditions are weaker than expected," the Rhodium-MIT report finds.
The bottom line: The EV sales trend is still upward — but the U.S. landscape has completely changed.
- "Stable regulatory support still matters for EV adoption," BNEF states.
