U.S. President-elect Donald Trump is not yet in office, but already the decisions he intends to make upon taking office are causing a stir. A number of players in the automotive sector are worried.
There’s of course the threatened 25-percent tariff on all products from Canada and Mexico, which would be catastrophic for the automotive industry on both sides of the border. That’s all still in the future and far from certain, so time will tell.
In the here and now, though, a group of 42 automakers published a joint letter urging President Trump not to remove existing tax incentives for electric vehicles, as well as emissions regulations.
In the letter, dated November 12 and also sent directly to Trump, the group outlines its positions on a range of automotive policies such as automated driving and road safety, as reported by the New York Times. The title of the letter is revealing: Automakers to Trump: Please Require Us to Sell Electric Vehicles.
The letter is from the Alliance for Automotive Innovation, the members of which account for the vast majority of new vehicle sales in the US each year. The letter was signed by Alliance President John Bozzella
Ford, General Motors (GM) and Stellantis, all members of the organization, declined to comment further, explaining that everything is in the letter. A Stellantis representative did, state the following to Car and Driver:
“The New York Times story characterizing Stellantis as preparing to lobby the incoming Trump Administration to preserve EV mandates is not accurate. Stellantis was not among the 'lobbyists and officials from several car companies' the story cites as its sources. In fact, Stellantis's CEO has repeatedly said that the company is uniquely well positioned to adapt to any policy changes President-elect Trump might make because its multi-energy platforms can easily flex to accommodate a wide range of powertrain options from internal combustion to full battery-electric.”
Interesting jockeying for position on the part of the auto giant, that.
The Alliance’s letter states that the automotive industry can only succeed if it benefits from “stability and predictability in automotive-related emissions standards”. The problem for automakers is that many have already invested billions in electric vehicle research and development, and may fear competition from subsidized alternatives to internal combustion engines.
It’s understandable for automakers to be worked up here. They plan their activities years or even a decade in advance. Sudden policy changes are a real problem and threaten their financial situation. Designers and engineers are already working on models that probably won't be introduced to the public until 2028 or later, and they're all being designed with current regulations in mind.
Stephanie Brinley, an analyst with S&P Global Mobility's Auto Intelligence department, told the New York Times that “The worst thing for manufacturers, even worse than difficult regulations, is to go back and forth every four years.” That sums it up.
Car and Driver points out that in addition to concerns about emissions regulations, the Alliance letter shows that many automakers are also worried about losing the $7,500 tax credit granted under the Inflation Reduction Act.
A lot is going to happen between now and January 20, when the 47th American president takes office. And what happens after that? Anyone’s guess.