What will happen to the automotive industry under the new Trump presidency?

Donald Trump is threatening Europe with import taxes and, at the same time, cancelling the targets set for electric vehicles.

Donald Trump

Photo by: Flickr

By: Riccardo Ciriaco

Published by: Brian Potter

Jan 22, 2025 at 7:31am ET

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Just enough time to digest the sumptuous inauguration lunch on Capitol Hill. Then US President Donald Trump, reinstated to office, attacked the outgoing Biden administration's policies on electric cars and vehicle imports from abroad, particularly Europe.

Eliminating the "electric vehicle mandate" and promoting "real consumer choice" was one of the executive orders issued by the White House on Inauguration Day.

It refers to the - non-binding - target of increasing electric car sales to 50% of the market by 2030, set by the former tenant of the Oval Office. For the time being, this target will remain a dead letter. Also in the magnate's sights are incentives (up to 7,500 dollars) for the purchase of battery-powered cars and bonuses for the installation of charging stations.

"All agencies must immediately suspend payment of funds allocated under the Inflation Reduction Act of 2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act (Public Law 117-58), including but not limited to funds for electric vehicle charging stations", the text continues.

What's happening in Europe:

Europe is ready for dialogue with the automotive world

Electric vehicles are growing worldwide, except in Europe

A move against Europe

Once the national tasks have been accomplished, the President is looking beyond the borders. "We are going to build cars in the United States at a rate that no one could have dreamed of a few years ago. We will immediately begin to reform the trade system to protect American workers and families instead of taxing our citizens to enrich other countries."

"There will be tariffs on foreign states and, for that reason, we will institute a foreign tax system. Very large sums will come into our treasury. The American dream will be born again".

Mercedes GLA 250 and plug-in hybrid (2025) - Road test

German premium cars had already been in Trump's sights in the past

Photo by: Motor1.com

Trump does not specify, but the "other countries" also include European countries, against which the president had already pointed the finger during his first term, fearing duties of 25%, i.e. ten times the current tax of 2.5%. At the time, nothing was done, but now that Europe and the United States themselves are closing in on the potential Chinese invasion, all we can do is wait for the official word. What is certain at this stage is confirmation of the other taxes, the 100% taxes in force on electric cars manufactured in China.

And what about Tesla?

The question is how to reconcile all these initiatives with working with Elon Musk, CEO of the world's largest battery-powered car manufacturer. There are two aspects to consider. The first is that Tesla remains a very strong brand and will probably survive even without regulatory pressure. In fact, the pressure could even benefit the company, which has a head start on its competitors, who are now in danger of losing ground for good.

The Tesla Cybercab seen live

Il robotaxi Tesla Cybercab

Photos by: Motor1.com

The Tesla Cybercab seen live

The interior, without steering wheel and pedals

The second concerns the plans of Elon Musk and co. For some time now, the electric car has been losing its centrality in the manufacturer's strategies, as it focuses more on robotics and autonomous driving.

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The latter, according to the Bloomberg press agency, will be the focus of an ad hoc bill promised by the tycoon to the supermanager. The bill will extend the scope of application to vehicles such as the Cybercab robotaxi. As a result, the Tesla boss will also win Trump's re-election. Meanwhile, Europe is trembling, with just one hope: the good offices of Italian Prime Minister Giorgia Meloni.

The latter, according to the news agency Bloomberg, will be the subject of a special law promised by the tycoon to the supermanager. The text will extend the net to the circulation of vehicles such as the Cybercab robot taxi. Tesla's boss will therefore also benefit from Trump's re-election. Meanwhile, Europe is trembling, with only one hope: the good efforts of Italian Prime Minister Giorgia Meloni.

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