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Automakers and even some Republicans may fight to preserve funds, and environmental activists will likely sue, but some experts said that some changes may not survive legal challenges.
Jan. 21, 2025, 12:22 p.m. ET
If President Trump has his way, the auto industry’s transition to electric vehicles will soon slam into reverse. He will erase tax credits for electric vehicle purchases, federal grants for chargers, and subsidies and loans to help retool assembly lines and build battery factories.
Executive orders issued by Mr. Trump on Inauguration Day amount to a sweeping repudiation of a centerpiece of former President Joseph R. Biden Jr.’s multibillion dollar program to address climate change, which Republicans cast as a campaign to ban gasoline cars.
The orders also present a challenge to automakers that have invested billions of dollars in electric vehicles, in part because the Biden administration encouraged them to. But some of the orders appear to bypass Congress or federal rule-making procedures, which could make them vulnerable to lawsuits and even resistance from within the Republican Party.
While framed as a way to revive the American auto industry, the orders could cause U.S. carmakers to fall behind if they scale back their electric vehicle programs while Asian and European automakers continue perfecting the technology, analysts say. Already, 50 percent of car sales in China are electric or plug-in hybrids, and Chinese automakers like BYD are selling more cars around the world, taking customers away from established car companies, including American manufacturers.
An executive order entitled “Unleashing American Energy” and signed by the president on Monday instructs federal agencies to immediately pause disbursement of funds allocated by Congress that were part of the Biden effort to push the auto industry toward vehicles with no tailpipe emissions.
Among other things, the funds helped states to install fast chargers along major highways and provided tax credits of up to $7,500 for buyers of new electric vehicles and $4,000 to buyers of used models. The credits effectively made the cost of buying some electric cars roughly on par with prices for cars with gasoline or diesel engines.
