Still, many auto experts say market forces and technological progress will ultimately drive a long-term transition to electric vehicles regardless of how far Republicans go in undoing President Joe Biden's climate agenda.To a large extent, the electric vehicle market in the United States runs on Democratic policies. There are federal tax credits for car buyers. Subsidies for battery manufacturing. Cheap loans to build electric car factories. Grants for chargers. Regulations that push automakers to sell more vehicles with no tailpipe emissions.
All of that support - amounting to hundreds of billions of dollars - could go away soon after the inauguration of President-elect Donald Trump, despite his close association with Elon Musk, CEO of the electric carmaker Tesla.
Trump and Republicans in Congress say they plan to eliminate most of the federal aid for electric cars and trucks and reverse emissions rules, raising doubts about the future of such vehicles and the billions of dollars that automakers have invested to design and build them.
Still, many auto experts say market forces and technological progress will ultimately drive a long-term transition to electric vehicles regardless of how far Republicans go in undoing President Joe Biden's climate agenda.
Prices of batteries, the most expensive part of an electric vehicle, are falling fast. Already, many electric cars cost no more to own than comparable gasoline models when savings on fuel and maintenance are taken into account.
Technology is improving rapidly. Batteries are becoming lighter and smaller while allowing faster charging and longer travel distances. And more than 12,000 high-voltage public chargers were added in the United States in 2024, a 33% increase from 2023, according to Rho Motion, a research firm.
Automakers have a strong financial interest in promoting electric vehicles no matter who is in the White House. They need to earn a return on the investments they have made in production facilities. And failing to keep up with the technology could make them vulnerable to emerging Chinese competitors that are all-in on electric vehicles.
"No matter what policy changes are brought forward by the new administration we will abide by them and will adjust accordingly," Randy Parker, CEO of Hyundai Motor America, told reporters during a recent conference call.
"Make no mistake about it," he added, "we're committed to electrification."
Hyundai recently began producing its popular Ioniq 5 car at a new USD 7.6 billion factory near Savannah, Georgia. That car and a large electric SUV are the first from the South Korean automaker that will qualify for a USD 7,500 federal tax credit. The factory complex, which will employ 8,500 people including at Hyundai's suppliers once it reaches capacity, is one of the biggest examples of the jobs and investment that electric vehicles have generated.
There's little doubt that sales of cars powered by batteries, which generally cost more upfront than comparable gasoline cars, will take a hit if Republicans repeal the Inflation Reduction Act, the legislation that includes the USD 7,500 credit and subsidies for battery manufacturing, charger installation and electric school buses.
Rep. Mike Johnson, R-La., a large producer of oil and gas, repeated the threat after winning reelection as House speaker this month. "We're going to save the jobs of our auto manufacturers, and we're going to do that by ending the ridiculous EV mandates," he said.
Analysts note that sales of electric vehicles in Germany plunged 27% last year after the country's government slashed incentives for car buyers.
"If the incentives go away, that's definitely going to impact sales," said Stephanie Valdez Streaty, director of industry insights at Cox Automotive.
On average, an electric car in the United States sold for USD 55,105 in 2024, compared with USD 48,165 for a gasoline car, according to Cox.
But the price gap is half what it was two years ago. Several more affordable models are arriving this year, and many analysts expect electric vehicles to cost the same or less than combustion engine cars by the end of the decade.
General Motors sells an electric Chevrolet Equinox for around USD 35,000 and plans to revive the Chevrolet Bolt this year at a lower price. Later this year, Honda will begin producing electric cars in Ohio. The Japanese company has not announced a price but is known for affordable vehicles.
Tesla has said it will begin selling a less expensive vehicle by the middle of the year but has provided few details. Later this year, Volvo plans to begin selling a version of its EX30 that is expected to cost less than USD 37,000.
"We are going to be able to drive the cost of EVs to lower than internal combustion engine vehicles," said Kurt Kelty, a GM vice president in charge of batteries. "That's what we're aiming for."
Many states, including Colorado, New York and Washington, provide subsidies for electric vehicles that will remain in place. California's governor, Gavin Newsom, has said the state will revive its incentives if federal tax credits are repealed.
Only a small number of cars qualify for the federal tax credit for buyers in any case. The Inflation Reduction Act limited eligibility for the tax credits to vehicles that have a certain percentage of components made either in the United States or by its trade allies. The requirements become more stringent every year, forcing some vehicles off the list. As of January 1, several models, including the Volkswagen ID.4 and Ford Mustang Mach-E, are no longer eligible.
Republicans are also expected to take aim at a provision that allows leasing companies to collect the USD 7,500 credit for all battery-powered cars regardless of where they are made. Leasing companies typically pass the savings on to customers.
Elimination of the credits would reduce electric car sales by more than 300,000 vehicles a year, equivalent to about three months of sales in 2024, according to a study published in October by professors from Stanford University; the University of Chicago; the University of California, Berkeley; and Duke University.
It's not a given that Republicans will repeal every Democratic electric vehicle policy, because many of them have supported new factories in states like Tennessee, Kentucky and South Carolina. Republicans would be killing jobs in their own strongholds. Trump's inner circle includes Musk, whose electric car company, Tesla, accounts for almost half of the electric vehicles sold in the United States and benefits from the credits. Musk has backed the repeal of electric car subsidies, but it is not clear how he will use his influence once Trump is president. Tesla did not respond to a request for comment.
Trump's campaign promises included "stopping attacks on gas-powered cars," Karoline Leavitt, a spokesperson for the president-elect's transition, said in an email. She suggested that he would have a more balanced approach. "President Trump will support the auto industry," she said, "allowing space for both gas-powered cars AND electric vehicles."
