In a notable moment earlier this year, President Donald Trump and Tesla’s Elon Musk showcased electric vehicles at the White House, temporarily turning the president into a promoter of the eco-friendly cars. Read more here.
Now, months later, the dynamic between Musk and Trump has shifted. Their once friendly terms have cooled, the red Tesla that Trump acquired is no longer at the White House, and the president has enacted legislation known as the One Big Beautiful Bill, which effectively removes federal backing for electric vehicles. Explore the details here.
Despite the policy shift, electric car sales are seeing an upswing. JD Power anticipates electric vehicles will make up a record 12.8% of all US vehicle sales in August, a notable increase from 9.6% the previous year. As Tyson Jominy, senior VP of data and analytics at JD Power, notes, “There’s a rush.”
This surge is largely driven by the impending expiration of the $7,500 EV tax credit, set to conclude at the end of September following the signing of the OBBB. Buyers are hurrying to benefit from the incentive while it lasts.
The IRS recently clarified that as long as buyers sign contracts and make payments on their EVs before October, they can still qualify for the credit without immediate vehicle delivery.
Yet, this increase in sales may be temporary. Analysts predict a potential decline in US EV sales post-September. Jominy adds, “It’s very likely that we’ll see the ‘payback effect’ at the end of this year, and maybe into 2026,” indicating a probable slowdown in EV sales.
The extent of this downturn will largely depend on auto manufacturers and dealers. They may choose to maintain low prices or continue offering aggressive sales incentives to keep buyers interested.
Manufacturers are also dealing with auto tariffs, which impact even domestic automakers who produce affordable cars in Mexico and Canada and face import tariffs of 25%. Read more here.
The absence of federal support raises questions about the future of the US transition to electric vehicles. However, industry experts remain optimistic. Mark Schirmer, director of industry insights at Cox Automotive, asserts, “EVs are simply better vehicles.” As electric cars with advanced batteries, extended ranges, and improved charging times become more affordable and charging infrastructure expands, more Americans are expected to make the switch.
Nevertheless, the US trails globally in EV adoption. The International Energy Agency projects that EVs will constitute over 25% of new global car sales this year, while in the US, the figure lags at around 8%. With international competition heating up, especially from China, US automakers face the challenge of remaining competitive globally while addressing the slower domestic market. Learn more here.
Sean Tucker, lead editor for Kelley Blue Book, highlights the stakes: “The threat is really to US automakers’ international competitiveness. They have to catch up with the Chinese EVs, or they could become an island.”
Original Story at www.wired.com