Auto industry's shift toward EVs is expected to go on despite Trump threat to kill tax credits

Auto industry's shift toward EVs is expected to go on despite Trump threat to kill tax credits | CBC News LoadedAuto industry's shift toward EVs is expected to go on despite Trump threat to kill tax credits

His transition team is reportedly working on plans to abolish the tax credits and to roll back the more stringent fuel-economy rules that were pushed through by the Biden administration.Trump's argument - one that most economists dispute - is that a rapid U.S. shift toward electric vehicles would lead to most EVs being made in China and would swell prices for America's auto buyers.

The credits reduce monthly payments, he noted, making an EV closer in price to a gasoline counterpart. On average, electric vehicles sell for about $57,000, compared with around $48,000 for a gasoline vehicle, according to Cox Automotive. EVs that contain battery parts or minerals from China or any other nation that is deemed an economic or security threat to the United States qualify for only half the federal credit.

Musk, the billionaire CEO of Tesla who spent an estimated $200 million to help elect Trump, has said that ending the credits would hurt his rival companies more than it would Tesla, the U.S. sales leader in EVs by far.EV sales have slowed. Do massive subsidies still make sense? John Helveston, an assistant professor at George Washington University who studies electric vehicles and policies, said that in his view, the impoundment theory wouldn't apply in this circumstance because the EV tax credits affect government revenue and are not an appropriation.

It's also helping Detroit's Big Three compete with foreign rivals, notably Chinese automakers that received government subsidies and had a head start in developing EVs, said Sam Fiorani, a vice president at the consultancy AutoForecast Solutions.At present, Ford and GM, while profitable overall, are losing money on EVs, unlike Tesla, though both expect their electric-vehicle operations to generate positive earnings in the coming years as costs ease and more vehicles are sold.

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