Speaking at his inauguration ceremony, President Trump mentioned that the new White House administration will put an end to the "EV mandate," just as previously rumored.
When he later signed the "Unleashing American Energy" executive order, the wording made clear that this could mean an immediate cessation of the EV tax credit disbursements as stipulated in Biden's Inflation Reduction Act (IRA).
Trump's executive order talks about removing the EV mandate as a concept of leveling the playing field for electric and gas-powered vehicles alike. In Section 2 of the "Unleashing American Energy" executive order, it stipulates the energy policies that should be followed by the US government agencies from now on, including a subsection referring to electric vehicles:
To eliminate the "electric vehicle (EV) mandate" and promote true consumer choice, which is essential for economic growth and innovation, by removing regulatory barriers to motor vehicle access; by ensuring a level regulatory playing field for consumer choice in vehicles; by terminating, where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles; and by considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable.
By only saying that said agencies should "consider" putting an end to electric vehicle subsidies, it seems that the current tax credit program could remain in place until further notice. In Section 7 titled "Terminating the Green New Deal," however, Trump's executive order makes it clear that "all agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act... including but not limited to funds for electric vehicle charging stations."
It then gives agency heads 90 days to review the IRA program and make recommendations whether they align with the Trump administration's new energy policies, or whether they should be on the chopping block. "No funds identified in this subsection shall be disbursed by a given agency until the Director of OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review recommendations they have chosen to adopt," reiterates the order.
Since the IRA is signed into law, it can't be simply repealed with an executive order, so any and all changes could still have to be voted on, but the request for an immediate freezing of IRA-related payments could be an ominous sign for Tesla and other EV makers.
The 2025 Model Y orders in the US are expected to open this week, for instance, but even if Tesla honors the tax credit rebate for early adopters of the facelift, Tesla might simply have no access to the reimbursement funds, so it will have to decide whether it wants to eat the difference.
The 2025 Model Y Juniper release date in the US could come in March, just like in China or Europe. By the time those who intend to grab one after the first Juniper refresh reviews are out testing its official EPA range estimates, the tax credit may be gone altogether.
The Trump administration is also removing the electric vehicle charging infrastructure subsidies, which could be another blow to the speed of EV adoption in the US. The executive order does diminish the obstacles before mining and refining material that goes into EV batteries in the US, though, so Tesla might still get subsidies for its lithium refinery or 4680 battery that is likely to go into the Model Y Juniper stateside.
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