The recently unveiled Republican Party Platform includes as one of its twenty “promises” the commitment to “CANCEL THE ELECTRIC VEHICLE MANDATE AND CUT COSTLY AND BURDENSOME REGULATIONS.” This has raised the question of why Elon Musk, whose electric vehicle company Tesla benefits from the Inflation Reduction Act’s EV subsidies, would endorse former President Trump and make such a large (USD 45 million per month for the next four months) financial commitment to a pro-Trump Super
Pac.
- The EV mandate to which the platform refers, and the IRA’s EV subsidies, are two different things.
President Biden’s EV mandate, which faces stiff opposition from most Republican lawmakers, is an administration regulation that increasingly, between 2027 and 2032, limits the amount of pollution from tailpipe emissions. The regulation is not a ban on gas-powered vehicles and does not explicitly require the sale of electric vehicles. Rather, by imposing an across-the-board emissions reduction on carmakers, the regulation effectively forces vehicle producers to either reduce emissions from gas-powered vehicles or sell more EVs.
- This administration is sure to be challenged in court, especially in the aftermath of the recent Supreme Court decision which overturned the Chevron case and has the potential to significantly curtail agencies’ ability to promulgate regulations.
- Regardless of legal challenges, a second Trump administration will almost certainly seek to quickly cancel this regulation.
- Attacking “Biden’s EV mandate” is a popular GOP talking point, hence its inclusion in the party platform.
The IRA’s electric vehicle tax credits, on the other hand, provide incentives for the purchase of EVs (with qualifying requirements, both on the vehicle and the purchaser). The law requires that battery component manufacturing and assembly be increasingly carried out in North America, and that EV battery critical minerals are increasingly sourced from the US or key
allies.
- This law and its interpretation through agency regulations benefit Musk and other US producers of electric vehicles, and we assess a Trump administration would not seek to “cancel” these tax credits.
|
Ambassador (ret) Lew Lukens
Senior Partner, CEO of UK/Europe | Signum Global
+44(0)7444 460614
Signum Global Advisors is a policy and strategy firm with offices in New York, London, Washington and Dubai. |
 |
This material is prepared by SIGNUM GLOBAL ADVISORS and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date on the front page, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by SIGNUM to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of
negligence) is accepted by SIGNUM, its officers, employees or agents.
This material may contain 'forward-looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any asset classes or any investment strategy nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. |
| Copyright © 2024, All rights reserved. |
|
|
