The outcome of the Tuesday presidential election in the United States of America will shape the automotive industry in 2025, according to the Economist Intelligence Unit (EIU) Industry Outlook for 2025.
The election is between Donald Trump, the Republican candidate, and Kamala Harris, his Democratic counterpart.
In his first term, Trump reversed Obama’s emissions targets and fuel economy standards.
The EIU team expects similar policies in his second term to be tempered by the influence of Elon Musk, founder of Tesla and a key Trump supporter.
Trump in his campaign speeches revealed plans to revoke parts of the United States’ Inflation Reduction Act (IRA), which contains Electric Vehicle (EV) subsidies and tax breaks, as well as incentives for renewable energy.
He also criticised government spending on EV charging networks.
Read also: Here’s all to know about the 2024 US presidential election
The report predicts that although Trump has expressed some support for EV sales, he is also likely to roll back the Biden administration’s target to ban sales of fossil-fuel vehicles by 2035, although this target is not enshrined in legislation.
Meanwhile, a recent analysis from Carbon Brief, a UK-based climate advocacy group, estimates that a victory for Trump presidential election could lead to an additional 4 billion tonnes of US emissions by 2030, compared with the plans of Joe Biden, the incumbent president.
According to the report, the US would likely miss its global climate pledge under the Paris Agreement to cut emissions by 50-52 percent below 2005 levels by 2030.
The EIU, however, believes that Kamala Harris’ win will likely extend the current administration’s policies on EVs by implementing stricter emissions and fuel economy standards.
Harris has been a strong proponent of the green transition and it is predicted that she will also continue to focus on reducing Chinese dominance in important sectors such as EVs, autonomous cars, data security, and AI.
“We would expect a further uptick in US EV sales in the event of a Harris victory, as well as stronger investment into EV charging infrastructure, and domestic EV and battery production,” the report states.
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