Trump calls US electric car subsidy into question

Under President Biden, the US created a unique support framework for electric mobility with the Inflation Reduction Act. During the election campaign, Republican Donald Trump announced that he wants to abolish the tax credit for electric cars if re-elected and possibly bring Elon Musk into his cabinet.

In an interview with the news agency Reuters, Trump said that he is a “big fan of electric cars” but is also in favour of petrol and hybrid vehicles. He sees a “much smaller market” for electric cars due to cost and range issues.

However, he disagrees with the approach of tackling the cost problem through state subsidies. If he is re-elected, he wants to look into abolishing the tax credit of up to 7,500 dollars for the purchase of an electric car. “Tax credits and tax incentives are not generally a very good thing,” the Republican presidential candidate told the new agency.

The other subsidy programmes for the production and supply chain of electric vehicles in the US, which were introduced by the government under Joe Biden (Democrats), could also come under attack again if Trump is elected for a second term. Trump wants to “reverse Treasury Department rules,” according to reports. He also announced measures to make exporting vehicles produced in Mexico for the US market more difficult through new tariffs. It would affect numerous car manufacturers that currently produce EVs in Mexico (such as Ford and GM) or plan to do so soon – BMW, BYD and Tesla, for example.

Tesla was also mentioned elsewhere in the Reuters interview. If Trump were to implement these plans, Tesla would be severely affected; after all, Tesla benefits from the tax credit and is currently building a plant in northern Mexico clearly aimed at US exports. There is a lot of potential for conflict between Trump and Tesla.

After the latest statements and the talk on Elon Musk’s social media platform X, Trump is considering either bringing the Tesla CEO into his cabinet as a minister or retaining him as an advisor to his potential government. “He’s a very smart guy. I certainly would, if he would do it, I certainly would. He’s a brilliant guy,” Trump said. In the aforementioned livestream conversation on X, Musk also suggested the creation of a ‘commission for government efficiency’ and said that he would be “happy to help.” Musk had already expressed his support for Donald Trump in July.

reuters.com