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Sales of EVs in the US rose by 12% in the fourth quarter to a record 1.3 million, data by research firm Cox Automotive shows.
Charlie Chesbrough, Cox Automotive’s senior economist, said that, with the US election season in the rear view mirror, EV sales are seeing something of an upward bump.
“Many buyers who thought it best to wait to get the best deal are realizing that now is the time to buy before new administration policy changes are implemented,” he noted. “Some vehicle buyers are taking advantage of EV discounts that could be dialed back by the new administration, and others may be concerned potential tariffs may hit prices.”
This sentiment has already translated to a welcome boost to EV sales for General Motors and Ford Motor Co.
GM’s EV sales soared by 125% in the fourth quarter and ended 2024 up 50% at a record 114,432 EVs, according to the company. Ford’s EV sales rose by 16% in the fourth quarter and ended 2024 with sales of 98,000 EVs, the company said.
Clearly, there’s still a gap to close with internal combustion engine vehicles, but things are heading in the right direction to meet US EV mandates.
It’s still unclear what President-elect Trump will do about tax credits for EVs, and it’s likely to be a decent illustration of whether his campaign promises were negotiating tactics or firm pledges.
During the recent presidential campaign, Trump said he would “end the EV mandate on Day 1,” a move which would likely shift EV sales lower.
But he has also said that he is “all for electric cars” due to his friendship with Tesla co-founder Elon Musk. “I have to be, because Elon endorsed me very strongly,” he noted in August.
This has led many to believe Trump will back away from at least some of his campaign rhetoric around EVs.
Some industry observers say Trump could withdraw money set aside for charging infrastructure under the provisions of the Inflation Reduction Act. Others say the new administration might roll back emissions and fuel-economy standards to 2019 levels and try to block California from setting its own vehicle emissions standards.
Then there is the potential for increased tariffs on the battery and EV supply chain. That wouldn’t be entirely new; EVs have for been caught in the crossfires of the trade war tit-for-tat between the US and China for some time.
Outgoing president Joe Biden kept the Trump-era tariffs in place for China and imposed some more of his own — including a 100% tax on imports of Chinese EVs and a 25% tax on lithium-ion batteries, along with steel and aluminium products.
Nonetheless, it is important to remember that billions of dollars have been spent on EV projects in the US, creating jobs across the country, including in Republican-controlled states. This will make it harder to secure support from Congress to rewind regulations, whatever party politicians might represent.
Biden has also just finalized a rule preventing the use of Chinese and Russian software and hardware in US car models. This would effectively ban cars from these countries in the US, even those made on American soil, and potentially dash Chinese automaker BYD’s hopes of breaking into the US market.
Removing incentives for EVs would more than likely slow sales for traditional manufacturers such as GM and Ford, just as sales are picking up. They would also not help Stellantis or Tesla; sales fell for both in the fourth quarter, albeit for differing reasons.
Musk has already said that the loss of credits would hurt peers more than it would hurt Tesla, implying it would not be a disaster for the US’ leading EV maker. Anything is possible, but that could be a clear indication of which way the new Trump administration will go after January 20.
In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Read more coverage on our dedicated Hotter Commodities page here.