Policy uncertainty and trade war with China negatively impact US electric vehicle market

From Yahoo Finance: 2025-05-06 09:09:00

The Biden and Trump administrations differ in their strategies to reduce US reliance on Chinese-made vehicles. The ongoing US-China trade war could negatively impact the US EV market, particularly due to dependence on Chinese imports like lithium-ion batteries. Trump’s rollback of EV-friendly policies poses a threat to domestic sales.

Biden imposed tariffs on Chinese EVs and lithium-ion batteries to protect US manufacturing. His administration aimed for 50% of new US vehicle sales to be battery electric by 2030. Investments were made in infrastructure and domestic battery manufacturing to achieve this goal.

Under Trump, a 145% tariff on Chinese goods, including EV components, was imposed, increasing costs and dampening domestic EV sales. China’s export restrictions on rare earth elements further complicate the US EV market. Tesla faces challenges with tariffs affecting its global supply chain.

China’s cost-competitive EV market has outpaced US manufacturers. BYD surpassed Tesla in global EV sales, and retaliatory tariffs have led to diplomatic friction. Trump granted temporary exemptions for certain automakers to ease tariffs. The US faces challenges in shifting its EV production supply chain away from China.

US initiatives to ramp up domestic battery production may not offset China’s dominance. Trump’s policy shifts, including easing fuel economy targets and eliminating EV tax credits, could hinder EV growth. Setbacks in the industry include delayed battery investments, impacting companies’ EV strategies amidst policy uncertainty.



Read more at Yahoo Finance: US electric vehicle market amid trade and policy uncertainty