America’s Electric Car Crash Is Over. Europe Has Finally Noticed

COMMENTARY Energy

America’s Electric Car Crash Is Over. Europe Has Finally Noticed

May 5, 2025 3 min read
COMMENTARY BY
Diana Furchtgott-Roth

Director, Center for Energy, Climate, and Environment

Diana is Director of the Center for Energy, Climate and Environment and the Herbert and Joyce Morgan Fellow.
During the campaign, candidate Trump was consistent in his determination to restore to Americans the right to buy whatever car they want. seksan Mongkhonkhamsao / Getty Images

Key Takeaways

President Donald Trump has upended the EV landscape—sending shockwaves through the industry that are reverberating not just in the United States, but globally.

The European Union can surely no longer ignore the costs of banning new gas-powered car sales by 2035.

President Trump has said that he doesn’t want to take away Americans’ choice of vehicles—and he’s standing up for drivers in other countries too.

American electric vehicle sales have continued to inch up, from 7 per cent of new cars sold last year to 7.5 per cent this year. But no one now expects that they will reach the more than 50 per cent mandated by the Biden administration by 2032. President Donald Trump has upended the EV landscape—sending shockwaves through the industry that are reverberating not just in the United States, but globally.

During the campaign, candidate Trump was consistent in his determination to restore to Americans the right to buy whatever car they want. At a 2024 campaign rally in Waco, Texas, he said: “We are a nation whose leaders are demanding all electric cars, even though they can’t go far, cost too much, and whose batteries are produced in China with materials only available in China, when an unlimited amount of gasoline is available inexpensively in the United States of America, but is not available in China.”

He hasn’t wasted any time in putting in place a five-pronged approach to make his policy a reality.

First, on Jan 20, in an executive order entitled “Unleashing America Energy”, the president removed the requirement, put in place by Biden-era Transportation Department and Environmental Protection Agency regulations, for car companies to sell a certain share of vehicles that are battery-powered electric, effectively cancelling the mandate.

>>> Trump Energy Plan Will Avoid Europe’s Energy Disaster

Second, Trump pledged in the same executive order to consider cancelling the $7,500 tax credit to buy EVs. The credit, signed into law by Joe Biden as part of the Inflation Reduction Act, would have cost $105.7 billion over the next 10 years.

Third, Trump paused producer tax credits for clean energy, including advanced battery technology, estimated to cost between $30 billion and $200 billion over the next decade.

Fourth, President Trump’s transportation department is suspending billions allocated to build electric charging stations all over the country. These charging stations were supposed to overcome the main disadvantage of EVs: that drivers might run out of range before they found somewhere to recharge their vehicle.

Fifth, President Trump pledged to end “state emissions waivers that function to limit sales of gasoline-powered automobiles,” such as California’s clean car regulations. The transportation department and the Environmental Protection Agency are working together to roll back state waivers.

The effects of Trump’s policies are being felt domestically, as car companies quietly drop their Biden-era plans to go all-electric. Assaults against Toyota for insisting that it would sell any car that its customers wanted to buy have stopped.

But the consequences of the president’s agenda are set to be wider than that.

The European Union can surely no longer ignore the costs of banning new gas-powered car sales by 2035. The EU is still allowing Chinese companies to sell low-priced electric cars into its market, admittedly with tariffs of 17 to 38 per cent, while some analysts have suggested that the German car industry could lose as many as 400,000 of its 800,000 jobs over the next decade.

In the UK, Labour politicians are partially backtracking on Conservative promises to require 80 per cent of new cars sold to be electric by 2030 and 100 per cent by 2035, introducing a number of new exemptions. Aston Martin, which scheduled its first EV for 2026, has postponed the new model until later this decade.

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Just as President Reagan’s 1986 tax cuts forced other countries to lower their taxes to keep up, President Trump’s common-sense attitude towards gasoline-powered cars is likely to throw a spanner in the works for European EV plans.

Rolling back mandatory EVs also increases pressure on China, which produces over three-quarters of global EV batteries. At the same time as he’s liberating drivers, President Trump is casting a blow at the Chinese economy.

The automotive industry wants predictability. It is grappling with the practicalities of transitioning to electric vehicles within a myriad of different national laws. The complexity of producing EVs at a price that average households can afford, while holding off Chinese imports and preserving domestic auto industries, presents a formidable challenge for political and business leaders alike.

But the heart of the matter is that drivers should have a choice over which car to buy, based on their own preferences and needs. People do not want to be dictated to by governments, hence the rise of Right-wing politicians across Europe who have promised liberation from environmental regulations. America is about to become an even more powerful example of the advantages of leaving car purchases to consumer choice.

President Trump has said that he doesn’t want to take away Americans’ choice of vehicles—and he’s standing up for drivers in other countries too by hitting the brakes on the EV mandate.

This piece originally appeared in The Telegraph

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