How the US Election Could Impact Electric Vehicles

 In EV Industry

*Note: this article is not intended to endorse one party or another, but to simply share the stance that the Democratic and Republican parties have taken with relation to electric vehicles. If you feel that information is missing or inaccurate, please email us here and we will make the correction.

If the U.S. Republican and Democratic parties can agree on one thing about the 2016 presidential election, it’s that the choice is a study in stark contrasts.

Over the summer, the RNC (Republican National Convention) emphasized how dissatisfied the party’s voters were with the status quo and presented a grim picture of the American scene. Late in July, the DNC (Democratic National Convention) offered a rosier view of the economy and a considerable measure of satisfaction about how the last eight years went under Democratic rule in the White House.

On the future of the energy generation and the transportation industry, the parties could hardly disagree more. There will likely be major ramifications for electric vehicles either way, and the whole discussion begins with climate change.

What to Do About Rising Temperatures

Tesla Model 3The electric car movement is tied directly to the record-high temperatures being recorded across the planet. Tesla CEO Elon Musk has repeatedly said his cars were intended as a way to transition toward sustainable transportation. If/when renewable energy powers battery-electric vehicles, zero emissions driving becomes real.

In a Trump presidency, this key argument in favor of electric vehicles – that climate change exists and is dangerous – would likely not be acknowledged. Trump has previously described climate change as a man-made concept.

Trump’s major energy speech, delivered in North Dakota in May, focused on increasing fossil fuel projects. He said he would do everything he could to revive the coal industry while increasing the amount of domestic oil and natural gas production.

Taken together, it appears that Trump does not consider global warming a threat to quality of life in the U.S. and has few plans to reduce emissions. Trump seems to be OK with increasing greenhouse gases if it creates/keeps more wealth within the country.

Trump also said he has adjustments for international climate goals the U.S. has agreed to in the past.

“We’re going to cancel the Paris Climate Agreement and stop all payments of U.S. tax dollars to U.N. global warming programs,” Trump wrote in his energy plan.

For her part, Hillary Clinton considers climate change “an urgent threat and a defining challenge of our time.” On her campaign website, Clinton wrote how global warming “threatens our economy, our national security, and our children’s health and futures.”

The third climate goal listed is also “Reduce American oil consumption by a third through cleaner fuels and more efficient cars, boilers, ships, and trucks.” Clinton is a subscriber of the data presented on climate change and considers more efficient cars a way to harness runaway emissions levels.

The EPA and Electric Vehicle Incentives

Getting electric vehicles on the road has proven tough given the high prices of the earliest models. In order to compete with gasoline vehicles, the U.S. government has offered a tax credit of up to $7,500 on the purchase of a qualifying electric car (the credit amount is based on the capacity of the battery used to power the vehicle).

Trump noted in his energy speech that the government had no place picking “winners and losers” in the energy economy, and this incentive would definitely be at risk when it maxes out at 200,000 credits per automaker. In Tesla’s case, the credit will run out soon after the Model 3 begins deliveries.

Other automakers like Ford, Nissan, and Chevrolet would see their credits expire soon after, possibly as early as 2018, which would be the second year in the term of the next president. At that crucial point in the development and roll-out of zero-emissions vehicles, pulling the plug on incentives could delay any momentum the segment had going for it.

The Koch Brothers, who rank among the GOP’s (Republican Party’s) biggest donors, have already begun a campaign to kill off electric vehicle incentives. If Trump is to become president, it is highly unlikely that he would continue this policy when it expires.

EV incentives by stateHillary Clinton appears be more open to the renewal of the EV tax credit. According to the candidate’s website, the administration would seek “strategies for electric vehicle deployment” and efforts to increase “low-carbon transportation solutions.”

While a conservative Congress would look to block any extension of this tax credit, Clinton could use a bigger coalition and veto power to give new incentives a chance. Consumers will not buy EVs on any significant level unless the price points are competitive, so this factor is important.

Fuel Economy Standards

Volkswagen BUDD-e

Volkswagen BUDD-e concept.

During his energy speech in North Dakota, Trump said he would end the “totalitarian taxes” levied by the EPA for clean air violations and other offenses. In such an administration, it is difficult to see Volkswagen being held accountable for Dieselgate, meaning the $2 billion windfall for electric vehicle development would not exist.

The CAFÉ standards of 54.5 miles per gallon already in place could become vulnerable under a President Trump as well.

“We’re going to rescind all the job-destroying Obama executive actions including the Climate Action Plan and the Waters of the U.S. rule,” Trump wrote in his energy statement.

While Trump has not singled out the electric vehicle industry specifically, his pronouncement that he would cut regulations “massively” suggest fuel economy standards that force major automakers to produce electric vehicles would likely be undermined if he was given the power with a willing Congress behind him.

Political Impact on The Future of EVs

In the simplest terms possible, the Democratic Party considers climate change a key issue for the country and world, and anything that will help lessen its impact would be welcome on the political agenda. Most states with EV incentives in place are controlled by Democrats.

On the other hand, there is a large contingent of the Republican Party that does not believe in climate change or is least unwilling to concede it is a danger to the safety and economic well-being of Americans. Combined with a party-wide support for fewer regulations and more fossil fuel production, electric cars do not appear to be a key part of the Republicans’ plans moving forward.

*While one party appears more in-favour of electric vehicles than the other, we again want to stress that we are not trying to take a stance but instead are simply trying to make an accurate analysis of the candidates’ policies specifically towards electric vehicles.

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