According to industry groups and executives, automakers are preparing for President-elect Donald Trump to introduce new tariffs on vehicles imported from Mexico and potentially other countries while also anticipating a rollback of pro-electric vehicle (EV) policies.
Trump has announced plans to repeal Environmental Protection Agency and Transportation Department vehicle regulations starting his first day in office. He is also considering reducing or eliminating EV tax incentives, which could allow automakers to focus on producing more profitable gas-powered SUVs and trucks. However, this raises concerns about the future of extensive investments in EV technology.
The Zero Emission Transportation Association, which includes Tesla, Rivian, Lucid, and LG, expressed readiness to collaborate with Trump, emphasizing the critical next four years for developing and deploying these technologies in American facilities by American workers.
Tesla’s stock rose nearly 15% on Wednesday as investors speculated that the company would benefit from CEO Elon Musk’s relationship with Trump.
Read: Tesla Stock Surges 15% Following Trump’s Election Victory
The American Trucking Associations urged Trump to replace the EPA’s strict tailpipe emissions standards with national standards that are “technologically achievable and reflect the operational realities of our essential industry.”
Trump aims to revoke California’s ability to set its vehicle emissions standards, a policy he rescinded in 2019 but was reinstated by President Joe Biden. Additionally, Trump will determine the allocation of billions in EV charging grants.
Trump has repeatedly threatened to impose 200% or more tariffs on vehicles from Mexico and might extend these tariffs to vehicles from Asia and Europe.
Trump expressed a willingness to allow Chinese automakers to build vehicles in the United States, provided they establish manufacturing facilities locally.
“We’re going to give incentives, and if China and other countries want to come here and sell cars, they’re going to build plants here and hire our workers,” Trump stated in an interview with Reuters.
South Korea’s trade minister predicted increased investment from Korean companies in the U.S. should Trump impose higher tariffs.
Honda’s chief operating officer, Shinji Aoyama, noted that Honda’s production capacity in Mexico is about 200,000 vehicles annually, with 80% destined for the U.S. market. He mentioned that permanent tariffs could force Honda to consider relocating production.
Toyota, which manufactures Tacoma trucks at two facilities in Mexico and sold over 230,000 units in the U.S. last year, could consider moving production to San Antonio, Texas, if Trump imposes steep tariffs, according to a source close to Toyota.
