States Press Ahead on Electric Cars as Washington Steps Back

Since taking office in January, United States President Trump has spoken out against electric vehicles (EVs), signing an executive order to scrap the “EV mandate” (despite there being no such federal mandate).

In recent months, federal support for EVs has waned under the Trump administration, resulting in announcements of delays for several EV-makers due to the ongoing sectoral uncertainty. However, some states are doubling down on efforts to expand their EV markets, with heavy investments in charging infrastructure and other initiatives.

Trump’s executive order sought to halt federal support for EVs, including a $7,500 tax credit for EV buyers, which was established by law in 2022, as well as government support for EV charging infrastructure, and low-interest loans for automakers looking to develop EV and battery plants. Trump also stated plans to eliminate local regulations from California, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington to ban the sale of gasoline-powered vehicles by 2035.

In September, the government officially halted tax credits on new and second-hand EVs. However, several carmakers, such as General Motors and Ford, have, so far, maintained their highly competitive pricing plans on EVs, to encourage consumers to make the shift from internal combustion engine (ICE) vehicles to electric. The federal tax credit for EV chargers will also come to an end in June 2026.

The CEO of the automaker Ford, Jim Farley, said, “I think it’s going to be a vibrant industry, but it’s going to be smaller, way smaller than we thought, especially with the policy change,” in reference to the scrapping of the EV tax credits.

Price reductions on EVs are expected to help counter the scrapping of the tax credit on electric cars in the short term; however, the growing uncertainty around EV uptake could drive some automakers to stall new EV production, which could slow the pace of uptake in the coming years.

Some EV makers are still betting big on the rising uptake of EVs in the United States. In August, Ford announced $5 billion in financing for EV production as part of its “new Model T moment”. Ford plans to sell an EV pickup for $30,000, supported by the new investment, which would make its EVs highly competitive with alternative ICE models. Other companies also expect to be able to reduce the prices of EV models in the coming years, as production expands and the cost of manufacturing EVs decreases.

Meanwhile, Hyundai said it planned to maintain its EV investments in the United States. The firm’s CEO, José Muñoz, said that it could shift between producing EVs and ICE vehicles at its Georgia plant, which will allow it to respond to market demand.

General Motors CFO, Paul Jacobson, stated, “We need to let it settle and understand where is that natural (EV) demand going forward and how do we meet that natural demand.” “That’s going to take a little bit of time. We’ll probably have to adjust our footprint a little bit.” Jacobson still expects a longer-term growth in demand for EVs, even without the tax credit, albeit at a slower pace.

At the state level, several U.S. states are doubling down on plans to expand their EV markets even without federal support. Under the Biden administration, it was announced that Chicago would receive $14.5 million in federal funds to develop nearly 200 EV charging stations. However, Trump announced that this investment would not go ahead, as he suspended the Charging and Fuelling Infrastructure grant programme.

Nevertheless, Chicago is continuing with its EV Readiness programme with funding from the Illinois utility ComEd. Illinois aims to roll out 1 million EVs across the state by 2030, a significant rise from the 160,000 registered vehicles at present. It is making sure it stays on track to meet this goal with the launch of its fourth EV Readiness cohort, supporting representatives of 16 municipalities in upgrading their permitting and zoning processes related to EV charging, as well as raising awareness about EVs and state and local incentives.

To date, 38 communities have enrolled in the programme, which has driven up EV uptake in these areas, compared to other parts of the state. Cristina Botero, the senior manager of beneficial electrification for ComEd, explained, “People sometimes think that the dollars are the only reason people are not transitioning to EVs,” said Botero. “But a big part of it is education.”

The Trump administration has attacked the U.S. EV industry on several fronts, scrapping tax credits for consumers, making it more expensive for manufacturers to produce EVs, and halting the rollout of EV charging infrastructure. However, several U.S. states and EV-makers see a bright future in EVs, suggesting that the uptake of electric vehicles will continue to increase, even if at a slower pace.