In other places, what stands out about Trump’s policies is their incoherence — and how few of his constituencies they will satisfy. Late on Monday, Trump suggested that he might impose 25% tariffs on Canada and Mexico as soon as February 1. Such an action would quickly harm key segments of the American energy industry. Canada exports about $124 billion of crude oil to the United States every year — much of it a heavy, sludgy petroleum from the Albertan oil sands. That sludge is piped across North America, then fed into U.S. refineries, where it helps produce a large portion of America’s fuel supply. (Alberta’s heavy, sulfurous sludge is particularly well-suited to mixing with the light, sweet crude produced by American frackers.) Should Trump impose those tariffs, in other words, he would gambol into a self-imposed energy crisis.
Tariffs are not the only place where Trump could undermine his own policies. One of his executive orders on Monday aimed to establish America as “the leading producer and processor of non-fuel minerals, including rare earth minerals”; three clauses later, it announced an end to the federal government’s so-called “EV mandate.”
But by kneecapping demand for electric vehicles, Trump will hurt the critical minerals industry more than any anti-growth hippie could fathom. For the past few years, corporate America and Wall Street have invested billions of dollars in lithium and rare-earths mining and processing facilities across the country. These projects, which are largely in Republican districts, only make financial sense in a world where the United States produces a large and growing number of electric vehicles: EVs make up the lion’s share of future demand for lithium, rare earth elements, and other geostrategically sensitive rocks, and any mines or refining facilities will only pencil out in a world where EVs purchase their output. If Trump kills the non-Tesla part of the EV industry, then he will also mortally harm those projects’ economics.
But US automakers are too committed to EVs to pull back completely, no matter what changes Trump is able to implement.
The tax credit and other federal support for EVs have broad support among automakers. The Alliance for Automotive Innovation has pushed to continue the tax credit and other support, arguing that US automakers seeking to build and sell EVs need the help to compete with Chinese automakers who make far more vehicles than any other country, thanks to China’s focus on EV sales.
While US electric vehicle sales continue to grow, rising to 1.3 million vehicles sold last year, that only makes up 8% of total sales of new passenger vehicles, according to Cox Automotive. The other 92% of US car buyers bought cars at least partly, if not totally, powered by gasoline.
China, in contrast, built nearly 50 million vehicles in 2024, with nearly one third of those EVs or plug-in hybrids.
The United States “is no longer the largest auto producing country,” said a letter from the industry trade group. “China’s strategic focus on EVs has propelled it to global leadership.” While the letter was sent to Congress last October, the position of the trade group has not changed since the election.
And the legacy automakers don’t want to walk away from EVs, even if they’re losing money on the endeavor right now. They forecast that as their EV sales increase, they will swing from losses to profits just as Tesla did as it was scaling up its EV production. And with fewer moving parts, it can be more profitable to build an EV than a gasoline-powered car with its complex engine and transmission.
Tesla’s profit margin on its cars, for instance, was about 16% during the first three quarters of 2024. That’s nearly twice the profit margin at General Motors.
And the industry also knows that the car market is a long-term game. American hunger for electric vehicles isn’t just growing — it’s growing faster than demand for petroleum-powered cars. Dozens of EVs are wending their way through product pipelines that take years to navigate, often far longer than a single presidential term. And legacy automakers have already sunk $33 billion into factories that will only build electric cars, plus another $90 billion in American battery factories — many of which are in southern states that voted for Trump.
“We might see a much slower adoption of EVs (with a regulation change),” said Jeff Schuster, global head of automotive at GlobalData, an industry consultant. “But with all the investment, we’re not likely to see it reversed.”
General Motors and Ford declined to comment on Trump’s EV executive order Tuesday.
trump if usually incoherent.
Is this is part of Trump project 2025