Trump Considers Ending Electric Vehicle Tax Credit During His Administration (Comprehensive)

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Donald Trump, the former U.S. president and Republican presidential candidate, has suggested that he may eliminate the $7,500 (approximately 10 million KRW) electric vehicle (EV) subsidy if he returns to office.

In an interview with Reuters on the 19th (local time) after a campaign rally in York, Pennsylvania, Trump called the electric vehicle tax credit under the Inflation Reduction Act (IRA) "ridiculous" and said, "Tax credits and tax incentives are generally not that good." He emphasized, "I like electric cars," but also said, "I like gasoline cars, hybrid cars, and other cars that will come out in the future." He further explained, "If I return to the White House, I could overturn Treasury Department regulations related to EV tax credits or request Congress to completely repeal the related tax credits."

Currently, the Biden administration provides up to $7,500 per electric vehicle produced in North America as a subsidy under the IRA. The aim is to accelerate the transition to electric vehicles while revitalizing the U.S. economy.

Trump also promised to withdraw Biden administration regulations that urge automakers to produce more electric and plug-in hybrid vehicles to meet stricter emission standards. The Biden administration finalized this year a vehicle emission regulation that aims to increase the share of electric vehicles among passenger cars sold in the U.S. to 56% by 2032.

This is not the first time Trump has taken a critical stance on electric vehicles. On the 21st of last month, during a rally in Michigan, he also pledged to repeal Biden's electric vehicle mandates. Trump argues that the benefits of electric vehicles go to China and that the domestic internal combustion engine vehicle industry is struggling.

If Trump returns to power, it is highly likely that the pace of electric vehicle adoption will slow down. This is why there are expectations that it could negatively impact the domestic secondary battery industry as well.

In the interview, Trump also mentioned Elon Musk, CEO of Tesla, the world's largest electric vehicle company. Regarding whether he would appoint Musk as a cabinet member or advisor, Trump said, "If he is willing..." leaving the possibility open.

Although Trump is critical of EV-friendly policies, attention is drawn to the fact that he maintains a close relationship with Musk, who has publicly supported him. In a conversation with Musk released on the X platform (formerly Twitter) on the 12th, Trump praised Tesla electric vehicles as "incredibly great products."

Because of this, the market expects that Tesla will remain a beneficiary even if Trump returns to power.

Meanwhile, Trump declined to comment on the forced breakup of Google, the world's largest search engine company. He said Google "will have to pay a big price," but also remarked, "They are almost like the Wild West era." The U.S. Department of Justice is considering forcibly separating Google's Android operating system (OS) and Chrome web browser or forcing the sale of its advertising service company, AdWords.

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