US Auto Industry In Turmoil After First Week Of Trump 2 – CleanTechnica

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No one should be surprised that the new lord and master of Fortress America has undone every rational policy for saving the planet from a climate meltdown put in place by prior administrations. He said he was going to do it, the people voted for him, and now he is free to wreak his vengeance on the country without restraint. The American auto industry is faced with the new realities of Trump 2 and is trying to figure out where to go from here. Vox reports this week that the new president — same as the old president circa 2017 — signed hundreds of executive orders in his first week on the job. One of them, known as Section 7 and titled “Terminate the Green New Deal,” goes after programs that support building out the country’s EV charging infrastructure.

In particular, it targets the National Electric Vehicle Infrastructure (NEVI) program and the Charging and Fueling Infrastructure Grant Program, which were made possible by the 2021 Infrastructure Investment and Jobs Act. Together, the two programs allocate $7.5 billion to expand EV charging infrastructure in America. Trump wants to halt the disbursement of unspent funds from those programs and stifle the EV revolution by delaying or eliminating any programs that will encourage Americans to drive electric cars.

Trump promised to freeze EV charging infrastructure funding during his election campaign, but legal experts told Vox doing so would likely violate the Impoundment Control Act of 1974, which prevents US presidents from blocking spending that has been appropriated by Congress. The alleged president has promised to repeal that law and give that power to himself. Congress, of course, is the only branch of government that can pass or repeal laws. “These programs are legally entrenched, widely supported, and designed to withstand political turbulence,” said Kathy Harris, director of clean vehicles, climate, and energy at the Natural Resources Defense Council (NRDC). “The rhetoric is designed to grab headlines, but the reality is more complicated.”

Vox claims this is just political theater at this point, but it is having ramifications in the US auto industry. Businesses like predictability because it allows them to make rational plans for the future. Supply chains do not get altered and factories do not get built overnight. Abrupt policy changes cost manufacturers money and delay the introduction of new models. In addition to freezing funding for EV charging infrastructure, Trump also announced plans to roll back EPA exhaust emission rules put in place last year after protracted negotiations with the auto industry and its Tier One suppliers. He also wants to end EV subsidies and incentives, including the $7,500 tax credit for people who buy new EVs. So far, his executive orders do none of these things. Then again, we are only at the start of Week Two.

The auto industry, to its credit, does not seem too fazed by any of this, Vox reports. While some companies have rolled back certain plans ahead of Trump’s victory — Ford notably canceled plans for a three-row electric SUV last August — there’s little doubt that when it comes to transportation, the future will be electrified. It would be foolish to bet on fossil fuels at this point. In the words of Kathy Harris of NRDC, “the American auto industry is not in a bubble, and the global auto industry is moving towards these cleaner vehicles.”

“Trump is leaving himself a pretty big opening here,” Vox says. “By leading with a ban on EV chargers, he’s not taking direct aim at the American auto industry. It almost seems like this executive order is the applause line, and he’s waiting to gauge the audience’s reaction before axing programs like tax credits that directly impact carmakers and buyers. And while he’s holding up that order, Trump leaves the real stakeholders twisting their caps in their hands, wondering once again if he can really do that. It will take months, if not years, to find clarity here.”

The Effects On The Auto Industry In Michigan

Although the American auto industry includes many states, particularly in the Southeast, Michigan is its traditional home. And  Michigan is where the anti-EV animus of the new administration is likely to bite the hardest. According to PBS, more than $27 billion in investments are being poured into 60 EV manufacturing and battery projects in the that state. Georgia, with $26.6 billion, is a close second.

Michigan is home to hundreds of supply companies in addition to the automakers. There is Factory ZERO, GM’s remade assembly plant for electric Hummers and Silverados in the Detroit neighborhood of Hamtramck. A $1.6 billion battery manufacturing campus facility is going up in Van Buren Township in southeast Michigan that’s expected to create more than 2,100 jobs and the equivalent of 200,000 EV battery packs each year once fully running. And in Detroit’s Corktown neighborhood, entrepreneurs at Newlab are networking with other founders and funders to collaborate with automakers.

Eric Frehsée, head of Tamaroff Auto Group in Detroit, told PBS, “I think that the investments aren’t ill spent,” referring both to state electrification efforts and the preparations his business is making to be successful in the era of electric cars. Frehsée has bought forklifts to lift heavy batteries at the dealership and taught his technicians to work on EVs that come in for maintenance. He has also installed EV chargers at the Nissan, Honda, Acura, and Kia dealerships he manages. “I think that it’s still the direction that we’re heading,” he said. Ray Smith runs Blast Detroit, an EV training program for aspiring auto technicians where apprentices learn to diagnose EV electrical, software, and battery systems and compare them to traditional gasoline-fueled cars. Regardless of federal policy changes, “We’ve got to move forward, of course,” he said.

Stellantis, the manufacturer of Jeep and Ram, said in a statement it is “well positioned to adapt to the policy changes enacted by the new Administration” and that it looks forward to working with the president. Ford had no comment on the changes, and a GM spokesperson did not comment. Of the so-called Big Three automakers, Stellantis is least prepared for the EV revolution and has recently cancelled plans for a long range battery electric pickup truck to concentrate on a plug-in hybrid pickup called the Ramcharger.

At the nonprofit Eastern Michigan Electric Automobile Association, president Bruce Westlake told the Associated Press that customers are coming in with the desire to clean up the environment, but that demand could dampen with less federal support for EVs and clean energy broadly. The American auto industry “may find themselves in a position they can’t recover from where they are making what the market doesn’t want. The Michigan EV industry is caught between building vehicles that are profitable now,” referring to gasoline cars, at the cost of not having EVs ready for the future. “I believe that initial investments will mostly be lost.”

Another Detroit-based company, Plug Zen, focuses on EV charging for companies that have fleets of cars and trucks. Eventually it wants to put chargers at workplaces and multi-family housing where charging can be very hard. “I’m having a wait and see approach when it comes to Michigan and how all those things are going to pan out,” CEO Q Johnson told the Associated Press. He works with people in the Michigan EV industry on a regular basis and doesn’t expect them to change course significantly. “We’re determined not to be left behind,” he said.

That’s a laudable sentiment, but one that may get trampled by the federal government over the next four years (or more). There is really only one hope for the EV revolution in America — electric cars and trucks that can take on conventional vehicles in quality and price and win. Whether such a thing is in the cards is hard to say after one week of chaos and tumult from an administration determined to burn the government to the ground.