Hello and welcome decoderI’m Jake Castreneux, executive editor The VergeI’m filling in for Nilay for one of Thursday’s episodes while he transitions back into full-time podcast hosting duties.
In its latest form, the tax credit offered a $7,500 rebate on eligible, domestically manufactured electric cars. As you’ll hear Andy explain, it was designed to accomplish several different things at once: boosting the United States’ EV market, fighting climate change, and keeping pace with China, which has become the global leader in affordable EVs.
But the second Trump administration has not been kind to the renewable energy movement, and EVs have become a political football over the past several years. Trump has turned them into symbols of government overreach and used them as weapons to target his enemies. Just a few weeks ago, in the United Nations General AssemblyTrump called climate change a “hoax”. So, that’s how he feels about it.
Now the EV tax credit has expired, and it won’t be coming back anytime soon. So where does that leave the auto industry? And what will happen to traditional American carmakers that are investing heavily in domestic production to electrify their lineups?
As you’ll hear Andy say, there’s a tough road ahead. EVs are expensive to make and also expensive to buy. The supply chain they rely on is intertwined with China, and is now subject to tariffs and an escalating trade war. And consumers are extremely price-sensitive when it comes to EVs and the new technology that comes with them, much more so than the early adopters who flocked to Tesla years ago.
If the US auto industry wants to win back buyers, it will need to produce cheap EVs like China does. And this will require manufacturing, supply chain and technology innovation that will take some time to materialise.
This is a really difficult, complex set of problems, with a lot of moving parts, so I was really excited to have Andy on the show to break down all these components and give us a clearer picture of what’s going to happen next.
If you want to read more about what we talked about in this episode, check out the links below:
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