January 30, 2025: Companies expecting financing for EVs and green energy projects face uncertainty over when — or if — the cash will be paid out following Donald Trump’s return to the US presidency, say analysts.
Trump, who took office for a second time on January 20, ordered an immediate freeze on all grants and loan guarantees issued under the outgoing Biden administration’s Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) — including funding for EV charging stations.
Now any company or organisation that has not yet received the funds faces uncertainty about whether the money will be available, according to energy data analytics firm Wood Mackenzie.
Meanwhile a catch-all Trump executive order on energy, underlining the change in political direction, included easing regulations on oil and gas production, but changing regulations that encourage sales of EVs.
A seasoned US energy market observer told Batteries International that while the direction of travel for investment in new energy vehicles under Trump is unclear, the move signals fresh optimism for lead battery manufacturers needed to supply the potentially resurgent ICE vehicles market.
Wood Mackenzie’s senior VP and thought leadership executive, Ed Crooks, said on January 23 a Biden administration official had told Reuters that roughly 84% of the total grants under the IRA, worth $96.7 billion, had already been committed before Trump took office.
“But any company or organisation that has not yet received the funds will face uncertainty about whether the money will be available.”
Crooks, who is also host of The Energy Gang podcast, said any administration is legally required to spend funds committed by Congress. To ensure that the IRA and IIJA money is not spent, the Trump administration will have to fight the question through the courts, or persuade Congress to take away the funding or use it for other purposes.
Crooks said the ‘Unleashing American Energy’ order sets the US government on a path towards eliminating subsidies and regulations that favour EVs, although these cannot be changed immediately.
“Ending the $7,500 tax credit for EVs requires action from Congress. Scrapping the federal emissions and fuel economy rules that encourage manufacturers to sell EVs is another move that will have to go through the usual regulatory processes.”
Over time, those changes, along with other measures such as steep tariffs on imported EVs from Mexico, could have a significant impact on the US vehicle market.
Before the election, Wood Mackenzie analysts projected plug-in electric vehicles — battery EVs and plug-in hybrids — would account for 32% of the US passenger car market in 2030.
“If Trump follows through with his efforts to remove supports for EV sales, we think that share could drop closer to 23%,” Crooks said.
As a result of the slower adoption of EVs, Wood Mackenzie is projecting that US gasoline demand in 2030 will be about 300,000 barrels per day (or 4%) higher than in its previous forecast.
