Trump Policy Reversal Sparks $65 Billion Dollar Bleed in EV Sector

Last week, the Trump administration delivered “one of the single largest deregulatory actions in U.S. history” when it ended the 2009 “endangerment finding,” which definitively and legally classified carbon dioxide as a threat to public health. This legislation fundamentally underpinned any legal authority at the federal level to restrict greenhouse gas emissions in the United States. As such, this action rescinds all emissions standards for cars and trucks effective immediately, with enormous implications for the electric vehicles market, the gas-powered automotive industry, and for the climate.

The end of the “endangerment finding” is just the latest in a laundry list of anti-EV and anti-climate policies that Trump has taken since he took office last year. The Trump administration previously rolled back a Biden-era $7,500 federal tax credit for electric vehicles in September. As a result, the domestic and international EV sector has already been showing major signs of distress, even before emissions standards were repealed this month.

As a result of these policy pivots, in addition to a landscape previously shaped by “overstated enthusiasm for the green transition,” EV makers are now reporting enormous losses and slashing programs left and right. On a global level, EV producers have registered $65 billion in write-offs since the end of the U.S. EV tax credit last fall, according to reporting from.

Ford, for example, recently disclosed a US$19.5bn writedown and the cancellation of its electric F-150 pick-up truck. But the problem is not limited to U.S. automakers; many European firms were also counting on U.S. markets. Stellantis, an automaker based in the Netherlands, planned for electric cars to represent half of its U.S. sales by 2030. Current projections put U.S. EV demand at just 5% of the new vehicle market over the next few years. As a result, Stellantis “took a $26 billion hit after scrapping several fully electric models and reviving its 5.7-litre engine for the US market” according to reporting from nonpartisan news outlet Semafor.

While the EV market suffers, the Trump administration promises that these policy changes will provide a windfall for traditional automakers. The administration reportedly estimates that “an average cost savings of over $2,400 per vehicle for traditional manufacturers.”

While EV market contraction is intimately related to the 180 in EV policy between the Biden and Trump administrations, it is also a reflection of wider issues in the sector: overestimating EV demand, failing to produce affordable EV models, and under-developing charging infrastructure. In short, automakers got ahead of themselves and failed to make markets realistic for consumers. “Everyone got caught up in the kind of euphoria of ‘look at the valuations Tesla was getting’ . . . and they didn’t bring the customers with them,” Bernstein analyst Stephen Reitman recently told EV magazine.

However, despite the major contraction in global EV markets, electric cars are not dead in the water. While things are looking grimmer than ever for EVs in the United States, especially in light of the fresh slashing of lawmakers' ability to regulate emissions, other EV markets around the world are still going strong.

While many European automakers are reeling from the loss of the U.S. market, there is still strong and growing demand elsewhere – in the European Union, sales of fully ?electric vehicles overtook those of gas-only vehicles for the first time in history in December. And emerging markets are showing strong demand for EVs, “leapfrogging legacy auto markets in the process.”

Ember, a global think tank, reports that emerging markets are embracing EVs with vigor, with particularly strong growth in Southeast Asia, India, Mexico and Brazil. In 2025, over a quarter of new vehicle sales in emerging markets were electric. “Emerging markets will shape the future of the global car market,” the December report says. “The choices made now on charging infrastructure and early support will determine how fast this momentum continues.” Of course, a supportive policy environment is key.

By Haley Zaremba for Oilprice.com

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