Trump administration targets Joe Biden’s fuel-efficiency standards and EV incentives

Sources close to the Trump administration’s transition team said it plans to roll back stringent President Joe Biden's vehicle fuel efficiency standards and his regulations focused on electric vehicles. It’s another part of a push to fulfill Trump’s campaign promise to "end the EV mandate" while rolling back Biden era policies designed to shrink tailpipe emissions and encourage the sales of electric vehicles.

It’s not a legal “EV mandate,” but Biden’s rules amount to telling automakers they must somehow achieve at least 35 percent of their fleets being electric by 2032 to meet emissions goals. In line with a pattern from the first Trump administration, which rolled back Obama-era rules, the Trump team is reportedly telling the National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA) to reevaluate the standards.

But critics say dismantling these standards will slow U.S. EV adoption and favor traditional automakers over EV manufacturers like Tesla. A less stringent rule would make it less beneficial for Tesla, which sells emissions credits to non-compliant automakers and would see their value diminish. Rollback could set up a fresh feud between the administration and the EV pioneer, even after Tesla CEO Elon Musk’s professed allegiance to Trump.

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Automakers lobbied to dial back the Biden administration's emissions rules, which it finalised this spring - less stringent than initially proposed - though it remains to be seen if any states will move forward with lawsuits against the rules. General Motors, Ford, and Stellantis and other automakers have made big investments in EVs but have also complained about the lack of speed with which regulatory changes are being decided.

That rollback comes after reports that Trump’s team is also set to scrap a federal tax credit of USD 7,500 for EV buyers, which could slow EV adoption even further. The shifts in policy also mirror Trump’s first term, when it took much of the first three years to scale back Obama-era fuel-efficiency standards.

The move, industry analysts say, could please automakers grumbling at Biden’s regulations but could be an obstacle to long-term EV strategies. While Tesla has grown less reliant on regulatory credits for profitability, the broader industry faces uncertainty as the U.S. grapples with its EV transition amid shifting policies.

The proposed changes underscore the administration’s focus on prioritising traditional energy and automotive industries over green initiatives, signaling a dramatic shift in the nation’s environmental and economic policies.