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Introduction: "Whether it is Trump's idea of ​​abolishing electric vehicle policies or Biden's recent decision to impose tariffs on Chinese electric vehicles, both are 'bad ideas'."

(Text/Pan Yuchen, Editor/Gao Xin) "On my first day in office, I will repeal the mandatory electric vehicle policy." On July 18, former US President and Republican candidate for the 2024 US presidential election Trump, who had just escaped shooting, threatened at the Republican National Convention in Milwaukee.

He also said that this could save the U.S. auto industry, which is heading towards "complete destruction," and save American consumers thousands of dollars per car.

Trump also stressed that if he could not be elected president, the American auto industry would be "bloodbathed" by China.

Four days later, on July 22, the current President Biden announced his withdrawal from the 2024 election, and Trump's opponent in November became Harris - in the eyes of the former, the latter is easier to deal with than Biden.

Once Trump begins his second term as president, will the series of electric vehicle policies promoted by the Biden administration in the past come to an end? What impact will Trump's new policies have on the US and even global automotive industries? And how will Chinese automakers be affected?

Yu Xiang, a special expert at the Center for Strategic and Security Studies at Tsinghua University, told Observer.com that once Trump comes to power, he may change a series of policies including federal tax credits, federal subsidies and incentives, strict emission standards, infrastructure construction, and federal procurement, which will have a significant impact on the electric vehicle industry.

Can the electric vehicle policy be abolished in just one day?

"Electric vehicles have a short range, are expensive and bulky." Unlike current President Biden, Trump has made no secret of his disdain for electric vehicles. As early as 2020, during his last term, Trump pushed for the abolition of the automobile fuel consumption standards set by the Obama administration: under the original standards, automakers had to achieve an average fuel efficiency of 5% per gallon of gasoline; in the new cycle from 2021 to 2026, the standard was reduced to 1.5%.

"These (electric vehicle) expenditures are actually the new 'green scam.'" At the Republican National Convention last week, Trump reiterated that the strategy of developing electric vehicles is unworkable and will only harm the interests of American auto workers. Trump said he would save the money to build roads, bridges and dams. In contrast, Biden has made the shift to electric vehicles one of his top climate and industrial policies, and has set a goal of achieving 50% of new car sales as electric vehicles by 2030.

Regarding the electric vehicle mandate mentioned by Trump in his speech, the electric vehicle media electrek emphasized that the Biden administration has not actually issued a so-called "mandatory policy." In the past few years, the Biden administration has successively passed bills involving the new energy vehicle industry, such as the "Bipartisan Infrastructure Construction Act" and the "Inflation Reduction Act." Among them, the "Inflation Reduction Act" has the greatest impact, but it does not directly force the sale of electric vehicles.

The Bipartisan Infrastructure Construction Act passed in November 2021 involves multiple fields such as roads, bridges, railways, public transportation, and urban infrastructure, with a total value of more than 1.2 trillion US dollars. In December 2022, the US Department of Energy (DoE) announced the first batch of 20 new energy industry-related projects funded by the Act. A total of 20 US domestic companies participated and will receive a total of 2.8 billion US dollars in funding support.

The Inflation Reduction Act was passed by the US Congress in August 2022. Its main content includes an investment of approximately US$430 billion over the next decade, of which US$369 billion will be invested in the fields of climate and clean energy as subsidies to support the production and investment of electric vehicles, key minerals, clean energy and power generation facilities. The Inflation Reduction Act stipulates that American consumers can receive a total subsidy of 7,500 yuan for purchasing clean energy vehicles that meet the requirements, but it must be produced and sold in the United States or North America as a prerequisite.

In April 2023, the Biden administration released the details of the Inflation Act and announced a list of electric vehicles that can receive subsidies. Due to its strong protectionist color, the bill was strongly opposed by China, as well as US allies such as the European Union and South Korea as soon as it was introduced.

In addition, in March this year, the U.S. Environmental Protection Agency (EPA) also released the three-stage emission standards for light and medium-duty vehicles for the 2027-2032 model years, involving emissions of greenhouse gases, hydrocarbons, nitrogen oxides (NOx) and PM2.5 particulate matter. Taking greenhouse gases as an example, under the new standards, the industry average emission level of light vehicles by the 2032 model year is 85 grams of carbon dioxide per mile, which is nearly 50% lower than the current 2026 model year standard; the average emission target for medium-duty vehicles is 274 grams of carbon dioxide per mile by the 2032 model year, which will be a 44% reduction compared to the current standard.

According to EPA estimates, automakers can meet the 2032 requirements by increasing sales of pure electric vehicles to 56% of total sales, plug-in hybrid models to 13% of total sales, and traditional combustion engine models to 29% of total sales. It is expected that pure electric vehicle sales will account for 30%-56% of new light vehicle sales in the 2030-2032 model year.

Because the standard involves the interests of traditional energy companies, in June this year, the US oil and ethanol industry organizations filed a lawsuit to block the standard, saying that these limits "illegally" force automakers to sell electric vehicles. Trump also reiterated this point in his speech at the party congress.

Jameson Dow, a media person from electrek, wrote that the new EPA regulations do not actually require the sale of electric vehicles. Automakers can use any engine technology to meet the regulations, including smaller cars with smaller displacement, more efficient internal combustion engines, more hybrid vehicles, pure electric vehicles, hydrogen fuel vehicles, etc. EPA regulations do not require the use of any technology.

In addition, Jameson Dow believes that since the passage of the Inflation Act, automakers have pledged to invest $200 billion and created 237,000 jobs in electric vehicle-related manufacturing. Trump claims that abolishing the electric vehicle policy can "save American consumers tens of thousands of dollars per car", but in reality it will only cause American consumers to lose tens of thousands of dollars per car, and is more likely to lead to the decline of the American auto industry.

However, in his opinion, it is unlikely that Trump will end the EPA regulations in just one day as he claimed. He also sarcastically said that Tesla CEO Elon Musk had just pledged to donate $180 million to Trump's election, and Trump seemed to know nothing about what Tesla and Musk were doing.

However, at the Tesla shareholders meeting in June this year, Musk praised Trump in front of many Tesla fans and shareholders, saying that Trump often called him and was a "super fan" of Tesla's electric pickup Cybertruck.

Trump and Biden's similarities and personalities in the fight against Chinese cars

On the other hand, as a former initiator of the trade war, Trump shares common ground with Biden's current administration in preventing Chinese-made cars from entering the United States.

At the Republican National Convention last week, Trump highlighted that China is building large auto plants on the Mexican-U.S. border to produce cars for sale in the U.S. He hinted that he would push to amend the United States-Mexico-Canada Free Trade Agreement (USMCA) and impose tariffs of up to 200% on Mexican-made cars to prevent them from entering the United States.

Earlier in February this year, Reuters reported that BYD is seeking to build one of the largest local automobile factories in Mexico, with an annual production capacity of 150,000 vehicles.

This potential approach has also aroused opposition from industry insiders, because many fuel vehicle companies including General Motors, Ford, Mazda, Nissan and BMW produce cars in Mexico and sell them to the United States.

But when it comes to specific practices, Trump shows a stark difference from Biden: "These factories will be built in the United States in the future, and our people will work in these factories." His statement at the party congress showed that Trump is happy to see Chinese car companies build factories in the United States.

In fact, as early as March this year, Trump made similar remarks at a rally in Ohio: "Chinese companies think they can sell cars to Americans without hiring Americans. This is impossible. We will impose a 100% tariff on every car."

In contrast, the Biden administration is trying to shut out all cars related to the Chinese industrial chain and conduct extensive reviews of vehicles with ties to China.

On January 1 this year, the interpretation document of "sensitive foreign entities (FEOC)" in the "Bipartisan Infrastructure Construction Act" and the guidance on the ban on clean energy vehicle tax credits in Section 30D of the "Inflation Act" officially came into effect. According to the two sets of guidance, starting this year, American clean energy vehicles using battery components produced in China will not be able to obtain consumer purchase subsidies; starting in 2025, American clean energy vehicles using key minerals such as lithium, nickel, cobalt, and graphite imported from China will not be able to obtain the above subsidies. Nissan Leaf, Volkswagen ID.4 and some Tesla Model 3 models have also temporarily lost their tax credit qualifications because they use batteries from Chinese suppliers such as CATL.

In May this year, the Biden administration announced a 100% tariff on electric vehicles imported from China, and guided the European Union to impose additional tariffs on Chinese electric vehicles in June. In addition, in February this year, the Biden administration also announced an investigation into cars equipped with Chinese-made software, claiming that these software could endanger the data and security of American citizens.

In Yu Xiang's view, Trump is more inclined to relax restrictions on traditional fuel vehicles, but is open to Chinese automakers producing in the United States, which may give them more market access opportunities. Biden, on the other hand, is more supportive of the development of electric vehicles, but may set higher technical and market access barriers for Chinese-made cars.

He believes that the two have commonalities in terms of economy and employment, and both are concerned about the economic benefits and employment opportunities of the US auto industry. Although the methods are different, both hope to promote domestic manufacturing through policies. In addition, no matter who is in power, they may set certain market access conditions for Chinese auto companies.

He also said that changes in the US auto policy toward China may affect Europe and other markets. As an important global auto market and production base, Europe may refer to or adjust its auto policy toward China, especially in terms of environmental protection and trade. Other countries may also adjust their policies and trade conditions toward Chinese autos based on their own interests and market demand.

“Both ideas are bad ideas”

Suvrat Kothari, a writer for insideevs, believes that the issue of electric vehicles has been seriously politicized in the United States. On the contrary, Chinese automakers may be more pleased with Trump's remarks. He also specifically mentioned the history of Japanese automakers conquering the American auto market by building factories locally in the context of the US tariff suppression in the 1980s - to this day, Japanese cars still dominate the United States. Toyota even replaced General Motors and became the sales champion in the United States.

Today, China has surpassed Japan to become the largest automobile exporter. Kodali stressed that Chinese automakers and battery manufacturers can commercialize electric vehicles better than any other country, and maintain "iron control" over the upstream supply chain, so that the world's largest battery suppliers, such as CATL, are Chinese companies.

In Jameson Dow's view, both Trump's idea of ​​abolishing the electric vehicle policy and Biden's recent decision to impose tariffs on Chinese electric vehicles are "bad ideas."

He stressed that in the past few years, the quality of cars produced by Chinese automakers has greatly improved, and the export of electric vehicles to the global market has accelerated. The most important reason is that China has taken concerted efforts at all levels to build and expand the electric vehicle industry as a strategic move for the future automotive industry - from securing mineral partnerships through the Belt and Road Initiative to building its world-leading mineral refining capabilities, to subsidizing domestic manufacturing and promoting the vigorous development of Chinese electric vehicle companies.

"Imposing tariffs on China is not the way to win the electric vehicle arms race - taking the electric vehicle industry seriously is," Jameson Dow wrote. He emphasized that if the United States wants to compete with China, it cannot bury its head in the sand like an ostrich: "No company will win by ignoring competition or market conditions. Because the market exists objectively, not according to the subjective wishes of Trump or Biden."

"Repealing relevant regulations will only give traditional automakers a false sense of security and lead to their downfall." Jameson Dow believes that "surrendering and refusing progress" is the best way to ensure the demise of the American auto industry.

In the face of possible changes in the situation, Yu Xiang told Guancha.com that Chinese automakers should adopt a variety of coping strategies: first, improve their own level through technological innovation to meet the stricter emission and safety standards of various countries; second, expand their layout in other global markets to reduce dependence on a single market; in addition, they can also increase market access and localized production capacity through joint ventures, mergers and acquisitions, and overseas factory construction. At the same time, strengthen brand building and market promotion to enhance brand influence and consumer recognition.

In his view, despite policy uncertainties, Chinese automakers still have opportunities to enter the US market, especially in the context of the Trump administration's possible relaxation of market access. Through technological and quality improvements, Chinese automakers have the ability to gain a foothold in the global market and continue to explore and enter developed countries, including the United States.

This article is an exclusive article of Observer.com and may not be reproduced without authorization.