Shifting Gears: How Trump’s Electric Vehicle Policy Rollbacks are Reshaping the Supply Chain

Federal policies that once played a critical role in promoting electric vehicle (EV) adoption and reducing emissions in the U.S. are now being unraveled under President Donald Trump.

In mid-June, the president signed congressional resolutions repealing U.S. Environmental Protection Agency (EPA) waivers for the Advanced Clean Cars II mandate, ending emissions restrictions in 12 states. Meanwhile, H.R. 1 — the federal funding bill — threatens to dismantle a wide range of incentives supporting EV production, sales, and infrastructure. Those policy changes include:

• Elimination of EV tax credits: The $7,500 federal tax credit for new EV purchases is set to end for most vehicles placed in service after December 31, 2025. Additionally, incentives for used EVs, commercial EVs, and home charging equipment are also being phased out.
• Rollback of emissions standards: The Trump administration has revoked the Biden-era goal of having electric vehicles comprise 50% of new car sales by 2030.
• Suspension of EV charging infrastructure funding: Federal funding for the development of new EV charging stations has been paused. This includes halting the distribution of billions of dollars allocated under the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) aimed at expanding the national EV charging network.
• Revocation of California’s emissions waiver: The administration has moved to revoke California’s waiver under the Clean Air Act. The waiver allowed the state to set stricter vehicle emissions standards than federal regulations. This action affects not only California but also other states that have adopted its standards.

Ongoing trade uncertainty has also disrupted the automotive industry. While the EV supply chain is exposed to automotive trade turbulence, EV batteries have their own supply chain and are exposed to their own supply chain vulnerabilities. The batteries themselves, many of which traditionally were imported to the U.S. from China, continue to face hefty tariffs. Tariffs were also placed on battery components, making imports and production more expensive for manufacturers.