{"id":160216,"date":"2024-12-12T03:30:45","date_gmt":"2024-12-12T03:30:45","guid":{"rendered":"http:\/\/www.spglobal.com\/mobility\/en\/research-analysis\/automotive-industry-forecast-2025-tariffs-evs.html"},"modified":"2024-12-12T03:30:45","modified_gmt":"2024-12-12T03:30:45","slug":"fuel-for-thought-tariffs-taxes-and-evs-the-road-ahead-for-the-global-auto-industry","status":"publish","type":"post","link":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/2024\/12\/12\/fuel-for-thought-tariffs-taxes-and-evs-the-road-ahead-for-the-global-auto-industry\/","title":{"rendered":"Fuel for Thought: Tariffs, Taxes, and EVs: The Road Ahead for the Global Auto Industry"},"content":{"rendered":"

Listen
\nto the Fuel for Thought podcast<\/a><\/p>\n

As the automotive industry prepares for the potential
\nuncertainties of a second Trump administration, the global impact
\non electric vehicles (EVs), tariffs, taxes, and trade relations is
\nprofound. The president-elect's proposed policies, including tax
\ncuts, deregulation, tariffs, and changes to EV incentives, will
\nhave ripple effects on global automotive markets, especially in
\nNorth America and Europe.<\/p>\n

How these policies unfold will shape the future of battery
\nelectric vehicle (BEV) sales and global trade dynamics.<\/p>\n

Tax Cuts and Vehicle Affordability: A Double-Edged Sword<\/h2>\n

One of the cornerstone policies of a second Trump administration
\nis tax cuts, including making the reductions from the Tax Cuts and
\nJobs Act of 2018 permanent, eliminating taxes on tipped income,
\novertime and social security benefits and removing the cap on
\nstate\/local tax deductions. For businesses, he has pledged to
\nreduce corporate rate from 21% currently to 15%.<\/p>\n

While this could stimulate economic growth, disposable income,
\nand consumer spending in the short term, the long-term effects are
\nless certain. Higher demand, combined with potential inflationary
\npressure, could lead to higher borrowing costs, which would dampen
\nvehicle affordability.<\/p>\n

In North America, where 86% of US consumers rely on financing
\n(lease or loan) for new vehicles, the automotive market faces a
\ndelicate balancing act. If interest rates rise as the Federal
\nReserve takes action to combat inflation, the cost of car loans
\nwould increase, leading to higher monthly payments. This scenario
\nmay make consumers think twice before purchasing new vehicles,
\nincluding EVs, which typically carry higher upfront costs compared
\nto traditional internal combustion engine vehicles.<\/p>\n

\"US<\/p>\n

The Role of Tariffs: Disruptions and Trade Barriers<\/h2>\n

Trade barriers, particularly tariffs, are another potential
\ncritical aspect of the second Trump administration. Throughout his
\nfirst term, Trump used tariffs as a negotiating tool in trade
\ntalks, and these measures could escalate again, especially to
\noffset the costs of tax cuts.<\/p>\n

A proposed 10% tariff on imported vehicles from regions like
\nJapan, Korea, and Europe would directly impact 16% of US vehicle
\nsales. However, the more concerning aspect would be the potential
\nfor a 25% tariff on imports from Canada and Mexico, key trading
\npartners under the USMCA (United States-Mexico-Canada
\nAgreement).<\/p>\n

Approximately one out of every four vehicles
\nsold in the US comes directly from Canada or Mexico; those vehicles
\nwill be exposed to tariffs. Additionally, such tariffs would
\ndisrupt a highly integrated North American automotive supply chain,
\nwhich relies on parts and components flowing freely between the US,
\nCanada, and Mexico.<\/p>\n

With the US importing over $92 billion in
\nautomotive goods annually from these countries, a tariff increase
\nwould lead to production delays, higher manufacturing costs, and,
\nultimately, increased prices for consumers.<\/p>\n

\"US<\/p>\n

These disruptions would also extend to the broader global
\nmarket. For example, tariffs could complicate the global trade
\nenvironment, influencing vehicle pricing and production volumes in
\nEurope and Asia, especially as automakers increasingly look to
\nmanage production costs and consumer affordability.<\/p>\n

Deregulation and Its Impact on Battery Electric Vehicle
\nSales<\/h2>\n

A potentially more significant shift under a second Trump
\nadministration is the rollback of environmental regulations,
\nincluding fuel economy standards and incentives for BEVs. Under the
\nprevious administration, aggressive fuel economy standards and the
\npush for EV adoption were central to the automotive industry's
\nfuture. However, with the expectation of relaxed regulations,
\nautomakers may face less pressure to electrify their fleets.<\/p>\n

The National Highway Traffic Safety Administration (NHTSA) is
\nalready considering loosening fuel economy standards for model
\nyears 2027 and beyond, and the Environmental Protection Agency
\n(EPA) is likely to revise long-term carbon dioxide (CO2)
\nstandards.<\/p>\n

This deregulation could undermine the US market's previous
\ntrajectory toward electric vehicles. S&amp;P Global Mobility
\nprojections for US BEV sales by 2030 have been revised downward
\nfrom over 6.5 million vehicles annually to just 5 million. This
\nwould mean BEVs would account for only about 30% of the US market,
\nfar below the previously anticipated 40%.<\/p>\n

With less regulatory pressure, automakers may slow their EV
\ntransitions, potentially stalling the momentum that had built up in
\nthe industry.<\/p>\n

Beyond regulatory changes, the loss of consumer incentives for
\nBEVs could significantly hinder BEV sales. One particular area of
\nconcern is the “lease loophole” in the Inflation Reduction Act,
\nwhich allows consumers to lease electric vehicles at more
\naffordable rates, even if they don't qualify for purchase tax
\ncredits.<\/p>\n

If this loophole is targeted for elimination, or if overall
\nincentives are reduced, it could make BEVs even less accessible,
\nespecially as manufacturers may not have the same incentive to
\ndrive down prices or ramp up production.<\/p>\n

\"ICE<\/p>\n

The Broader Global Impact on EVs<\/h2>\n

In addition to the impact in North America, the global outlook
\nfor BEVs will be influenced by several geopolitical and economic
\nfactors. In Europe, where the automotive market is highly dependent
\non export growth, the outlook is modest, with expected
\nyear-over-year growth of just 1% in 2025.<\/p>\n

This growth is being constrained by trade issues, including
\nChinese vehicle tariffs, and the rising costs of subsidies for
\nBEVs. Several European nations have already suspended BEV
\nincentives to reduce government expenditures, which could slow the
\nshift toward electrification.<\/p>\n

With Europe's Big Five markets (Germany, France, the U.K.,
\nItaly, and Spain) accounting for roughly 65% of vehicle volume in
\nthe region, any dip in consumer incentives could have far-reaching
\neffects on EV adoption.<\/p>\n

Meanwhile, China's vehicle market is seeing an increasing shift
\ntowards domestic electric vehicle manufacturers. Western OEMs are
\nstruggling to maintain competitiveness as China-owned manufacturers
\nfocus on cost-effective new energy vehicles (NEVs).<\/p>\n

Across the overall automotive market in China, by the end of
\n2024, Western automakers will account for less than 38% of total
\nsales. This is a stark decline from over 60% prior to the COVID
\npandemic. The expiration of consumer incentives in late 2024 is
\nlikely to impact demand in China, but the market is expected to
\nrebound in 2025, with a modest 4% growth forecast.<\/p>\n

The Road Ahead: Global Uncertainty<\/h2>\n

The global automotive industry is facing a period of significant
\nuncertainty as it navigates the implications of a second Trump
\nadministration. In North America, tax cuts, rising interest rates,
\nand trade disruptions through tariffs will create an environment
\nwhere vehicle affordability may be compromised, even as the economy
\nshows signs of modest growth.<\/p>\n

Meanwhile, the possible rollback of EV incentives and
\nenvironmental regulations could slow the adoption of electric
\nvehicles, undermining efforts to shift toward a more sustainable
\nautomotive future.<\/p>\n

Across the Atlantic, Europe's automotive sector faces slow
\ngrowth and potential tariff issues, while China's market is
\nincreasingly dominated by local manufacturers. As a result, global
\nBEV sales projections have been adjusted downward, and automakers
\nmay face stiffer competition in both traditional and electric
\nvehicle segments.<\/p>\n

In this environment, the next few years will be critical for
\nautomakers to adapt to shifting trade policies, regulatory changes,
\nand consumer behaviors. The automotive industry's global transition
\nto electric vehicles is far from guaranteed, and any delays or
\ndisruptions will have ripple effects across markets worldwide.<\/p>\n

Navigating these changes requires agility and foresight, as the
\nindustry continues to grapple with both challenges and
\nopportunities in an ever-changing geopolitical landscape.<\/p>\n

Need help planning for an uncertain future? Access
\nour industry-best data and consulting services with our 2025
\nscenario planning workshops.<\/em><\/strong><\/p>\n

Inquire about S&amp;P Global
\nMobility's scenarios workshops<\/a><\/p>\n


\nSubscribe to the Fuel for Thought newsletter<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Listen
\nto the Fuel for Thought podcastAs the automotive industry prepares for the potential
\nuncertainties of a second Trump administration, the global impact
\non electric vehicles (EVs), tariffs, taxes, and trade relations is
\nprofound. The president-ele…<\/p>\n","protected":false},"author":2648,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-container-style":"default","site-container-layout":"default","site-sidebar-layout":"default","disable-article-header":"default","disable-site-header":"default","disable-site-footer":"default","disable-content-area-spacing":"default","footnotes":""},"categories":[3267],"tags":[61,122,127,129,124,128,125,132,131,133,126,130,123,66,94,88,97,56,64,65,60,3344,3351,3357,3360,3335,3340,3362,112,3353,40,75,95,3350,3352,3356,3343,3359,3339,3345,3334,3341,104,3354,33,120,3358,3349,3337,3348,105,101,98,115,30,29,41,86,3342,3361,70,69,68,72,71,26,118,108,87,3355,46,55,48,52,54,51,50,83,3338,62,58,57,3336,109,35,3346,59,63,85,79,82,96,80,27,81,114,44,42,43,45,38,39,110,117,100,111,116,3300,73,89,90,92,91,93,84,78,37,102,34,36,77,67,74,99,113,3347,119,28,121,32,47,49,53,103,31,76],"class_list":["post-160216","post","type-post","status-publish","format-standard","hentry","category-car-or-automobile","tag-airpods","tag-anime","tag-anime-characters","tag-anime-cosplay","tag-anime-edits","tag-anime-merchandise","tag-anime-movies","tag-anime-news","tag-anime-recommendations","tag-anime-reviews","tag-anime-series","tag-anime-streaming","tag-animes","tag-app-store","tag-app-store-samsung","tag-appgallery","tag-appgallery-oneplus","tag-apple","tag-apple-music","tag-apple-tv","tag-apple-watch","tag-auto-financing-guide","tag-automobile-industry-news","tag-automobile-laws-and-regulations","tag-automobile-shows-and-expos","tag-automobile-specifications","tag-automobile-technology","tag-autonomous-vehicles","tag-bbc-sport","tag-best-cars-for-long-drives","tag-best-mobile-games","tag-bixby","tag-bixby-xiaomi","tag-car-accessories","tag-car-comparison","tag-car-customization-ideas","tag-car-insurance-advice","tag-car-interior-design-ideas","tag-car-maintenance-tips","tag-car-resale-value","tag-car-reviews","tag-car-safety-features","tag-champions-league","tag-city-cars","tag-cyberpunk","tag-cyberpunk-2077","tag-driving-tips-and-tricks","tag-eco-friendly-cars","tag-electric-vehicles","tag-family-cars","tag-fantasy-football","tag-fifa","tag-football","tag-formula-1","tag-fortnite","tag-free-fire","tag-free-mobile-games","tag-freebuds-pro","tag-fuel-efficiency-tips","tag-future-of-automobiles","tag-galaxy-a52","tag-galaxy-note-20","tag-galaxy-s21","tag-galaxy-watch-4","tag-galaxy-z-fold-3","tag-game","tag-games","tag-golf","tag-harmonyos","tag-highway-cars","tag-how-to-backup-iphone","tag-how-to-factory-reset-iphone","tag-how-to-reset-iphone","tag-how-to-restore-iphone","tag-how-to-unlock-iphone","tag-how-to-unlock-iphone-5","tag-how-to-unlock-iphone-6","tag-huawei","tag-hybrid-cars","tag-ios","tag-ipad","tag-iphone","tag-latest-car-models","tag-live-soccer","tag-lol","tag-luxury-cars","tag-macbook","tag-macos","tag-mate-40-pro","tag-mi-11-lite","tag-mi-home-security-camera-basic-1080p","tag-mi-home-security-camera-basic-1080p-huawei","tag-mi-smart-band-6","tag-minecraft","tag-miui","tag-mlb-scores","tag-mobile-game-design","tag-mobile-game-development","tag-mobile-game-marketing","tag-mobile-game-monetization","tag-mobile-games","tag-mobile-gaming","tag-nba-scores","tag-nba-standings","tag-nfl","tag-nfl-scores","tag-nhl-scores","tag-off-road-vehicles","tag-one-ui","tag-oneplus","tag-oneplus-9-pro","tag-oneplus-buds-pro","tag-oneplus-nord-ce-5g","tag-oxygenos","tag-p40-pro-plus","tag-poco-x3-pro","tag-pokemon","tag-premier-league","tag-pubg","tag-pubg-mobile","tag-redmi-note-10-pro","tag-samsung","tag-samsung-pay","tag-soccer","tag-sports","tag-sports-cars","tag-steam","tag-steeam","tag-top-10-anime","tag-valorant","tag-when-do-the-iphone-7-come-out","tag-when-does-the-iphone-7-come-out","tag-when-is-the-iphone-7-coming-out","tag-world-cup","tag-xbox-series-x","tag-xiaomi"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/160216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/users\/2648"}],"replies":[{"embeddable":true,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/comments?post=160216"}],"version-history":[{"count":0,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/160216\/revisions"}],"wp:attachment":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/media?parent=160216"}],"wp:term":[{"taxonomy":"category","embeddable":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