Buoyed by Trump, U.S. Dealers Optimistic on Everything Except Electric Vehicle Sales

As the dust settles on the 2024 U.S. presidential election, the automotive industry is taking stock of what a second Trump administration might mean for the sector. While dealers are optimistic about the potential impact of Trump's policies on the broader industry, there's one area where they're less enthusiastic: electric vehicle (EV) sales.

According to a recent survey by Cox Automotive, dealers are concerned about the new administration's policies on EV sales. The "Q4 2024 Dealer Sentiment Index" found that dealers are worried that the new administration's policies may not support EV sales, leading to a decline in the coming months. This concern is largely driven by the potential revocation of the $7,500 federal EV tax credit under the Trump administration.

The potential revocation of the EV tax credit could significantly impact consumer demand for electric vehicles. The tax credit has been instrumental in driving EV adoption, making EVs more affordable for consumers. Without this incentive, consumers may be less likely to purchase EVs, affecting demand.

Moreover, the relaxation of fuel and emissions regulations under the Trump administration could lead automakers to prioritize internal combustion engine (ICE) vehicles over EVs. This shift could result in reduced EV production, as automakers focus on more profitable ICE models. Consequently, EV prices may increase due to lower production volumes and potential tariffs on imported components.

A decrease in EV sales could also impact the demand for charging infrastructure and related services. The installation and maintenance of charging stations often rely on the number of EVs on the road. Fewer EVs mean less demand for charging services, potentially impacting the growth and profitability of companies in this sector.

However, it's essential to consider that the long-term trend towards EVs remains intact. Any slowdown in EV sales under a Trump administration may be temporary, as the shift towards electric vehicles is inevitable. Companies like ChargePoint and EVgo, which specialize in charging infrastructure, may face short-term challenges but could still benefit from the long-term shift towards EVs.

In conclusion, while U.S. dealers are optimistic about the potential impact of a second Trump administration on the broader automotive industry, they have reservations about the future of EV sales. The potential revocation of the EV tax credit, relaxation of fuel and emissions regulations, and decreased demand for charging infrastructure are all concerns that dealers are grappling with. However, the long-term trend towards EVs remains strong, and companies in the EV and charging infrastructure sectors are well-positioned to benefit from this shift in the future.