Trump Administration's EV Regulation Overhaul Causes Headache for Rivian, Tesla, and Lucid

Tesla, Rivian, and Lucid face significant losses due to the Trump administration's overhaul of EV regulations, which is gutting the regulatory credit scheme. The three companies profit from selling credits to rivals, with Tesla pulling in nearly $3 billion last year. Rivian estimates that regulatory changes have put $100 million in revenue in limbo, while Lucid warns that the changes threaten to reduce the market value of regulatory credits, which make up a "significant share" of its revenue.

The Trump administration's overhaul of EV regulations is causing significant financial losses for Tesla, Rivian, and Lucid. The changes, which include the suspension of compliance letters and the reduction of penalties for fuel economy non-compliance, have disrupted the regulatory credit market, which these companies rely on for revenue.

Tesla, Rivian, and Lucid generate substantial profits by selling regulatory credits to rivals who fail to meet environmental regulations. The regulatory credit scheme has been a significant revenue stream, with Tesla pulling in nearly $3 billion last year [1]. However, the Trump administration's changes have put this revenue in limbo. The National Highway Traffic Safety Administration (NHTSA) has halted the issuance of compliance letters, which are essential for monetizing these credits.

Rivian estimates that the regulatory changes have put $100 million in revenue in limbo [2]. The company's Senior Director of Public Policy, Christopher Nevers, stated that the NHTSA has stopped processing compliance reports until it completes its overhaul of federal fuel economy standards. Lucid, another EV startup, warns that the changes threaten to reduce the market value of regulatory credits, which make up a "significant share" of its revenue [2].

The regulatory overhaul has also exposed Tesla's reliance on the credit market. In its latest earnings report, Tesla warned that the repeal of US federal regulatory credit schemes had contributed to a $1.11 billion decrease in expected revenue [2]. The company anticipates that future revenue may be significantly affected by the changes.

The Zero Emission Transportation Association (ZETA) has filed a petition in the U.S. Court of Appeals seeking to compel NHTSA to reinstate compliance letter issuance [1]. The association represents Tesla, Rivian, and Lucid, among other EV manufacturers. However, NHTSA has not provided a timeline for when compliance letters will resume.

The regulatory changes also coincide with the pending expiration of the $7,500 federal EV tax credit on September 30, 2025. These developments threaten to further slow EV adoption and dealer momentum.

References:
[1] https://www.autobodynews.com/news/ev-makers-anticipate-billions-in-revenue-loss-as-fuel-economy-credit-program-halted
[2] https://www.businessinsider.com/rivian-tesla-lucid-face-big-losses-after-ev-regulation-overhaul-2025-8