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Electric vehicle charging at parking stalls in a downtown Seattle garage. (GeekWire File Photo / Kurt Schlosser)
For the past four years, the Biden administration revved up the adoption of electrical vehicles in the U.S., but President-elect Donald Trump campaigned on putting a stop to those efforts. Last week, media outlets confirmed one of his top targets — a $7,500 federal tax credit applied to the purchase of EVs — is on the chopping block.
While experts largely agree that Trump’s return to the White House will slow EV purchases in the U.S., how the different policies and market forces play out aren’t entirely clear.
Take the tax credit, for example. Eliminating this benefit requires congressional action, so it won’t happen instantly. Scott Case, CEO of Seattle’s Recurrent, a startup supporting used EV sales, has thoughts on what comes first.
“I actually think 2025 is going to be one of the biggest years for new and used EV sales that we’ve ever had,” Case said. “And the reason for that is nothing motivates people like the thing being taken away. All of a sudden there’s a deadline. People are going to be going crazy to try and get their purchases in.”
Also muddying the EV outlook are the recent investments in battery manufacturing and EV plants that are creating jobs in Republican-led states. Many suspect that GOP leaders won’t want to see changes to federal supports that could undermine those operations. Add to all of that the wild card that is Tesla founder Elon Musk and prognosticating gets even tougher.
“Given the President-elect’s relationship with Elon Musk, I think we should all take a wait-and-see approach to the actual federal policies,” said Dexter Turner, CEO of OpConnect, a Portland, Ore., startup focused on EV fleet charging.
The Kia EV9, an all-electric, three-row SUV, was showcased at last week’s Seattle International Auto Show. (GeekWire Photo / Kurt Schlosser)
The stakes are high. Transportation is the largest source of greenhouse gas emissions in the U.S., and President Biden set a goal of electric vehicles making up 50% vehicle sales by 2030. Researchers keep making stronger connections between carbon emissions and devastating natural events including wildfires, hurricanes and floods. Scientists warn that we’re on track for dangerous levels of warming.
The federal policies under the Biden administration also aimed to strengthen American automakers’ position in EV sales as China dominates the market. Changes now could undercut U.S. manufacturing efforts already underway, and weaken their ability to compete. Automakers have asked Trump to maintain Biden regulations promoting EV manufacturing, the New York Times reported today.
GeekWire checked in with five Pacific Northwest EV entrepreneurs to get their predictions on what comes next for electric vehicles. Here’s what they had to say on some key issues.
EV sales trends
Despite headlines about slowing EV purchases, battery-powered vehicles are still tracking for record sales this year, according to BloombergNEF. EVs will total 10% of sales in the U.S., and 20% globally, the research group projected.
Washington state trails just behind California in overall EV numbers. Last year, 19% of new cars registered in the Evergreen State were electric vehicles and plug-in hybrids. Washington recently ended a wildly popular program targeting lower-income drivers that issued roughly 6,100 rebates to make EVs more affordable to buy or lease.
Public programs and policies have bolstered EV sales and the deployment of charging infrastructure, pushing the sector into the “S curve” for EV adoption, Case said, meaning that sales keep ramping up.
At this point, “the market takes over,” he said, and incentives become less important.
While U.S. EV sales will slow, Matthew Metz, co-executive director of Coltura, a Seattle-based nonprofit advocating for EV use, predicted that they could make up around 20% of new car sales in the U.S. by 2028.
Sunesh Pamuru, principal engineer at Electric Era, working on the software for the startup’s EV chargers. (GeekWire Photo / Lisa Stiffler)
Different take on tax incentives
Quincy Lee, CEO of Seattle EV charging startup Electric Era, said that the removal of the federal EV tax credits could help sales, but for a different reason than Case gave.
He suggested that the credits created excess spending by the government, helping drive up inflation and interest rates. Cut some of that spending, the interest rates come down and the cars get more affordable. And people will buy them because they like them, Lee said.
“EVs are superior automotive products to [internal combustion engine] cars,” he said. “When you talk to drivers, the feedback is that they are being adopted due to their merits and that the tax credit is a cherry on top.”
Metz and Case said that tax incentives issued by states could continue curbing costs at the local level. Washington, for example, has a sales tax exemption for new and used EVs and some plug-in hybrids.
Charging infrastructure
The past few years has seen a surge in EV charger installations, bolstered by policies at local, state and federal levels.
The most ambitious effort is the National Electric Vehicle Infrastructure or NEVI program, which was established in 2021 to deploy public chargers every 50 miles along designated highways. The goal was to reach 500,000 chargers installed by the end of the decade. By August, 192,000 chargers were online.
The expectation is that the Trump administration will cut off those funds. Brian Grunkemeyer, CEO of FlexCharging, a Redmond, Wash., software startup that manages EV charging times, wished NEVI grants were issued much more quickly. The slower rollout was a “missed opportunity,” he said.
But other efforts will continue. Washington voters this month elected to save the Climate Commitment Act, a program that charges the state’s largest polluters for their emissions and directs the revenue to climate programs that include support for EV charging.
And retailers are increasingly installing chargers onsite. One study found that businesses with EV chargers saw more customer traffic and slightly higher sales. Walmart is has been installing chargers, and Electric Era recently deployed its chargers at a Washington Costco, outfitted with the retailer’s branding.
Significant charging infrastructure challenges remain. They include the high cost for fast charger installations, the need for electrical grid improvements and more clean energy coming online to support the increased power demands, and charging station reliability issues such as missing cables that are stolen for the copper they contain.
(Coltura Chart)
Favorable economics
Even without federal tax credits, EVs are increasingly affordable — particularly taking gas prices and maintenance costs into account.
“EVs have always been cheaper to operate than gasoline cars, and Tesla Model 3 and Model Y prices are below the average price for a new vehicle in the U.S.,” Grunkemeyer said.
Metz regularly analyzes electricity versus gas costs and finds that in nearly every state, it’s cheaper to fuel a vehicle with electrons than fossil fuels.
And Case is watching developments in batteries, which are the most expensive feature in an EV. Tech advances are driving their prices down and performance up.
A recent report from Goldman Sachs Research tracking the price declines predicts that from 2023 to 2026, the average battery cost could drop by almost half. That would “achieve ownership cost parity with gasoline-fueled cars in the U.S. on an unsubsidized basis,” the researchers said.
But there are still plenty of Americans who don’t want EVs due to concerns about range anxiety and access to charging, discomfort with the new technology, and the political divide over the vehicles.
Krista Cortese, in the background, and her husband Dominic purchased a new Nissan Leaf SV for $102 per month with a 3-year lease through the Washington EV Instant Rebates Program. (Photo courtesy of the Cortese family).
Widening divides
The Trump administration is expected to try to rollback policies to phase out the sales of gas-powered vehicles created by California and adopted by more than a dozen states including Washington and Oregon. The rule requires that all new vehicles sold are zero-emitting by 2035. It covers passenger cars, light-duty vehicles, and medium-duty vehicles such as larger pick-up trucks and SUVs. It does not apply to used vehicles.
California battled with Trump over these rules during his first administration, and the same will likely happen again.
“It’s safe to say that the states that were committed to zero emissions transportation will continue to be committed moving forward,” said Turner, “and that’s where we expect to make the most progress in deploying EV charging infrastructure.”
The end result of scuttled federal EV support means that more affluent U.S. consumers will be able to buy EVs regardless of tax credits and install their own charging systems in the absence of public stations.
Case worries about the entrenching of two Americas: one with emissions-free EVs and charging infrastructure, the other with fossil-fuel powered transportation and gas pumps.
“That’s just horrible, and it’s not fair,” said Case. “But that’s probably what happens the next four years.”
