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Mr. Trump and Republicans in Congress say they plan to eliminate most of the federal aid for electric cars and trucks and reverse emissions rules, raising doubts about the future of such vehicles and the billions of dollars that automakers have invested to design and build them.
Still, many auto experts say market forces and technological progress will ultimately drive a long-term transition to electric vehicles regardless of how far Republicans go in undoing President Biden’s climate agenda.
Prices of batteries, the most expensive part of an electric vehicle, are falling fast. Already, many electric cars cost no more to own than comparable gasoline models when savings on fuel and maintenance are taken into account.
Technology is improving rapidly. Batteries are becoming lighter and smaller while allowing faster charging and longer travel distances. And more than 12,000 high-voltage public chargers were added in the United States in 2024, a 33 percent increase from the year prior, according to Rho Motion, a research firm.
Automakers have a strong financial interest in promoting electric vehicles no matter who is in the White House. They need to earn a return on the investments they have made in production facilities. And failing to keep up with the technology could make them vulnerable to emerging Chinese competitors that are all-in on electric vehicles.
“No matter what policy changes are brought forward by the new administration we will abide by them and will adjust accordingly,” Randy Parker, chief executive of Hyundai Motor America, told reporters during a conference call last week.
“Make no mistake about it,” he added, “we’re committed to electrification.”
Hyundai recently began producing its popular Ioniq 5 car at a new $7.6 billion factory near Savannah, Ga. That car and a large electric sport utility vehicle are the first from the South Korean automaker that will qualify for a $7,500 federal tax credit. The factory complex, which will employ 8,500 people including at Hyundai’s suppliers once it reaches capacity, is one of the biggest examples of the jobs and investment that electric vehicles have generated.
There’s little doubt that sales of cars powered by batteries, which generally cost more upfront than comparable gasoline cars, will take a hit if Republicans repeal the Inflation Reduction Act, the legislation that includes the $7,500 credit and subsidies for battery manufacturing, charger installation and electric school buses. On average, an electric car in the United States sold for $55,105 in 2024, compared with $48,165 for a gasoline car, according to Cox.
But the price gap is half what it was two years ago. Several more affordable models are arriving this year, and many analysts expect electric vehicles to cost the same or less than combustion engine cars by the end of the decade.
General Motors sells an electric Chevrolet Equinox for around $35,000 and plans to revive the Chevrolet Bolt this year at a lower price. Later this year, Honda will begin producing electric cars in Ohio. The Japanese company has not announced a price but is known for affordable vehicles.
Tesla has said it will begin selling a less expensive vehicle by the middle of the year but has provided few details. Later this year, Volvo plans to begin selling a version of its EX30 that is expected to cost less than $37,000.
“We are going to be able to drive the cost of E.V.s to lower than internal combustion engine vehicles,” said Kurt Kelty, a G.M. vice president in charge of batteries. “That’s what we’re aiming for.”
Sales of electric vehicles (EVs) in the U.S., according to the latest counts from Cox Automotive’s Kelley Blue Book, jumped 15.2% year over year in the fourth quarter of 2024 to 365,8241, setting a new volume record for any quarter.
Battery prices saw their biggest annual drop since 2017. Lithium-ion battery pack prices dropped 20% from 2023 to a record low of $115 per kilowatt-hour, according to analysis by research provider BloombergNEF (BNEF). Factors driving the decline include cell manufacturing overcapacity, economies of scale, low metal and component prices, adoption of lower-cost lithium-iron-phosphate (LFP) batteries, and a slowdown in electric vehicle sales growth. This figure represents a global average, with prices varying widely across different countries and application areas.
Over the past two years, battery manufacturers have aggressively expanded production capacity in anticipation of surging demand for batteries in the EV and stationary storage sectors. Currently, overcapacity is rife, with 3.1 terawatt-hours of fully commissioned battery-cell manufacturing capacity globally. That is more than 2.5 times annual demand for lithium-ion batteries in 2024, according to BNEF. While demand across all sectors saw year-on-year growth, the EV market – the biggest demand driver for batteries – grew more
