As the administration of U.S. President Joe Biden ends when President-elect Donald J. Trump takes the oath of office on January 20, many changes are set to take place the moment he utters the words “So help me God.”
Trump’s return to the Oval Office is set to shake up the automotive industry.
His transition team and Trump himself revealed plans to implement tariffs on imported vehicles from certain countries and roll back fuel economy standards implemented by his predecessor.
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One segment under scrutiny is EVs. On November 14, sources close to Trump’s transition team told Reuters that the incoming president plans to kill the $7,500 consumer tax credit for EV purchases enabled by the Inflation Reduction Act.
Such a move has sparked backlash. In an act of political defiance, California Governor Gavin Newsom announced 11 days later that if the Trump Administration follows through, the state of California will reintroduce a program that will provide eligible buyers up to $7,500 for the purchase of a new EV.
As politics creates a shaky environment for EV buyers, new reports suggest that this uncertainty is driving buyers to scoop up what they can before new models become more expensive.
Electric vehicles (EV) for sale at the Lafontaine Kia dealership in Detroit, Michigan, US
‘Last hurrah’ EV sales helped boost 2024 new car sales growth
According to a recent Bloomberg report, motivated EV buyers looking to take advantage of current incentives and offers for EVs helped boost total U.S. new car sales in the last months of 2024.
For American brands like General Motors GM, sales of EVs contributed to double-digit gains across most of its brands; including a 17% jump at Chevrolet, 33% at GMC, and 35% at Cadillac.
In total, the automaker’s EV sales across its portfolio of brands rose 50% in Q4 2024 and 12% throughout the year. Combined with its gas cars, 2024 was GM’s best year since 2019, with U.S. sales topping 2.7 million cars.
Over at another consumer-focused brand, the Hyundai-linked South Korean automaker Kia, EV sales experienced a huge jump in 2024. According to its latest figures, sales of Kia’s diverse range of EVs saw a 74% increase in 2024, accounting for 7% of its total volume.
“Kia has solidified its leadership position within the EV market,” Kia North America and Kia America president and CEO Sean Yoon said in a statement. “Our strategy is working to further elevate the Kia brand and the potential for sustained growth in the U.S. market.”
At the same time, the Elon Musk-led Tesla (TSLA) , the overall EV sales leader, announced sales figures that fell short of estimates. According to Tesla, it delivered 495,570 vehicles; a 2.3% jump from last year, however, it also noted that it sold a total of 1.79 million vehicles last year, a 1.1% dip from 2023.
Related: Hybrid car sales are driving growth ahead of EVs
Hybrids are still the name of the game for other automakers
Though some companies saw quarterly successes with their EV offerings, one EV-adjacent segment has proven to be a continued sales success.
Ford (F) experienced a 16% jump in EV sales in Q4 2024. However, it saw a 27% jump in sales of hybrid-electric vehicles, contributing to an 8.8% sales gain in Q4 2024. In its statement, the Blue Oval says that it sold 35% more EVs (97,865 units) and 40% more hybrids (187,426 units) compared to 2023, a new record for the company.
Meanwhile, Kia’s stablemate, Hyundai (HYMTF) , recorded what it called ‘record-breaking’ December 2024 sales, a feat that Hyundai Motor North America CEO Randy Parker attributes to “offering consumers a variety of product and powertrain options that fit their needs.”
The automaker reports that in December 2024, EV sales jumped by 13%, while hybrid sales jumped by 79%. The jump linked to its hybrids is led by ballooning sales of specific models, like the Santa Fe HEV (which grew by 87%) and the Tucson HEV (133% increase).
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Forecasters do not see fair weather for EVs in 2025.
Overall, the jump in EVs and other electrified vehicles has made a dent in overall car sales.
According to data from Cox Automotive, Baum & Associates, Wards, and J.D. Power, forecasters’ average estimates show that new car sales will average at around 15.9 million cars, up from 15.5 million in 2023.
But while EVs have zapped a little bit of life in 2024, experts aren’t confident that there is enough juice for EVs to boost new car sales into 2025, given the tumultuous political uncertainty that may drive consumers to more attractive options like hybrids or conventional gas-powered cars.
As per J.D. Power, just 25% of buyers visiting showrooms and obsessing over car configurators are actually considering the plug over the pump. Additionally, Cox Automotive chief economist Jonathan Smoke noted that the “urgency” fueled by Trump’s “threats and worries” will eventually come and go.
“That’s true in overall purchase activity, and it’s also very much true to the EV story.”
Related: Veteran fund manager issues dire S&P 500 warning for 2025
