President-elect Donald Trump's nominees for key departments could have a significant impact on the government's support for electric vehicles. Will their actions lead to a shift in the auto industry and the global fight against climate change?

Unraveling Trump's Influence on the EV Agenda

Energy Department's Role

If confirmed as Energy secretary, Chris Wright would oversee the Loan Program Office with a budget of over $6 billion for loan guarantees, mostly to battery-makers and materials miners. He would also control a $2 billion program to convert older factories into EV facilities and $6 billion in grants for companies building battery components and recycling end-of-life batteries. This could potentially curtail the government's support for electric vehicles and redirect resources.

During the first Trump administration, the Loan Program Office lay mostly dormant. But under Biden, it has thrived, leveraging the $6 billion from the Inflation Reduction Act to create more than a dozen loans worth tens of billions of dollars. Now, the question is what Trump and Wright will do with this office in a rapidly changing energy landscape.

Trump's "Department of Government Efficiency" also throws a wild card into the equation. The external advisory commission, headed by pharmaceutical entrepreneur Vivek Ramaswamy and Tesla CEO Elon Musk, aims to slash $2 trillion in federal spending and downsize the federal workforce. Musk has suggested ending all subsidies that support one form of transportation over another, which could have implications for the EV industry.

Transportation Department's Influence

Sean Duffy, Trump's pick for the Department of Transportation, would helm an agency that plays a crucial role in regulating emissions from cars and trucks. The Department sets the Corporate Average Fuel Economy (CAFE) standards, which complement the emissions standards set by the EPA. Under Transportation Secretary Pete Buttigieg, DOT wrote a five-year plan to boost fleetwide fuel economy.

However, the Trump transition team has said the incoming administration plans to roll back the latest CAFE standards, which would involve a months-long process. DOT also presides over a $7.5 billion program to place EV chargers along major highways and seed local EV networks. But it's unclear how much EV-related funding Trump could claw back.

Options to roll back federal EV support include blocking loans and grants for EV chargers, factories, and battery plants that haven't been fully approved. For instance, at least six of the Loan Program Office's EV-related loans still have only conditional approval. Wright or Duffy could also prevent EV policy through inaction, such as declining to staff relevant agencies when vacancies arise.

Redirecting EV Efforts

Duffy and Walsh could redirect Biden's EV efforts by broadening them, reducing special support for EVs. One example is the Joint Office of Energy and Transportation, which bridges the knowledge gap between DOT and DOE. It has focused on serving as an information clearinghouse for state departments of transportation building EV-charging networks.

However, there are concerns that a Trump administration could use this office to provide technical assistance to fuel types across the board, rather than focusing solely on EVs. Some of Biden's EV investments are "lockboxed," making it difficult to extract the funds. For example, the Charging and Fueling Infrastructure (CFI) program is funded through 2028 and requires Congress's sign-offs to remove remaining funding.

Despite the challenges, the NEVI program remains a significant part of the effort to build a national highway EV-charging network. Republicans have criticized the program, but their claims are based on misinformation. In the short term, the auto industry may switch to building hybrids, which are more profitable and popular with American drivers.

Hybrids are more fuel-efficient than conventional internal-combustion vehicles and may be the best way to cut pollution from the transportation sector in the near term. But the long-term future of electric vehicles remains uncertain in the face of Trump's policies and the changing energy landscape.