Republican Senator-elect Bernie Moreno, formerly a luxury car dealer, is now making significant waves in the automotive arena. His victory over Democrat Sherrod Brown in Ohio, a state crucial to the manufacturing sector, has positioned him to influence automotive policy, especially regarding electric vehicles (EVs).

Moreno's Stance on EVs Challenges the Status Quo

Positioning as an Automotive Voice

Moreno, with his background in the automotive industry, is determined to have a say in shaping the future of the sector. He believes that the Senate should play a crucial role in guiding automotive policies. "We have the opportunity to make a real impact on the automotive industry," he said. "Our decisions will shape the kind of cars that Americans drive and the future of the manufacturing sector."

After emerging victorious in Ohio, Moreno sees his role as a leader who can bring about positive change. He is committed to working with his colleagues to ensure that automotive policies are in the best interest of the country. "We need to look at the long-term implications of our decisions," he added. "It's not just about today; it's about the future of our children and grandchildren."

Criticism of the Federal EV Tax Credit

At the 2024 CNBC CFO Council Summit in Washington, D.C., Moreno made his stance on the federal EV tax credit clear. He called it "catastrophically stupid" and argued that it unfairly distorts the market. "The tax credit is a double-edged sword," he said. "It may seem like a good idea in theory, but in practice, it creates more problems than it solves."

Moreno dismissed claims that the incentive helps U.S. automakers compete with Chinese EV manufacturers, labeling the argument as "nonsense." He believes that the market should determine which cars are popular, not government subsidies. "If a car is good, people will buy it," he said. "We shouldn't be picking winners and losers in the automotive industry."

Shifting Industry Dynamics

Major automakers are currently recalibrating their EV strategies as consumer demand for EVs has shown signs of cooling. Once seen as the industry's future, EVs are now facing challenges. Manufacturers like Ford, General Motors, Mercedes-Benz, and Volkswagen have announced delays or scale-backs in their EV rollouts.

"What we saw in '21 and '22 was a temporary market spike," said Marin Gjaja, COO of Ford's EV division. "The market is now adjusting to more realistic expectations. We need to be flexible and adapt to these changes."

Automakers are shifting their focus towards diversified lineups, including hybrids, to meet the changing needs of consumers. This shift reflects a growing recognition that not all consumers are ready to make the switch to electric vehicles just yet. "We need to offer a variety of options to give consumers the choice they deserve," said Gjaja.

Marketplace Over Mandates

Moreno advocates for reducing government intervention in the automotive market. He believes that a favorable business environment can be created through good taxes, regulations, and skilled workers. "The marketplace should be allowed to operate freely without unnecessary government interference," he said.

He also criticized how the EV credit excludes commercial vehicles and comes with MSRP restrictions, arguing that it disproportionately benefits wealthier consumers. "We need to ensure that our policies are fair and equitable," he added. "Everyone should have access to the benefits of clean energy, not just the wealthy."

A Broader Policy Shift

Moreno's stance aligns with that of other Republican leaders, such as Vivek Ramaswamy, who co-leads President-elect Trump's Department of Government Efficiency (DOGE). Ramaswamy has announced plans to review government spending related to electric vehicles, including a loan commitment from the Department of Energy to Rivian Automotive.

This growing skepticism around EV incentives signals a broader industry pivot. While EV sales are still expected to grow, the market is recalibrating to reflect consumer preferences for mixed powertrain options. Moreno's push to eliminate the EV tax credit highlights the ideological divide about the role of government in shaping automotive innovation and market trends.

"We need to find a balance between promoting clean energy and respecting the free market," said Moreno. "Our policies should encourage innovation while also considering the needs of all Americans."