DAVID BLACKMON: America’s EV Industry Must Now Compete On A Level Playing Field

America’s carmakers face an uncertain future in the wake of President Donald Trump’s signing of the One Big Beautiful Bill Act (OBBBA) into law on July 4.

The new law ends the $7,500 credit for new electric vehicles ($4,000 for used units) which was enacted as part of the 2022 Inflation Reduction Act as of September 30, seven years earlier than originally planned.

The promise of that big credit lasting for a full decade did not just improve finances for Tesla and other pure-play EV companies: It also served as a major motivator for integrated carmakers like Ford, GM, and Stellantis to invest billions of dollars in capital into new, EV-specific plants, equipment, and supply chains, and expand their EV model offerings. But now, with the big subsidy about to expire, the question becomes whether the U.S. EV business can survive in an unsubsidized market? Carmakers across the EV spectrum are about to find out, and the outlook for most will not be rosy.

These carmakers will be entering into a brave new world in which the market for their cars had already turned somewhat sour even with the subsidies in place. Sales of EVs stalled during the fourth quarter of 2024 and then collapsed by more than 18% from December to January. Tesla, already negatively impacted by founder and CEO Elon Musk’s increased political activities in addition to the stagnant market, decided to slash prices in an attempt to maintain sales momentum, forcing its competitors to follow suit.

But the record number of EV-specific incentives now being offered by U.S. dealers has done little to halt the drop in sales, as the Wall Street Journal reports that the most recent data shows EV sales falling in each of the three months from April through June. Ford said its own sales had fallen by more than 30% across those three months, with Hyundai and Kia also reporting big drops. GM was the big winner in the second quarter, overtaking Ford and moving into 2nd place behind Tesla in total sales. But its ability to continue such growth absent the big subsidy edge over traditional ICE cars now falls into doubt.