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Gameplan for Auto Industry Under Trump: Stay FlexibleGameplan for Auto Industry Under Trump: Stay Flexible
Whether it is rolling back emissions mandates or imposing tariffs, automakers seek unprecedented flexibility in operations to achieve profits.
4 Min Read
Automakers, including GM, say they are staying the course on EVs despite emission standards rollbacks in the offing. Cadillac Optiq is among GM's EVs.
The announcement by the Environmental Protection Agency (EPA) on March 12 regarding the proposed [[I think these are proposed?]] rollback of over 30 environmental regulations, including those targeting vehicle emissions and fuel efficiency standards, is going to have significant implications for automotive companies' product planning.
Automakers are reassessing their EV, Plug-in Hybrid (PHEV), Hybrid (HEV) and Hydrogen Fuel Cell (FCEV) development timelines and investment levels. The previous stringent emissions standards had accelerated the shift towards EVs; with these regulations now under reconsideration, companies may slow down, but certainly not eliminate, their electrification strategies and plans.
With relaxed emissions standards coming, manufacturers could extend the lifecycle of ICE vehicles, potentially delaying the phase-out of fossil fuel-powered models., thus enhancing their profit return on ICE vehicles while they take smaller gains or even losses on BEVs.
Though BEV vehicle demand, without significant incentives, is slowing, consumer demand for cleaner, more fuel-efficient vehicles remain robust, influenced by environmental awareness, state-level regulations, emissions targets in markets outside the U.S. and as a hedge against volatile gas prices.
Companies must balance federal rollbacks with regional policies and consumer preferences. European and Asian markets continue to enforce strict emissions standards. U.S. automakers aiming to compete globally must consider these international regulations in their product planning.
Automotive industry leaders and analysts emphasize the critical importance of sustained investment in battery electric vehicles (BEVs) to maintain global competitiveness, especially considering the potential transient nature of U.S. policies under President Donald Trump.
"We still believe in an all-electric future, “GM CEO Mary Barra said recently. Barra reiterated GM's dedication to phasing out internal combustion engine vehicles by 2035. This aligns with GM's broader vision of achieving carbon neutrality by 2040.
Barra says GM's electric vehicles are now "variable profit positive," meaning revenues from EV sales are beginning to cover fixed manufacturing costs. This marks a pivotal step toward the company's financial goals in the EV sector.
To bolster its EV strategy, GM has entered into a $3.5 billion partnership with Samsung SDI to construct a battery plant in Indiana, capable of producing batteries for up to 500,000 all-electric vehicles annually. This investment underscores GM's commitment to securing a robust supply chain for its EV production.
Hyundai is making strides in the EV sector. The company plans to offer 21 different EV models by 2030, aiming for annual sales of 2 million units.
President Trump's proposal to eliminate the $7,500 EV subsidy poses a substantial challenge. Analysts view 2025 as a pivotal year for GM's momentum.
Flexible Platforms
Developing adaptable vehicle platforms that can accommodate both ICE and electric powertrains will allow manufacturers to respond swiftly to regulatory changes and market demands over the next four years.
Mercedes-Benz, for example, has introduced the Mercedes-Benz Modular Architecture (MMA), an "electric-first" platform designed to support ICE, hybrid, and EV models. The upcoming CLA sedan will be the first to utilize this platform, debuting as an EV in 2025, followed by an ICE hybrid variant in 2026.
The Renault–Nissan–Mitsubishi Alliance developed the Common Module Family (CMF), a modular architecture encompassing various platforms such as CMF-A, CMF-B, CMF-C/D, and CMF-EV, supporting both ICE and electric powertrains.
The Toyota New Global Architecture (TNGA) is a modular platform that accommodates different vehicle sizes and configurations, including front-wheel drive, rear-wheel drive and all-wheel-drive setups, supporting both ICE and electric powertrains.
Stellantis unveiled the STLA Frame platform, designed to support the assembly of gasoline, hybrid, and electric vehicles, particularly full-size trucks and SUVs.
In November 2024, after the election, the Alliance for Automotive Innovation, representing major automakers, urged President-elect Trump to maintain the $7,500 electric vehicle tax credit and uphold consistent emissions standards. “Our industry can do just about anything. What we always ask for is consistency and stability of regulation phase in to give our members enough time to respond.” Alliance CEO told WardsAuto last year. Bozella’s team successfully got the Biden Administration to soften a previously stated mandate that would have required automakers to make two-thirds of the new vehicles they sell BEVs by 2032. “They listened to us,” Bozella says. “We presented a sound and detailed response, and they listened. That’s how it supposed to work,” said Bozella.
NHTSA said in June the rule for passenger cars and trucks would reduce gasoline consumption by 64 billion gallons through 2050 and cut emissions by 659 million metric tons. It said while some vehicles would be more expensive to buy, consumers would save on fuel costs and estimated net benefits of $35.2 billion.
Progress Through Regulations
Clean-air regulations have driven the development of cleaner propulsion systems for 50 years.
Manufacturers have adopted engine downsizing strategies, replacing larger engines with smaller, turbocharged ones that maintain performance while enhancing fuel efficiency. For instance, Ford's introduction of the 1.0-liter EcoBoost engine in the Focus model exemplifies this trend.
Since the 1970s, vehicles have become 99% cleaner concerning pollutants like hydrocarbons, carbon monoxide, nitrogen oxides and particulate emissions, according to the Environmental Protection Agency. This significant reduction is attributed to the implementation of the Clean Air Act of 1970 and subsequent amendments.
A central focus of Trump’s policy push is revocation of the 2009 endangerment finding, which classifies greenhouse gases as harmful to public health and underpins many climate-related regulations.
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