This US election is an EV referendum

Welcome to the first US presidential election of the EV era.

EVs — parked at the intersection of climate, labor, and fears about China — are a natural flashpoint in the US culture wars. Depending on your perspective, they either herald the low-carbon economy and a domestic manufacturing renaissance, or represent a handout to China and a pernicious threat to the all-American industries of Big Oil and Big Auto by overreaching coastal bureaucrats. With Biden and Trump offering starkly different choices about how and whether the energy transition should speed ahead, EVs will effectively be on the ballot in November.

EVs are a convenient shorthand for everything that’s right or wrong about the direction of the US economy, especially since they’re now — for the first time — common enough on roads to seem tangible to most Americans. And Americans seem to have conflicted feelings about them.

EV sales by most automakers are rising, up 36% in the second quarter compared to the same period last year and reaching about 7.5% of new car sales. But those sales are still concentrated among high-income buyers and rely on unsustainable, loss-making discounts that automakers are offering to get their EV divisions off the ground; without even steeper price cuts, sales could hit a ceiling soon, analysts say.

Yet Americans also seem to be souring on EVs in general. A Pew poll last month found that just 29% of Americans would consider an EV for their next vehicle purchase, down from 38% last year. And 58% said they oppose Biden administration policies aimed at expanding EV sales. That sentiment is easy for the Trump camp to capitalize on without any need to get into the complexities of trade policy or emissions: Biden supports EVs, and EVs, to people whose cultural identity is tightly bound up with gas stations and the roar of a big engine on the open road, are lame or even offensive. “Better get a long extension cord,” Rogers sneered in his RNC speech.

This is where Musk comes in. On the surface, his decision to back Trump seems ill-advised or even like a conflict of interest, as the CEO of a top EV maker. Tesla’s business benefits not only from the $7,500 EV tax credit Trump wants to scrap, but also from federal support for the EV charging networks that are a prerequisite for buyers, and from Inflation Reduction Act subsidies for battery manufacturers. Tesla, in its infancy, was also a major beneficiary of the Department of Energy’s Loan Programs Office, which Trump would assuredly gut.

Yet from Musk’s perspective, slamming the brakes on government support for EVs makes perfect business sense: His competitors need it more than he does. “Remove subsidies from all industries!,” he wrote on X this week. “It will only help Tesla.” Musk would rather command a higher margin on high-end EVs, even if confined to a relatively smaller customer base, than engage Ford and GM in a race to lower EV prices. And he can count on Trump as an ally in raising trade barriers with Chinese automakers, which are the competitors that really keep him up at night.