John Bozzella (OICA): the future can only be electric

Financial incentives can boost purchases of electric or hybrid vehicles, but they vary considerably from state to state. The Trump administration is also threatening to abolish the $7,500 federal tax credit. The adoption of electric vehicles (EVs) is faster in coastal states, particularly in California and the Pacific Northwest, where consumers adopt new technologies more readily and benefit from more extensive charging station infrastructure. Other obstacles include the high cost of EVs compared with internal combustion engines and the accessibility of charging stations, which is crucial to reassure consumers, as well as the need to reduce production costs to bring prices down and attract new customers. Finally, dependence on lithium for batteries still poses challenges in terms of sustainability and security of supply.

In banning internal combustion vehicles by 2035, the State of California aims to reduce its dependence on fossil fuels, cut greenhouse gas emissions and combat climate change. This is a radical response to improving air quality, particularly in urban areas where vehicle pollution is a major problem. It is setting an example by encouraging other states to follow suit, thereby creating a wider movement nationwide. States such as New York have made commitments to ambitious electrification targets, although they have not yet invested in charging infrastructure. The State of California offers generous incentives for the purchase of EVs! It has already announced that it will include in its budget the $7,500 subsidy that Trump is set to abolish nationwide. EVs have a 25% market share in the state and are aiming for 35%.

Relations between the two countries are particularly important in the automotive industry, with interconnected supply chains. But tensions between the two governments are affecting the production and distribution of vehicles and parts: the Biden administration has increased customs duties on EVs, batteries, etc. from China by between 25% and 100%, depending on the sector. The United States imports large quantities of components from China. US protectionist policies are motivated by concerns about unfair competition and national safety, particularly with regard to data from connected vehicles. Competition for technological dominance is a key factor, with massive investment in electrification and innovation. Both countries are looking to strengthen their positions in areas such as artificial intelligence and electric vehicles. Trump's return to the White House promises a new wind of fierce protectionism, and not just against China, which will do nothing to ease tensions.

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