As EV sales surge and President Trump’s National Energy Emergency demands grid modernization, policy priorities clash between federal and state legislatures, setting the stage for a transformative time in America’s energy future
Headlines were dominated in recent weeks by stories about electric vehicles (EVs). The Trump Administration’s recent executive order to Unleash American Energy takes aim at renewable energy sources and financial incentives attached to EV purchases, while a Republican-controlled Congress has introduced legislation taking aim at federal tax credits for EVs and the subsidizing of EV charging stations.
This new policy direction comes at a time when EVs has surged in consumer popularity and as the American automaker and component supply chain invests heavily in a shift away from gas-powered vehicles.
Growth of the US EV market
EVs experienced a record sales growth of 52% in 2023 and despite a slowed pace in 2024, those totals were still above 2023’s numbers. The gap in sales over the last year was filled by plug-in hybrid electric vehicles (PHEVs).
The State of California holds tremendous influence over the automobile industry due to its market size and is currently the largest adopter of EVs — with one-third of all EV units nationally being sold in the state. California has held special authority from the Environmental Protection Agency to adopt stricter emission regulations than the federal government since the 1970s. The state received approval from the federal government toward the end of the Biden Administration to ban the sale of new gas-only vehicles starting in 2035. California Governor Gavin Newsom has pledged to revive its own Clean Vehicle Rebate Program should the federal tax credits disappear.
Indeed, transmission capacity is truly a bipartisan issue — traditionally left-leaning states are seeking increased transmission to support clean energy goals while traditionally right-leaning states are seeing data-center growth.
EV-maker Tesla (of whom the largest shareholder is Trump advisor Elon Musk) currently holds reign as the largest EV brand in the United States and generates more profit per vehicle than its rivals. (However, the brand has had a bumpy ride over the past several weeks — despite a filmed endorsement by President Trump — because of the link between the Telsa and Musk.) Further, the removal of a federal tax credit subsidy would impact rival brands like Ford and GM more greatly than Tesla. While most Tesla models did qualify for federal tax credits, not all models met component-sourcing requirements for their long-range variant batteries.
Market deterrents and charging needs
One of the biggest deterrents for Americans in considering an EV purchase is range anxiety — the concern about the distance an EV can cover from one charge. Less than 5% of car trips in the United States are longer than 30 miles and only 0.1% of car trips exceed 500 miles, but the anxiety persists. EVs require consecutive coverage of charging infrastructure accessibility between cities (a minimum number of fast chargers spaced fewer than 50 miles apart).
Charging options vary widely in the wattage they deliver and speed of charging. For example, a Level 2 EV charger (such as one might have in their home) can recharge a vehicle in four to six hours, whereas DC Fast Chargers offer a much faster charge by wattage. As the industry leader, Tesla deployed its own network of fast chargers across the United States in the early 2020s and has since qualified for significant federal subsidies by modifying their chargers to be adaptable to more EV brands. Currently, only Nevada and California meet state-level fast coverage metrics, with consecutive coverage areas being highest in New England, the West Coast, and Florida for state-level minimum coverage.
Many state legislatures have changed their own utility rules to allow for private businesses to own and operate EV and PHEVs charging stations, effectively offering retail sale of electricity to the public as a non-utility. Wisconsin and Nebraska were the final two of all 50 states to adopt these legislative changes, which were both passed early in 2024.
Interestingly, the US automobile industry and component supply chain has gone all in on EVs. Traditional automakers face substantial competition from Chinese automakers in the EV market globally, and the newly increased 20% tariff on Chinese imports also looms over auto manufacturers’ heads, which adds pressure to have a reliable domestic supply chain. While US-based EV battery factories numbered only two in 2019, more than 30 are planned, under construction, or operational this year.
Many state legislatures have changed their own utility rules to allow for private businesses to own and operate EV and PHEVs charging stations, effectively offering retail sale of electricity to the public as a non-utility.
States including Ohio, Georgia, Kentucky, Tennessee, Mississippi, and South Carolina have invested heavily in drawing EV assembly and battery production as new industry clusters. For example, Kentucky represents 6% of all automobile industry employees in the US, and the $5.8 billion BlueOval SK Battery Park (serving Ford and other automobile manufacturers) located in Glendale, Kentucky, will produce domestically-made EV batteries. Toyota, Ford, Honda, BMW, Daimler, Scout Motors, and Hyundai all currently or will soon assembly EVs within the US.
Energy emergency and utility grid investment
President Trump has declared a National Energy Emergency — the first ever presidentially-declared national energy emergency. In his inaugural address, President Trump encouraged increased domestic production of oil and gas and continued coal production — a noted de-emphasis on renewable energy sources. The US currently is a net exporter of fossil fuels and produces more oil and gas than any other country in the world and more than any point in American history. Where Trump’s call for energy investment holds bipartisan agreement is in the need to update and expand transmission capacity and the resiliency of American utility grid infrastructure.
The U.S. Department of Energy reports that the nation has a pressing need for additional transmission infrastructure. And while forecasted numbers for energy demand show it could potentially increase over the next 5 to 10 years, there is agreement that transmission capacity must be a high-priority for domestic utilities. This increased demand is also accompanied by more frequent severe and extreme weather which drives the need for grid modernization.
Indeed, transmission capacity is truly a bipartisan issue — traditionally left-leaning states are seeking increased transmission to support clean energy goals while traditionally right-leaning states are seeing data-center growth. Public utilities have at times blocked transmission buildout to protect the viability of gas and coal sources, but President Trump has promised to streamline permitting procedures for power grid enhancements. To meet projected demand, transmission lines would need to quintuple over the next decade, and that power would likely need to be sourced from a blend of renewable and non-renewable resources.
As the rapidly expanding EV market collides with shifting federal and state energy policies and as fossil fuel is prioritized by the Trump Administration, the automobile and supply chain markets continue to forge onward. Policymakers face urgent decisions to invest in their utility infrastructure and transmission investment, as well as energy source diversification to sustain future power demands.
You can find more about how companies are managing their supply chains here
