According to Zhixin Finance, incoming President Trump has threatened to eliminate tax credits for electric vehicles, which could provide a much-needed boost to plug-in vehicles, part of a significant increase in auto sales at the end of the year after a disappointing year. According to projections from the research institution Cox Automotive, electric vehicle sales in the USA in the fourth quarter of 2024 increased by 12%, reaching a record annual sales of 1.3 million units. This figure exceeds the 8% growth rate of the previous quarter. Plug-in vehicles account for about 8% of the USA auto market, slightly above the levels from a year ago.

The strong performance of electric vehicle sales in the fourth quarter also contributed to an increase in total auto sales compared to the same period last year. According to the average forecast of four researchers, the annualized sales in 2024 will rise from 15.5 million units a year ago to 15.9 million units.

However, the surge in electric vehicle sales is not expected to last until 2025. This current surge in sales is mainly due to USA consumers rushing to make purchases before Trump’s re-election, as buyers anticipate that the policy changes advocated by Trump will make electric vehicles more expensive. Data from JD Power shows that only a quarter of new car buyers consider electric vehicles for their next purchase, a decline of two percentage points from a year ago.

Jonathan Smoke, chief economist at Cox Automotive, said during a conference call with reporters last December that "threats and concerns" fueled a "sense of urgency to buy"; this was true for overall purchasing activity as well as in the story of electric vehicles.

Trump has made abolishing federal policies aimed at promoting electric vehicle sales in the USA a key part of his campaign, criticizing Biden's "crazy electric vehicle mandate." Advisors from Trump’s transition team have proposed cutting the $7,500 tax credit for plug-in vehicles, which would further distance these already expensive cars from USA consumers. The elected president has also threatened to impose tariffs on Canada and Mexico—countries closely linked to the USA auto supply chain—potentially driving up car prices.

In terms of the overall new car market in the USA, declining interest rates, increased manufacturer incentives, and easing anxieties surrounding the election have attracted more buyers, prompting Analysts to raise the annual sales forecast. Earlier this year, inflation and cyberattacks on Car Dealers darkened the sales outlook for 2024.

Cox Automotive states that General Motors (GM.US) may be the largest Auto Manufacturer in the USA by sales last year, delivering 2.7 million vehicles, followed by Toyota Motor (TM.US), Ford Motor (F.US), Hyundai, and Honda Motor (HMC.US). Cox predicts that due to product release delays and inventory inflation leading to the CEO's departure last year, Stellantis (STLA.US) fell to sixth place with a 15% drop in deliveries.

In terms of electric vehicles, Tesla (TSLA.US) remains the sales leader but experienced its first annual sales decline in over a decade last year, despite record deliveries in the fourth quarter. Meanwhile, according to data from JD Power, General Motors, Honda, Hyundai, and Kia's electric compact and midsize SUVs attracted more shoppers in December.

Jeff Schuster, Vice President of Automotive Research at GlobalData, states that affordability has caused the sales of various types of Autos to fall below pre-pandemic levels. According to JD Power data, the average retail transaction price for new vehicles in the USA is trending towards $46,258. For electric vehicles, high costs are the biggest obstacle for potential buyers, followed by inadequate charging infrastructure.

Data from JD Power shows that under the current tax credit policy, electric vehicle purchasers receive an average rebate of $5,600 per vehicle. Economists say that without this incentive, demand could plummet by 27%.

Although some Auto Manufacturers like General Motors and Hyundai have committed to continuing to roll out electric vehicle products regardless of changes in policy, other Auto Manufacturers have delayed their electric vehicle plans in favor of prioritizing hybrid vehicles. Significant growth in hybrid vehicles is expected in 2024. Stellantis announced last month that it would delay the launch of its fully electric Ram model by a year. Hyundai stated that it would double its hybrid product line, while Ford committed to launching hybrid versions of all models by 2030 after making significant price reductions for electric vehicles and delaying the introduction of new electric vehicle models.

Smoke from GlobalData states that Auto Manufacturers using a 'basket approach' will stand out by 2025. Smoke said, 'If you have a full product offering lineup, that's a win.'