President Donald Trump has made no secret of his disdain for electric vehicles and is slamming the brakes on government incentives to get them into more driveways.
He’s been working to undo policies that promote clean technologies while increasing support for coal, oil, and natural gas. In particular, Trump has been working to reverse or halt programs under the Inflation Reduction Act, the single largest US government investment to deal with climate change, signed into law by his predecessor, Joe Biden.
Under Trump’s One Big Beautiful Bill, the $7,500 federal tax credit for buying a new electric car, along with a $4,000 credit for used EVs and $40,000 for commercial EVs, is set to expire on September 30.
Those moves may have contributed to Trump’s messy split with Elon Musk, CEO of electric carmaker Tesla and former head of the Department of Government Efficiency.
“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump posted on Truth Social in June.
More than 90 percent of new cars sold in the US are still gasoline-powered, and EV sales have recently seen a slowdown in the US following a years-long growth spurt. The looming rollback of federal incentives, along with inflation concerns, rising manufacturing costs from tariffs, and increasing competition over raw materials, have led carmakers to cut back on many of the enticements that have made electric cars a better buy.
Many car dealers have also been struggling to move EVs off their lots as customers remain worried about charging infrastructure and cost.
But despite all of these challenges, the popularity of EVs in the US is still growing, and some US automakers remain committed to running on electrons. And in other countries, EVs are racing ahead. More than half of new cars sold in China are electric or hybrids, backed by generous government subsidies. People clearly are willing to drive EVs — at the right price.
Last week, Ford announced that it was pouring $5 billion into building a new EV platform — a chassis and drivetrain for a suite of electric vehicles — in Louisville, Kentucky. The first vehicle rolling off the line will be a four-door pickup truck priced around $30,000. That would put it in line with some of the cheapest pickup trucks on the market today, electric or gasoline. And Ford aims to start deliveries in 2027, less than two years from now.
It’s an ambitious, risky bet in a volatile economy, but it’s a sign that, while electric vehicles may be slowing down in the US, automakers think they aren’t stopping and could accelerate again. It’s also good news for anyone concerned about rising greenhouse gas emissions, since transportation is one of the largest emitters of carbon dioxide in the world.
Why Ford is betting big on a small price tag
This isn’t Ford’s first run at an electric pickup truck. In 2021, Ford debuted the F-150 Lightning, the fully electric version of its iconic Ford F-150, the best-selling pickup truck in the US for almost five decades. At times, Ford was selling 100 conventional F-150s per hour.
So, it made a lot of sense that Ford would want to build on that successful platform to go electric. And at first, it seemed like their bet was paying off. Interest was high, and its initial production run for the 2022 model year sold out. The F-150 Lightning was named the 2023 MotorTrend Truck of the Year. Rivals at General Motors and Stellantis (the parent company of Dodge, Jeep, and Chrysler) responded by developing their own electric pickups. But Ford ran into issues with its battery suppliers while the auto industry as a whole hit supply chain snags during the Covid-19 pandemic. Lightning sales quickly hit a pothole, and Ford even paused production for a few months last year.
At the time, I argued that the Ford F-150 Lightning was not the EV America was waiting for. It was too expensive to be the mass market truck that would tip American drivers away from gasoline and toward batteries. The base model Lightning launched at close to $40,000, and the current base model is almost $50,000.
The Lightning was another entry in the US auto industry’s general trend of moving upmarket with bigger, pricier, and more profitable vehicles. Carveouts in fuel economy rules for trucks and SUVs have also contributed to vehicle bloat in recent decades.
The average new car price in the US has reached a record high of almost $50,000 in a country where the median household income is around $80,000. Even pickup trucks, which evoke a burly, working-class aesthetic, are often kitted out and priced like luxury cars. That means a lot of Americans are borrowing to buy them. The average new car payment is $745, and auto loans are the second-largest category of household debt.
Electrification adds another cost. Though electricity is cheaper than gasoline, the average EV has a higher sticker price than its gasoline counterpart. For some automakers, like Tesla and Rivian, this is part of their strategy. First, start by building a high-end vehicle, creating the supply chains and charging network to support it. Then, after achieving economies of scale, start building cheaper vehicles. But so far, carmakers have continued to make more expensive models and have been slow to release cheaper EVs.
Public EV chargers are also nowhere near as ubiquitous as gas stations, and the ones available haven’t always been reliable. The Trump administration halted $5 billion in funding for more EV chargers, but after a court injunction, it began to release the cash.
“The top barrier for [EV] adoption is price, and then infrastructure,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive.
So, now, Ford is following a different route.
Its bet on a $30,000 truck is an inversion of the start-expensive-then-go-cheap strategy, and the company argues it’s a return to form. “Nearly 120 years ago, the Ford Model T became the ‘Universal Car.’ Why? It was affordable, adaptable, and serviceable,” wrote Ford CEO Jim Farley recently. “Now, we’re ushering in the next chapter with the Ford Universal EV Platform.”
Alan Baum, principal of Baum and Associates, a market research firm focused on the auto industry, noted that this isn’t necessarily a shift for the company, but rather, a foray into the global market and an often overlooked swath of potential buyers at home that US automakers have largely ceded to foreign brands.
The customers looking to buy a cheap truck aren’t cross-shopping for a fully tricked-out F-150. And the growing cult of the Kei truck, a variety of tiny, cheap, lightweight gray-market Japanese imports, is an indication that there’s an unfed appetite for small utility vehicles in the US.
“Is this something that can change the profitability for electric vehicles, where they have obviously come up well short of what their earlier plans were? Yes,” Baum said. “Is this going to invert the company, moving away from these very profitable vehicles and being mostly a provider of $30,000 vehicles? Absolutely not.”
Welcome to the no carrots, no sticks era of EVs
The other factor to consider is that, while the US is the land of big trucks, it isn’t the only place where people are buying them.
In the rest of the world, small, cheap cars are still in high demand. Some of the biggest growth markets are in places like southeast Asia, places with high gas prices, narrow roads, and a burgeoning middle class eager to get around. Inside the US, the government has used tariffs to keep Chinese electric carmakers like BYD off the interstate, but they’ve since become dominant in other countries. BYD is now the largest EV manufacturer in the world, while global EV sales are set to break new records this year and US carmakers are still trying to get out of the pit lane.
Meanwhile, massive markets like the European Union are still maintaining their environmental regulations, including a ban on the sales of new gasoline and diesel-powered vehicles by 2035.
So even with rollbacks of EV incentives and reversing regulations that promote cleaner vehicles in the US, carmakers are still facing a lot of pressure to make cleaner vehicles if they want to be competitive in the global market. And companies like Ford want to be competitive in the global market. The US may try to reverse the EV transition, but the rest of the world is shifting into overdrive.
They’re also facing the added constraint of tariffs on materials like steel, aluminum, and rare earth metals. Ford said its new EV platform is aimed at exports as well as the domestic market and that critical components like batteries will be manufactured within the US without using critical minerals like nickel and cobalt.
The energy sector offers a useful parallel. Wind and solar power are now the main ways the world is adding more electricity to the power grid — not because of environmental regulations, but because it’s cheap and quick to get them up and running.
A lower price point is a stronger argument than any climate change bona fides. The words “environment,” “climate,” “carbon,” and “emissions” were conspicuously absent in Ford’s universal EV platform announcement. While the transition to cleaner vehicles is slowing, once EVs are cheaper and better than internal combustion cars, they will race ahead and take a commanding lead.
“The rest of the world’s going electric,” Valdez Streaty said. “I think we’ll continue to see that technology advancement, but definitely we have a lot of hurdles and bumps in the road right now.”
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