Biden and Trump administrations have aimed to reduce American dependence on Chinese manufacturing vehicles, but their strategies differ considerably in terms of support for the production of electric vehicles from American car manufacturers.
The current American-Chinese trade war should have a negative impact on the United States US market, especially due to the high dependence on Chinese imports such as lithium-ion batteries.
American manufacturers of electric vehicles already find it difficult to follow competitive Chinese electric vehicles in terms of world sales, but it is a wider decline in policies adapted to electric vehicles which constitute the greatest threat to future interior sales.
Biden and Trump administrations have shared a common goal: to reduce the dependence of the United States towards foreign manufacturing vehicles, in particular China, to protect national manufacturers and strengthen local production.
In 2024, the Biden administration imposed a 100% price on Chinese electric vehicles and a 25% price on VHium-ion EV batteries. The objective was to safeguard American manufacturing while accelerating the decoupling of Chinese supply chains. Biden’s vision did not only concern foreign dependence, but also ensure that the United States could continue to make large-scale electric vehicles. For example, the Biden administration has set an ambitious objective that 50% of all the new vehicles sold in the United States by 2030 would be electric battery vehicles (BEV).
To achieve this objective, the Biden administration focused on the development of infrastructure, allocating $ 5 billion as part of the National Formula for Electric Vehicle Infrastructure (Nevi) to build a national network of 500,000 high speed EV load stations by 2030, but also to strengthen the national battery manufacturing sector. In fact, in September 2024, the US DOE announced more than $ 3 billion in funding for 25 projects in 14 states, aimed at improving the production of advanced batteries and battery materials, with winners, including large companies such as Honeywell.
This plan was confronted with important backhands under the new administration. While continuing the decoupling of Chinese supply chains, President Trump recently imposed a 145% rate on Chinese products – which include EV components such as lithium -ion batteries. Unlike his predecessor, Trump has shown little interest in protecting the EV supply chain. These new prices should significantly increase the cost of battery cells, increase EV prices and mitigate interior sales. This is particularly worrying since China is currently hosting 75 to 85% of the global cellular production battery production capacity.
Adding to uncertainty, China announced in April 2025 that it would limit the exports of seven elements of rare land, including dysprosium and terbium, which are currently used in many scalable engines. China controlling around 60% of the global elements of rare earth elements (REE) and 90% of its treatment, the United States remains very exposed in the event of prolonged commercial escalation. Vehicles built by the United States greatly depend on international supply chains – Tesla, for example, imports 20% to 25% of its components from other countries.
This creates a complicated dynamic for Tesla. While Elon Musk generally aligned himself with President Trump on several questions, recent developments concerning the pricing policy have exposed a friction. Musk has repeatedly expressed the opposition to radical prices, which disrupted the world markets and struck Tesla, particularly hard, taking into account its dependence on Chinese manufacturing components. Tesla’s shares have since dropped by almost 50% compared to its peak in December 2024, highlighting the exposure of the company upwards and the confidence of shaken investors.
Chinese car manufacturers already exceeded their American counterparts in terms of cost competitiveness. In particular, the aggressive advantages of byd and the interior supply chain allowed it to offer electric vehicles at significantly lower prices. Consequently, in the fourth quarter of 2024, BYD officially exceeded Tesla in the global sales of electric vehicles, providing 594,839 units, against 491,062 of Tesla, marking the first time that Tesla has lost its quarterly sales on the electric vehicle market since 2018. Goods as a form of protest, which could further reduce the global market for American electric vehicles.
In response to the growing concerns of industry, the Trump administration has given temporary exemptions for certain car manufacturers, in particular those based on supply chains that cross Canada and Mexico. In March 2025, he issued a month of a month of prices for companies such as Ford, General Motors and Stellantis, following the reactions of large car manufacturers. In addition, on April 29, Trump suggested that he would facilitate prices affecting automotive production costs after pressure from automakers based in the United States, declaring that he wanted to “take care of our car manufacturers” in light of the increase in the costs of inputs and complaints from the industry. Although this can offer a certain short-term relief for ice vehicles, it does not do much to meet the long-term challenges of the location of the EV supply chain.
The displacement of the US production chain from the China EV production to other critical sources rich in materials is a continuous process. For example, while Tesla has made significant investments in the production of lithium-ion batteries in its gigafactory in Nevada, most of lithium comes from abroad, including China, South America and Australia. Domestic lithium extraction projects, such as those of the Nevada Thaker Pass or the Piedmont Lithium Project of North Carolina, are only a few years old in large -scale production, but environmental concerns and infrastructure challenges can cause significant delays.
The United States accelerated the production of domestic batteries, ranking in the world in second position with a total of 91 Lithium-ion EV battery factories due to the online putting between 2025 and 2032. These factories include public and private projects, such as the Blue Oval EV Blue EV Blue EV transition program, with a project value of $ 9.2 billion, and the transition program EV General Motors, with a project value of $ 7.2. However, the gap remains large: in addition to its existing manufacturing capacity, China currently has more than 277 lithium -ion battery factories to reach the completion between 2025 and 2032 – more than the triple of the American total. This not only underlines the continuous domination of the manufacture of Chinese batteries despite an increase in the impetus of the United States, but also emphasizes how the United States will be able to compensate for the disturbances of the short-term supply chain and the increase in costs with its internal production alone.
Beyond the prices, the broader changes in the Trump administration are ready to have a significant impact on the American electric vehicle market. In particular, the plans to facilitate fuel economy and CO₂ reduction objectives would reduce pressure on car manufacturers to invest in costly electrification technologies or increase BEV sales, which allows them to focus on for -profit combustion engine vehicles. In addition, the administration’s intention to eliminate the federal federal tax credit of $ 7,500 – a decision supported by Tesla but opposed by other car manufacturers – could considerably reduce the request of VE. These changes in imminent policy have already led to tangible setbacks in the industry. Several battery investments have already been delayed or canceled, including the LG Queen Creek factory in Arizona, planned for EV batteries and energy storage, and the HL-GA battery factory in Georgia, to provide electricity vehicles Hyundai and Kia, while companies are rebuilding the viability of their EV strategies in the face of political uncertainty.
While the situation continues to evolve in the midst of current commercial negotiations and changing tariff policies, temporary exemptions have been granted for certain categories, for example consumer electronics, including smartphones and laptops. Although examples like the above suggest that Trump is willing to mitigate prices in specific sectors – including cars – these movements are not intended to support EV supply chains in particular. As such, while traditional car manufacturers can benefit from short -term relief, the American market EV still faces significant obstacles. Trump’s broader anti-EV position, combined with declines and recent interruption of domestic battery projects, will continue to present major opposite in the growth of this sector.
Source: GlobalData construction database.
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“US Electric Vehicle Market in the midst of trade and policies’ uncertainty” was initially created and published by Operating technologyA brand belonging to GlobalData.
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