Like it or not, Donald Trump will be the next president of the United States. What affect will that have on the auto industry? The first hint came this morning when General Motors announced it will idle 2000 third shift workers early in 2017. Is GM worried that people will buy fewer cars and trucks when Trump is in office? Not at all. The move is designed to give The General time to rejigger its assembly lines to build more gargantuan SUVs and pickup trucks. It’s “Drill, baby, drill” time in America.
According to Green Tech Media, Trump is expected to decrease the power of the EPA and dismantle much of President Obama’s climate action program. Right now, the EPA’s CAFE regulations are scheduled for a full review to be completed in 2018. The automakers have been pushing back hard against further tightening of the standards. Since Trump says he will remove all “job-killing climate regulations,” we can expect those rules to be significantly softened if they continue to exist at all.
That means more and more larger, thirstier vehicles sucking up more fossil fuels and spewing out more pollutants. Apparently, that’s what most Americans want.
This might be a good time to load up on auto stocks. It’s time to party like its 1959 all over again. Kiss wimpy little 4 and 3 cylinder engines goodbye. It’s time to rediscover the magic of cubic inches and good old American V-8 power. The Obama administration just announced an initiative to increase EV charging infrastructure along the nations major highways. That plan could be stillborn.
Federal incentives for low and zero emissions cars could be on the chopping block. Carbon fees and tax breaks for renewable energy are endangered as well. President-elect Trump says government shouldn’t pick winners and losers in the market place. If fossil fuels are cheaper then let’s have more of them. Dig coal in Yellowstone. Frack the Grand Canyon. It’s all good as far as Trump is concerned.
The fact that fossil fuels enjoy trillions of dollars of indirect subsidies is far too abstract a concept for a man with the mental age of a 2 year old and the intelligence of Golden Retriever to comprehend. Untaxed externalities? That’s just some liberal gibberish designed to make life hard for Trump’s close personal friend Robert Murray.
Tesla Motors will continue to turn out compelling electric cars, but the rest of the industry may reduce their efforts to bring affordable electric cars to market if they can make more money building pretty much the same cars they have been selling for generations. Electric car sales are at 1% of the new car market in the United States at the moment. There is no reason to expect that number to rise significantly while The Donald is in office.
Photo credit: Green Tech Media