Oil fan, Trump cedes electric car market to China

US President prioritizes gasoline over electric mobility, despite climate and cost concerns. Thus, China consolidates dominance towards an electrified automotive future.

When US President Donald Trump recently announced the repeal of vehicle fuel efficiency regulations, he called it an end to the “new green hoax.”

He was referring to efforts by the Biden administration, which encouraged automakers to replace internal combustion engine cars with electric, low-emission and more sustainable vehicles.

Since taking office in January, the Trump administration has already revoked a series of incentives aimed at reducing the circulation of cars running on fossil fuels. This includes the repeal of a Biden executive order that stipulated that 50% of cars sold in the US by 2030 must be electric; the freeze of billions in funding for charging infrastructure; and the elimination of a tax credit of 7,500 dollars (R$41,500) for the purchase of electric vehicles. Trump also cut funding from green energy programs in favor of oil and gas.

Arguing that “absurd exhaust emissions standards” were “killing” the auto industry, Trump confirmed to a group of auto executives gathered at the White House that fuel efficiency regulations also made cars very expensive.

Industry experts say incentives for electric vehicles were spurring greater investment in electric cars and charging infrastructure, as well as creating new jobs. But Trump has now promised to forgo an electrified future in favor of 19th century technologies.

Will gasoline cars be cheaper than electric ones?

As a result of the changes, vehicles in the U.S. will need a range of only about 35 miles per gallon, rather than the 13 miles per gallon required by Biden’s updated fuel economy standards for passenger cars and light trucks from 2022-2031 models.

Critics say both the climate and consumers will lose out from these changes.

California Gov. Gavin Newsom, a Democrat whose state is a powerhouse in renewable energy and electric vehicles, said Trump was “giving his Big Oil donors exactly what they want: less protections for consumers and more profits for polluters.”

Confirming estimates from the US National Highway Traffic Safety Administration (NHTSA), Newsom said national fuel consumption would have been reduced by 265 billion liters per year under previous efficiency standards.

Steven Higashide, director of the Clean Transportation Program at the nonprofit Union of Concerned Scientists, says relaxing fuel economy regulations will ultimately increase the price of gasoline.

Chinese electric car brand BYD overtook Tesla in 2024 as the world’s largest seller of electric vehicles | Pedro Pardo/AFP via Getty Images

“Vehicle pollution and dependence on oil in the US have decreased, and drivers can save money by opting for more efficient vehicles,” he said in a statement.

Fifty years of increasingly stringent fuel efficiency standards have helped protect drivers from oil market swings, providing them with cleaner air and, ultimately, savings of more than $5 trillion, Higashide said.

China must consolidate dominance

Trump’s decision to revoke automotive energy efficiency standards is “a clear victory” for the US oil industry, noted Ben Scott, head of Energy Demand at UK-based climate think tank Carbon Tracker. “But it’s an even bigger win for China as it puts the US even further behind in the transition to electric vehicles,” he added.

Around 20% of cars sold worldwide in 2024 were electric – a dramatic increase of 25% compared to 2023. Of the 17 million sold, 11 million were in China – compared to around 1.6 million in the US. Almost half of car sales in China in 2024 were electric vehicles, compared to 10% in the US.

And China, in direct contrast to the US, is dominating the global electric vehicle market through massive state incentives that have also helped drive down costs, making low-emission cars cheaper than most gasoline models in the country.

Trump’s restrictions on electric vehicles will worsen this gap by tying American automakers to outdated internal combustion engine technology, “instead of fully committing to the future,” Scott said.

American auto giant Ford announced this week that it is backtracking on its plans to electrify larger vehicles, in part due to regulatory changes, and that it will focus its efforts on gasoline trucks and hybrid trucks.

Although China now faces an electric vehicle oversupply problem, in part due to US and European Union tariffs limiting exports, Scott believes these cheaper cars will be targeted at markets in the Global South. “The transition to electric vehicles is inevitable everywhere,” he said.

Setback for the climate

Transporting people and goods in the U.S. contributes 29% of planet-warming carbon emissions, the largest share by sector in the economy.

But the latest fuel economy standards were preventing more than 710 million metric tons of climate pollutants from reaching the atmosphere, according to NTSHA.

Chinese ports overflow with electric vehicles destined for foreign markets | AFP/Getty Images

Electric cars, which generate a third of the emissions of gasoline cars, were poised to accelerate the decarbonization of American roads as electric vehicle sales broke records during the first nine months of 2025.

But that progress is about to stall. “Clearly, the unpredictable nature of American policy related to fuel economy standards and incentives for electric vehicles will slow the decarbonization of U.S. vehicle fleets,” said Ben Scott. This will ultimately lead to “slowing climate progress,” he added.

Despite concerns that electric vehicle batteries are also energy and resource intensive, “robust battery recycling can significantly reduce the amount of newly mined materials needed,” said Ellen Kennedy, an expert at the Rocky Mountain Institute, a US think tank specializing in energy.

More than 90% of lithium and 95% of nickel and cobalt can be recycled from batteries, she notes. “Recycling and recovery of battery minerals continues to improve, while fossil fuels are in limited supply and can only be used once,” she told DW.

In contrast to the consumption of 2.15 billion tons of oil in 2024 for global road transport, around 125 million tons of minerals could create an inexhaustible circular economy for batteries through reuse and recycling, Kennedy explained. “This is a self-sustainable extraction that could keep electric vehicles on the streets in the future,” he said.

Originally published by DW on 12/28/2025

By Stuart Braun