By Mark R. Smith, Contributing Writer
Today is an interesting time in the automotive field, as it is in any industry that is striving to demonstrate to its market that it cares about a green future.
But while the previous Democratic presidential administration was encouraging constituents to switch from buying cars with internal combustion engines to hybrids or electronic vehicles―via what turned out to be unattainable goals―the new Republican administration has relaxed such directives.
However, that doesn’t mean that the auto industry’s efforts to work toward a greener future are necessarily on hold.
“I think there are several points to consider in regards to EVs given where we’ve been, as well as where we’re heading with the new leadership in D.C.,” said John Eichberger, executive director of the Transportation Energy Institute, Alexandria, Va.
“In recent years, the buzz was that EVs were going to take over. That didn’t happen,” Eichberger said, noting that in 2024, sheer battery vehicles accounted for 7.8 percent of the market. That was up from 1.6 percent in 2020; for hybrids, the numbers were 10.1 percent last year, up from 3.1 percent in 2020, according to Wards Intelligence.
“What that means is,” he said, “that the production plans during the Obama administration concerning looking to 50 MPG had an effect.”
Slow Shift
However, while assistance was available for buyers who wanted an EV, plenty of sales proceeded without incorporating that option. “Only about one-third of the buyers in 2024 used the federal tax credit,” said Eichberger. “This might be because buyers made too much money to qualify or the vehicles did not meet the requirements to qualify.”
But that means “that those who bought,” he said, “did so because they wanted to.”
Back to today, the new administration “may eliminate the incentives, but the people who want to buy EVs will still buy them. So while there has been a lot of notice that the EV side will be in trouble,” Eichberger said, “I don’t think it will be.”
What will happen, he said, is that manufacturers might rethink their approaches to the market. “Last year, 92 percent of all cars sold in the U.S. had internal combustion engines. Looking back 10 years, that number was 97.6 percent. Those are key numbers, because these ICE cars will stay on the road for about 12 years; Oak Ridge National Laboratory predicts many will last up to 16 years.”
Eichberger also noted that since 2013, 193 million cars have been sold in the U.S. and that there are almost 300 million cars on its roads. “So when so many are supposed to last for such a long time, “it’s going to take decades for the majority of car buyers to replace ICEs with EVs ― which are lower-emission vehicles, but not zero,” he said. “They’re cleaner, but on a life cycle basis, average only 41 percent cleaner. We’re also seeing more hybrids in the market, which are 29 percent cleaner.
“What we really have to do,” said Eichberger, “is reduce the emissions profile of the fuel. When we think more about that, we’ll marry more efficient vehicles with cleaner fuel, which will give the public more options.”
‘Less Urgency’
Deeming the switch from ICEs to EVs “a fluid situation” was Michael Chung, director, market intelligence, for the Bethesda, Md.-based Auto Care Association. He also said the EV adoption mandates during the Democratic administrations “proved to be effective in making businesses adapt,” though adding that since the election “many observers are thinking the market will slow because the mandates are being relaxed.”
Still, Chung said, “some of those mandates had already been adjusted prior to the election” since some proved unattainable, though “it can be argued that they had an effect on the market.”
When such lofty goals were announced, he said, it was “great from the standpoints of innovation and new business creation to push the goal along.”
“But if those goals are lifted or relaxed,” he said, “I expect less urgency and a more challenging environment for new solution providers. But that doesn’t mean that the market will fade, either.”
Then comes the matter of cost. EVs tend to be “a premium product, often above the average price of new vehicles (nearly $49,000 this year),” Chung said, noting that “one size does not fit all, because people have different driving patterns, and charging infrastructure and climate vary across the country.”
Power Trip
Courtney Dunbar also cited the new administration’s approach. “We have a seriously changing dynamic geopolitically,” said the director, site selection, of the Kansas City office of Burns & McDonnell. “If you looked at this situation a couple of years ago, you would have seen more production of EVs. I don’t think that will be a priority going forward.”
Nima Farshchi echoed that observation. The EV market is “a wide-open landscape, but shrinking at the same time,” said the director of the Center for Social Value Creation at the University of Maryland, College Park, “since the new administration halted disbursements for EV infrastructure that were federally funded.”
Another gnawing question concerns generating enough energy for the hybrid/EV market. “The bigger driver is the burgeoning use of artificial intelligence,” Farshchi said. “Data processing and data centers are increasing demand for power, as has the EV market, but to a lesser extent.”
In the end, EVs can’t be better for the world without an ample electricity available.
“If we don’t know where it’s going to come from, that definitely could lead to greater use of coal and nuclear energy (there are 54 nuclear reactors operating domestically, according to the U.S. Energy Information Administration), with Three Mile Island, slated to reopen” in 2028, “as market energy availability could shrink,” he said, “resulting in less supply of power for EVs or a need to create alternative fuel sources.”
Therefore, “there will not be a mandate that will boost the EV market to a level of profitability,” Dunbar said. “I don’t think the support is there to move it forward as of now. You will see parts of it grow overseas. And the competition will adjust, but not as much here until it can become most cost effective.”
Growth Rate
The cost of building EVs could also be affected by the new administration’s tariffs on Canada, Mexico and China, “so we’re staying in tune for more details. If they come to be, I’d expect costs to ultimately get passed on to consumers,” said Chung.
In addition, due to tariffs, companies that are providing infrastructure being foreign or domestic could come into play. Chung said that could cause multiple implications “not only from the parts standpoint, but also software and technology. The ‘computerization’ of vehicles has been opening the door to new technology providers in vehicles of all propulsion types.”
Then comes the repair angle. Not all shops, particularly those in the 40-50-year-old range, are necessarily eager to embrace and implement offerings for new technology.
“Still, businesses have to be mindful of the EV growth rate,” he said. “It’s about planning, so we’re seeing some acquisitions. Companies are positioning themselves to be attractive to investors, so it makes sense for parts manufacturers to make forays into categories associated with EVs if they’re not already in that space.”
On that note, Chung said that the main point ACA members are watching in the short term is the adoption rate. “The EV market had been picking up in recent years, but widespread penetration for the overall arc is still a ways off. The EV market is still several years away from a substantial impact.”
Charger Access
Among those undeterred is Blue Whale EV’s Nick McNulty. “We’re seeing generally more and more EVs coming online,” said McNulty, managing director of the consulting and installation firm in Hanover, Md. He pointed out that in 2023, they comprised about 10 percent of new car sales (according to Bloomberg New Energy Finance); by 2030, they’re slated to comprise more than 40 percent of cars on U.S. roads.”
And all of those EVs will need access to charging technology, which McNulty feels is improving markedly.
“As the electric vehicle supply equipment technology improves, particularly the bi-directional charging, there will be less of a strain on the grid,” he said, “as it will eventually make utility companies offer energy back to it,” often via solar panels and battery back-ups.
McNulty said Blue Whale is working on ways to keep the nation’s EV fleet charged, such as a program it offers with Dominion Power to provide charging technology to school buses “because they have predictable travel patterns. For example, they can bring energy back to the grid. This would be an incremental step, but another part of the industry build-up.”
McNulty also discussed what’s keeping various members of the public from boarding the EV sector gently revving bandwagon. “People are scared of making the switch from ICEs to hybrid or EVs for three reasons: the price of the cars, access to charging and the costs of possibly replacing the battery.”
“But as we move along,” he said, “the technology will continue to improve and more programs” will be available to consumers.”
Spurring Revenue
McNulty also stressed that EV ownership comes with benefits aside from the obvious environmental benefits. “If you have an EV, you won’t have to spend as much on car maintenance,” McNulty said.
Still prominent, however, is that concern about accessing power. “We have to think about the future,” he said, “so as more cars queue up for charging, EV supply equipment infrastructure needs to expand as the industry grows.”
For now, McNulty feels that hybrids will become more prominent as the industry moves forward. “That’s the half-step more people are starting to take toward the future,” he said, “among other gradual steps” such as businesses and retailers becoming more involved with EV technology.
As for setting up access in retail areas, McNulty pointed to a Singapore-MIT Alliance for Research & Technology that indicated doing so “generally spurs additional revenues for businesses” located within about 100 yards of the chargers and in low-income neighborhoods.
Fueling Up
So in many quarters, it’s still business as usual for getting the right parts to customers efficiently, despite whatever that day’s world tumult may be.
“It seems like every few months, something happens in the news, be it the recent administration announcements, the Key Bridge tragedy or the ship running aground in the Suez Canal,” said Chung. “There’s a shockwave. But ultimately, businesses adjusts and equilibrium is restored.”
Today, he said, what consumers need is support from the government in the form of “policy issues that are not so blunt that they don’t allow customers to choose products that meet their needs and budgets, but rather allow the marketplace to create products and solutions to meet customer needs efficiently.”
For Eichberger, the above offerings all lead him back to square one: working to create a cleaner future.
“I’m bullish on the future of EVs,” he said. “While we won’t meet the goals set in the previous administration, we have options to provide lower-carbon petroleum and better fuel blends, hopefully at the best possible cost. If the vehicle or the energy get more expensive for the customer―the suburban family, the urban family, the rural farmer―that won’t work.
While he’s heard that some companies have told consultants to stop addressing the EV market because priorities have shifted. Eichberger doesn’t agree with that approach.
“We’re about reducing emissions,” he said, “in a way that is economically sustainable while preserving affordable, relatable transportation for everybody.”
Odenton, Maryland-based Mark R. Smith joined Expansion Solutions after having written about site selection among the vast number of topics he has covered in the 
business universe. That part of his career began in 1993 when he joined The Daily Record, a Baltimore business and legal publication, where he delved into the worlds of economic development and commercial real estate, among numerous other industries; in 2003, he was named editor-in-chief of The Business Monthly, another Maryland publication that covers the scene in the Baltimore-Washington Corridor counties.
Concurrently, he’s written at length about the film and video industry for a variety of publications, and about his other loves, including music, sports and leisure.
