Auto makers, suppliers want less drastic swings in EV policy after 2024 presidential election

TRAVERSE CITY, Mich.—Industry executives and lobbyists called for more certainty and less drastic shifts in electric vehicle policies and regulations between administrations ahead of the Nov. 5 presidential election.

But what those policies and regulations should look like depends on whom you ask.

Executives at Toyota and Rivian Automotive, speaking on an Aug. 5 panel here at the 2024 CAR Management Briefing Seminars, offered their own visions of what a federal framework on electrification policy should look like.

Tom Stricker, Toyota Motor North America's group vice president of sustainability and regulatory affairs, urged the government to avoid a patchwork system of regulations geared only toward boosting battery electric vehicle adoption. Instead, regulation and policy should be aimed at boosting sales and production of all electrified vehicles, including hybrids and plug-in hybrids, he said.

"We want regulators to address the issues without telling us what the answers have to be," Stricker said.

Rivian, meanwhile, sees an all-electric future, and regulations and policy will only serve to either speed up or slow that future while also determining how competitive the U.S. is globally, said Chris Nevers, senior director of public policy at the EV maker.

He said Rivian welcomes efforts to boost EV adoption while also cautioning against swift changes in policy in one direction or another.

"Any quick changes can have some really negative consequences," Nevers said. "Realizing that it takes manufacturers some time to, for example, source products or change product lines—that goes way beyond consumer acceptance."

The executives' comments underscore how complex the industry's electrification efforts are, as well as the stark differences in approach by pure EV manufacturers and legacy auto makers that still rely on internal combustion engine vehicles to make a profit.

It's also a complex situation for suppliers, many of which are grappling with stranded capital as auto makers revise their EV manufacturing plans because of lower-than-expected sales growth.

Suppliers have been under a "great deal of stress" since the start of the microchip shortage several years ago, and policymakers should keep the viability of the supply chain in mind when setting standards and targets, said Ann Wilson, executive vice president of government affairs at MEMA, which represents more than 1,000 companies in the automotive supply chain.

"It's really important that we try to figure out what the role for those manufactures is," she said. "Are they going to make it in the transition, depending on the pace, or are they not? If they're not going to make it, do we have a strong enough supply base overall to then be able to provide Rivian and Toyota and the rest of the manufacturers what they need?"

Electrification strategies have been shaped in part by federal legislation such as the 2021 bipartisan infrastructure law and the Inflation Reduction Act, which incentivizes EVs built domestically with local parts. But EV regulations, as well as relevant trade policies, could change drastically after the November election between Vice President Kamala Harris and former President Donald Trump.

Toyota's Stricker said each subsequent presidential election has become more consequential for the industry than the one before. Whereas 20 years ago policy would shift more moderately between Democratic and Republican administrations, the industry now braces for much larger swings, he said.

The industry is being pushed "really far in one direction, potentially, and then be told, scratch that, go in a very different direction," he said. "That may average out at the 50-yard line, but it's a very inefficient way to get there."