DETROIT – The auto industry has become a crucial issue during the 2024 presidential election, as Michigan – home to the Motor City and 1.1 million auto jobs – remains a critical state.
vice president Kamala Harrisformer president Donald Trumpand their running mates and supporters have made Michigan home in recent weeks as campaigns try to woo undecided voters in the Great Lakes State.
Since 2008, whichever candidate has won the state has moved into the White House in 2016, including Trump and the president. Joe Biden in 2020.
“Michigan’s 16 electoral votes helped bring Autos into the discussion. There are deep differences, but also convergence, between Trump’s hyperactive and conflicted statements and Harris’s calmer views,” Jefferies analyst Philippe Houchois wrote in an investor note on Monday.
While major automakers and suppliers have refrained from publicly endorsing either presidential candidate, several company executives and lobbyists spoke to CNBC on condition of anonymity to discuss how they are preparing for each candidate, as well as a likely divided Congress.
Electric vehicles, trade, tariffs, China, emissions regulations and labor are among the top issues automakers are monitoring, according to industry executives and policy experts.
Harris v. Trump
Officials expect Harris’ victory to be a continuation, not a copy, of the last four years under Biden. They think he will potentially understand businesses more, but there are concerns.
Some of his policies and potential appointments are unclear, experts say, and his relationship with the United Auto Workers, in particular union president Shawn Fain worries some who are militant foes of automakers.
If Trump is re-elected, auto industry officials expect him to return to policies and actions from his first term, but those positions may be more aggressive than before.
If he is in office, insiders expect him to roll back or roll back federal emissions and fuel economy tightening, as he did in his first term; Renewing the battle between California and other states that set their own standards; and could make financial changes to the Biden administration’s key Inflation Relief Act of 2022.
Trump would be unlikely to eliminate the IRA entirely, officials said, but he could eliminate or limit EV subsidies through executive orders or other policy measures.
Automakers, suppliers and other auto-related companies are bracing for both the results and a split in Congress, insiders said.
“There is no perfect scenario. Both candidates present some opportunities and challenges,” said a leading lobbyist and public policy expert for a major automaker. “Everyone in our business has to look at the gamut of scenarios.”
Some Wall Street analysts are speculating on older automakers, particularly Detroit companies General Motors, Ford Motor and Chrysler parent Stellantis — Trump and Republican control of Congress will benefit the most.
EV startups like Rivian Car and Lucid Group With a Democratic win, it will benefit more, largely because of pending plans that include electric vehicles and fuel-efficiency requirements. Despite this Tesla CEO Elon Musk‘s continued support for Trump.
Emission regulations
The most unexpected challenges for automakers are fuel economy and emissions regulations, especially for California and a number of states like Washington, Oregon and New York for the 2026 model year.
existing requirements under “Advanced Clean Cars II” The 2022 regulations require 35% of the 2026 model year vehicles to be zero-emission vehicles, which will be introduced next year. Electric battery, fuel cell and to some extent plug-in hybrid electric vehicles are classified as zero emission.
California Air Resources Board 12 states report and Washington, DC adopted the rules; however, about half are launched for the 2027 model year. They are included in CARB’s Advanced Clean Cars regulations, including 100% of new car sales Zero emission models by 2035.
According to the report, only 11 states and the District of Columbia had an EV market share above 10% to start this year. Alliance for Automotive Innovation, Trade association and lobby group representing the largest automobile manufacturers operating in the United States
Regardless of who wins the White House, officials said many automakers will seek a delay in the CARB mandates. They also expected Trump to roll back or freeze the Corporate Average Fuel Economy, or CAFE. Standards for 2027-2031 model years.
Several auto insiders said they expect Harris to work with automakers like Biden on average for such a standard.
HOME, IRA
Electric cars and the US policies that support them, such as the Inflation Reduction Act, are a focus for auto industry executives and lobbyists. If Trump takes office again, there could be major changes in regulations and incentives for electric vehicles that temporarily cripple the industry.
“Depending on the elections in the United States, we may have mandates; we may not,” Volkswagen Group of America CEO Pablo Di Ci said during an Automotive News event on Sept. 24. “Will I make any decisions about future investments now?” Obviously not. We are waiting to see.”
Electric vehicles have become popular talking point for Democrats to a rally call for Republicans four years ago.
Republicans led by Trump have largely condemned electric cars, saying they are forced on consumers and will destroy the US auto industry. Trump has pledged to roll back or eliminate many auto emissions standards as part of the Environmental Protection Agency and incentives to boost production and adoption of the vehicles.
In contrast, Democrats, including Harris, have historically supported EVs and related incentives.
Harris has been less vocal about supporting EVs recently amid slower-than-expected consumer adoption of cars and consumer pushback. He said he does not support the EV mandate Zero Emission Vehicles Act of 2019A bill he sponsored while a senator would require automakers to sell only electric cars by 2040.
Lucid Group CEO Peter Rawlinson told CNBC on Monday that regardless of which presidential candidate wins the election, he thinks America’s EV industry is still in its infancy and needs to continue to be “educated.”
Rawlinson, whose company owns the most efficient EVs on sale, also argues that the IRA should prioritize vehicle efficiency, not just battery size as it currently does.
“This effectively stimulates electron-leaking EVs,” he said. “It actually encouraged us to put in more batteries and be less efficient.”
Trade/tariffs and China
Fearing the global expansion of China’s auto industry, both Trump and Harris have said they intend to review the US’s North American trade deal, formally known as the United States-Mexico-Canada Agreement.
It was the agreement that replaced the North American Free Trade Agreement, or NAFTA Negotiations were held during Trump’s first term in office and entered into force in 2020. However, the former president and Democrats have said it needs to be improved to better support American auto manufacturing.
Harris was one of 10 U.S. senators, though Trump brought up the deal after it was renegotiated. Voted against the USMCA time.
GM CEO Mary Barra said last week that the automaker is “closely paying attention” to the election, including how potential changes in trade and tariffs could affect the company.
“Regardless of the outcome of the elections, we have and will continue to constructively engage in the policy-making process. “When you look at the number of jobs created in the U.S., even with some of the cars made overseas, a lot of them are with our partners from an allied perspective.” “It’s a very complicated situation.”
Tariffs are central to Trump’s plan for the auto industry. He said he would be willing to sharply raise tariffs to prevent Chinese automakers from importing cars from factories in Mexico to the United States.
Chinese automakers do not currently do this, but are expected to try to use this import method in the coming years. expand sales and establish local production plants in the country.
Harris reportedly called Trump’s tariff suggestions “Sales Tax for the American People.” The vice president did not mention any specific changes to the current rate structure, including Biden’s announcement that he would raise the rate if elected. Electric cars imported from China From 25% to 100%.
Non-U.S. automakers, which account for 48% of U.S. production and 52% of USMCA production, are more likely to favor Harris winning, according to Jefferies.
Labor
Officials who spoke to CNBC about a range of auto industry issues were nearly unanimous about labor: They worry that a Harris win will mean increased power for organized labor.
Biden, followed by Harris, the president of the United Auto Workers and the union, paid more attention to Fein than any previous president in modern times. Speech at the Democratic National Convention.
The UAW, led by Fain and his top advisers brought in from outside the union ranks, arguably has more political clout than at any time in a generation. But the UAW and other unions have historically been divided over Democratic-backed organizations and their members.
During the Teamsters refused to confirm UAW leaders nominated because of division in the union not only supported Harris but has been a driving force for his campaign in Michigan and other states.
UAW he said last week Internal polls showed “stronger support for Kamala Harris over Donald Trump, with Harris leading Trump over the past month.”
Meanwhile, there’s Trump and Fain consistently criticized each other The union is trying to organize as many auto plants as possible after major contract wins last year in negotiations with traditional Detroit automakers.
Blue collar workers Like UAW members They were considered important supporters of Trump’s first presidential election in 2016 against Democratic Party candidate Hillary Clinton.
– CNBC Michael Bloom contributed to this report.