Auto insiders on both candidates, top issues

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Auto insiders on both candidates, top issues

New Ford F-150 trucks go through the assembly line at the Ford Dearborn Plant on April 11, 2024 in Dearborn, Michigan. 

Bill Pugliano | Getty Images

DETROIT — The automotive industry has become a crucial topic during the 2024 presidential election as Michigan — home of the Motor City and 1.1 million automotive jobs — ******** a critical swing state.

Vice President Kamala Harris, former President Donald Trump, and their running mates and supporters have made Michigan a second home in recent weeks as the campaigns attempt to win over undecided voters in the Great Lakes State.

Since 2008, whichever candidate has won the state has moved into the White House, including Trump in 2016 and President Joe Biden in 2020.

“Michigan’s 16 electoral votes have helped thrust Autos into the debate. Between Trump’s hyperactive and contradictory statements and Harris’ quieter views lay deep differences but also convergence,” Jefferies analyst Philippe Houchois wrote in an investor note Monday.

While major automakers and suppliers have shied away from publicly endorsing either presidential candidate, executives and lobbyists from several companies spoke to CNBC on the condition of anonymity to discuss how they’re 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 vs. Trump

Officials expect a Harris victory to be a continuation, but not a copy, of the past four years under Biden. They think she would potentially be more understanding of businesses, but there are concerns.

Some of her policies and potential appointments are unclear, experts said, and her alignment with the ******* Auto Workers, particularly union President Shawn Fain who has been a combative foe to automakers, is concerning to some.

US Vice President and Democratic presidential nominee Kamala Harris greets union workers as she tours an International Union of Painters and Allied Trades training facility in Macomb, Michigan, on October 28, 2024. 

Drew Angerer | AFP | Getty Images

If Trump wins reelection, automotive industry officials largely expect that he’ll return to policies and actions from his first presidential term, but those stances could be potentially more aggressive than they were before.

If he’s in office, insiders expect he would roll back or eliminate tightening federal emissions and fuel economy like he did during his first term; renew a battle between California and other states that set their own standards; and potentially enact funding changes to the Biden administration’s key Inflation Reduction Act of 2022 legislation.

Officials said it would be difficult for Trump to completely gut the IRA, but he could defund or limit EV subsidies through executive orders or other policy actions.

Automakers, suppliers and other auto-related companies are preparing for both outcomes as well as a split in Congress, insiders said.

*********** presidential nominee and former U.S. President Donald Trump speaks as he visits a campaign office in Hamtramck, Michigan, U.S. October 18, 2024. 

Brian Snyder | Reuters

“There’s no perfect scenario. Both candidates offer 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 speculate legacy automakers — specifically the “Detroit” companies General Motors, Ford Motor and Chrysler parent Stellantis — would benefit most with Trump and *********** control of Congress.

EV startups such as Rivian Automotive and Lucid Group would benefit more with a Democratic win, largely due to expected plans involving EVs and fuel economy requirements. That’s despite Tesla CEO Elon Musk’s continued support for Trump.

Emissions regulations

The most imminent issues for automakers are fuel economy and emissions regulations, specifically regarding 2026 model year regulations for California and several states that follow them such as Washington, Oregon and New York.

Current requirements under the

This is the hidden content, please

• Sign In
• or
• Sign Up

regulations of 2022 call for 35% of 2026 model year vehicles, which will begin to be introduced next year, to be zero-emission vehicles. Battery-electric, fuel cell and, to an extent, plug-in hybrid electric vehicles qualify as zero emission.

The California Air Resources Board

This is the hidden content, please

• Sign In
• or
• Sign Up

and Washington, D.C., have adopted the rules; however, roughly half have them starting for the 2027 model year. They are part of CARB’s Advanced Clean Cars regulations that include mandating 100% of new vehicle sales be

This is the hidden content, please

• Sign In
• or
• Sign Up

.

Only 11 states and the District of Columbia had an EV market share above 10% to begin this year, according to the

This is the hidden content, please

• Sign In
• or
• Sign Up

a trade association and lobby group that represents most major automakers operating in the U.S.

Officials said regardless of who wins the White House, many automakers will push for the CARB mandates to be postponed. They also would expect Trump to roll back or freeze the Corporate Average Fuel Economy, or CAFE,

This is the hidden content, please

• Sign In
• or
• Sign Up

.

Several automotive insiders said they expect Harris would work on a middle ground for such standard with the automakers, much like Biden, to an extent, has done.

EVs, IRA

Electric vehicles and the U.S. policies supporting them, such as the Inflation Reduction Act, are top of mind for automotive industry executives and lobbyists. There could be major changes in regulations and incentives for EVs if Trump regains power, which has placed the industry in a temporary limbo.

“Depending on the election in the U.S., we may have mandates; we may not,” Volkswagen Group of America CEO Pablo Di Si said Sept. 24 during an Automotive News event. “Am I going to make any decisions on future investments right now? Obviously not. We’re waiting to see.”

Electric vehicles transformed from a popular talking point for Democrats four years ago to a rallying call for Republicans.

Republicans, led by Trump, have largely condemned EVs, saying that they are being forced upon consumers and that they will ruin the U.S. automotive industry. Trump has vowed to roll back or eliminate many vehicle emissions standards under the Environmental Protection Agency and incentives to promote production and adoption of the vehicles.

In contrast, Democrats, including Harris, have historically supported EVs and related incentives.

Harris hasn’t been as vocal about backing EVs lately amid slower-than-expected consumer adoption of the vehicles and consumer pushback. She has said she does not support an EV mandate such as the

This is the hidden content, please

• Sign In
• or
• Sign Up

, which she co-sponsored during her time as a senator, that would have required automakers to sell only electrified vehicles by 2040.

Lucid Group CEO Peter Rawlinson told CNBC on Monday that regardless of which presidential candidate wins the election, he believes America’s EV industry is still in its infancy and needs to continue to be “nurtured.”

Rawlinson, whose company has the most efficient EVs on *****, also argues the IRA should favor not just the size of a battery, like it currently does, but the efficiency of the vehicles.

“That’s effectively incentivizing electron-guzzling EVs,” he said. “It actually incentivized to put more batteries in and be less efficient.”

Trade/tariffs and China

Led by fears of China’s automotive industry expanding globally, both Trump and Harris have expressed intentions to review the U.S. North ********* trade deal, formally known as the ******* States-Mexico-Canada Agreement.

The deal, which replaced the North ********* Free Trade Agreement, or NAFTA, was negotiated under Trump’s first term in office and took effect in 2020. However, the former president and Democrats have said it needs to be improved to better support ********* automotive production.

While Trump touted the deal when it was renegotiated, Harris was one of 10 U.S. senators who

This is the hidden content, please

• Sign In
• or
• Sign Up

at the time.

GM CEO Mary Barra last week said the automaker is “paying careful attention” to the election, including how potential changes in trade and tariffs could impact the company.

“We have and we’ll continue to engage constructively with the policymaking process regardless of the election outcome. When you look at the number of jobs created in the U.S., even with some vehicles that are manufactured outside, a lot of them are in our partners from an ally perspective,” she said. “It’s a very complex situation.”

Tariffs are central to Trump’s plan for the auto industry. He has said he would be willing to increase tariffs dramatically to prevent ******** automakers from importing cars into the U.S. from factories in Mexico.

******** automakers are not currently doing that, but are expected to attempt to use that method of importing in the years ahead, as they expand sales and build localized production plants in the country.

Harris has reportedly called Trump’s tariff

This is the hidden content, please

• Sign In
• or
• Sign Up

“a sales tax on the ********* people.” The vice president hasn’t outlined any specific changes she’d make to the current tariff structure if elected, including on Biden’s announcement of raising the tariff rate on EVs imported from China from 25% to 100%.

Non-U.S.-based automakers, which together account for 48% of U.S. production and 52% of USMCA production, look more positively leveraged to Harris winning, according to Jefferies.

Labor

Of the many issues regarding the automotive industry, officials who spoke to CNBC were nearly unanimous regarding labor: They’re concerned a Harris win would continue to mean increased power for organized labor.

Biden, followed by Harris, gave the ******* Auto Workers and Fain — the union’s president — more spotlight than any previous presidents in modern times, including a speech at the Democratic National Convention.

The UAW arguably has more political clout than any time in a generation, led by Fain and his top advisors who he brought in from outside the union’s ranks. But there has been a divide in the UAW and other unions regarding the historically Democratic-backed organizations and their members.

While the Teamsters declined to endorse a candidate due to a divide in the union, UAW leaders not only endorsed Harris but have been a driving force for her election campaign in Michigan and other states.

The UAW

This is the hidden content, please

• Sign In
• or
• Sign Up

internal polling showed increasingly “strong support for Kamala Harris over Donald Trump, with Harris’ lead over Trump surging in the last month.”

Meanwhile, Trump and Fain have consistently criticized one another over the past year, as the union attempts to organize as many auto plants as possible following major contract gains won during negotiations last year with the traditional Detroit automakers.

Blue-collar workers

This is the hidden content, please

• Sign In
• or
• Sign Up

were viewed as crucial supporters for Trump’s first presidential election over Democratic candidate Hillary Clinton in 2016.

— CNBC’s Michael Bloom contributed to this report.

Don’t miss these insights from CNBC PRO

This is the hidden content, please

• Sign In
• or
• Sign Up

#Auto #insiders #candidates #top #issues

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up