With 14 million units of sales gone, Trump has dealt a heavy blow to the U.S. electric vehicle industry and it may rank at the bottom globally by 2040.

A recent report indicates that Donald Trump is working hard to overturn policies supporting electric vehicles (EVs), which may cause the United States to lag behind in EV development in the coming years.

On Wednesday, BloombergNEF (BNEF) released a report stating that the Trump administration's comprehensive reversal of EV policies is pushing the United States into an awkward situation - the U.S. will not only lag behind China and Europe in EV penetration but may even fail to reach the global average adoption rate until 2040.

Due to the U.S. policy regression, this research institution has for the first time simultaneously downgraded both the short - term and long - term outlooks for EVs in the U.S., cutting the sales forecast for battery - powered vehicles by 14 million units before 2030.

The U.S. EV market may become a global laggard

BNEF analysts pointed out in the report:

"Global EV sales are growing, but the development situations among countries are becoming increasingly divergent. For example, China is expected to account for nearly two - thirds of the world's 22 million plug - in vehicle sales this year, largely thanks to the Chinese government's incentive policies. In contrast, all major EV policies in the U.S. are under attack."

On the first day of his return to the White House in January, Trump ordered the cancellation of EV subsidies and other support measures. His administration and the Republican - controlled Congress are actively responding to this directive, working to relax national fuel economy standards, gradually eliminate EV tax credits, and deprive California of its ability to set its own emission limits.

BNEF's forecast assumes that the U.S. will revert to the vehicle fuel and exhaust emission standards during Trump's first term in office, and most EVs will no longer be eligible for the maximum $7,500 tax subsidy for vehicle purchases after this year.

California's lawsuit is a key variable

Greater uncertainty comes from the fate of state - level policies. If the U.S. ultimately cancels the exemption for states to set stricter clean - air regulations (especially those led by California), the outlook for EV sales will further deteriorate.

California Attorney General Rob Bonta has joined several states in filing a lawsuit against the federal government's decision to abolish state policies.

BNEF warns:

"If the attempt to revoke California's exemption succeeds, it will severely hit EV sales in California. Since California plays an important role in the U.S. EV market, this will affect EV sales across the entire United States."

"If the demand - side subsidies (such as purchase credits) are cancelled while the supply - side mandates (such as the proportion of EVs for automakers) are also revoked, EV sales in the U.S. will decline significantly."

China's rise forms a sharp contrast

In contrast, China will maintain strong momentum in the process of transitioning to EVs. The reason is simple: it makes economic sense. China is the only large - scale market where the average price of EVs is lower than that of fuel - powered vehicles in the same class. That is to say, it is cheaper to buy an EV than a fuel - powered vehicle in China.

In addition, the Chinese government has recently extended the subsidy policy for old - car replacement, encouraging consumers to replace their old cars with new energy vehicles (including pure EVs and hybrid vehicles), further stimulating demand.

BNEF predicts that within the next year, the size of China's EV market will exceed the total size of the entire U.S. auto market. China is emerging as a major manufacturing powerhouse for EVs. The report estimates that nearly 70% of the world's EV production last year came from China.

This article does not constitute personal investment advice and does not represent the views of the platform. The market is risky, and investment requires caution. Please make independent judgments and decisions.

This article is from the WeChat official account "Wall Street Insights", author: Fang Jiayao. It is published by 36Kr with authorization.