Podcast
The Least-Noticed Climate Scandal of the Trump Administration
Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.
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Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.
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On auto imports, special elections, and Volvo’s new CEO
The South Korean automaker just opened an EV factory in Georgia. It’ll take a lot longer for others to catch up to Trump’s latest tariffs.
President Trump has introduced yet another round of tariffs that could upend the car industry. The newest volley in his trade war promises to slap an extra 25% tax onto any automobile imported into the U.S. It’s a measure meant to sound like a safeguard for American industry against foreign incursion. The reality, as usual, is a lot more complicated. These tariffs will punish many of the most promising EVs on the market, including those sold by Detroit.
The automotive toll of Trump’s tariffs was startling the last time around, when the administration said it would place a 25% tariffs on goods from Canada and Mexico, as well as 10% on Chinese imports. That proposal was particularly problematic for the car industry because automakers use a well-established North American production pipeline to reduce costs. Lots of vehicles, whether gasoline, electric, or hybrid, are built in Mexico before being sold in the United States, while plenty of auto parts manufacturing occurs in Canada.
On the electric side, that list of affected vehicles includes the Chevrolet Blazer EV and Equinox EV, as well as the Honda Prologue, which is based on a General Motors platform. All three are strong EV entries by legacy manufacturers trying to grab a chunk of the electric market as industry leader Tesla takes on water amid global rage at Elon Musk. But all three are manufactured at a GM plant in Mexico. So is the Mustang Mach-E, Ford’s flagship EV.
Heatmap has previously highlighted the Equinox, in particular, because the price of its entry-level version — around $35,000 before tax credits — makes it a compelling option for buyers who are shopping on price but interested in going electric. With a price marked up by 25%, it’s no longer competitive with gasoline-powered rivals. The Prologue has found an impressive niche in the market, especially for the many buyers who were waiting for a Honda-badged EV. But its broad appeal may not survive such a markup.
The newest Trump maneuver, a tariff on cars imported from any foreign country, creates another layer of economic chaos for EVs. These rules would target Japanese-made electric cars like the Toyota bZ4x and Subaru Solterra, German-built ones like those from BMW and Mercedes-Benz, and plenty more. Hyundai’s Kona EV, one of the more affordable electric models, is built abroad. Volkswagen moved assembly of its ID.4 electric crossover to Tennessee, but the ID.Buzz, the battery-powered revival of the classic VW bus, is not made in the USA.
Many of those foreign-owned companies were already moving manufacturing to the United States for basic economic reasons, and also to conform to the rules the Biden administration put in place governing eligibility for the $7,500 EV tax credit, which require that many key parts be sourced at home. Toyota and Honda have opened American plants; so have the German automakers. This could help them adjust to a new and convoluted reality. Hyundai’s new Georgia “metaplant” just opened and will produce the Korean automaker’s Ioniq 5 and Ioniq 9 EV crossovers. Its partner brand, Kia, makes the EV6 and EV9 in West Point, Georgia. These Southern factories will have a huge impact on the Korean brands’ ability to survive Trump-era tariffs and maintain their position as the biggest EV challengers to Tesla.
Trump ally Elon Musk stands to benefit most from this move, since Tesla does most of its manufacturing in the United States. Teslas aren’t 100% American; Musk estimates that 20% of what goes into his EVs comes from Mexico, and that the impact of Trump tariffs on Tesla is “not trivial.” This is a dodge. Yes, Tesla would be impacted by the 25% tariffs, but much less so than its rivals. It’s a bit like the EV price wars of a couple years ago, when Musk kept cutting the prices of his cars because he knew how hard it would be for legacy competitors to keep pace. It’s okay to take a punch if your enemies take a bigger one.
The question looming over all of Tesla’s rivals is how to survive this ever-shifting landscape of tariffs and penalties. Changes in the car industry are a long time in the making: It takes years to bring a new vehicle to fruition, to build a new factory, or to retool an old plant so it can manufacture a different vehicle. GM has spent years refitting a Kansas factory that once built the now-retired Chevy Malibu for the purpose of making the revived Bolt EV coming in 2026. It cannot, at the drop of a hat, suddenly begin to source and build the Equinox EV entirely within the borders of the United States of America. That’s why you’ll see plenty of lobbying over the course of the next month as the car industry tries to convince the administration to back off — or, if not that, to at least give their company a tariff exemption.
The impact for potential EV buyers is clear. New car prices will soar by thousands of dollars with Trump tariffs in place. That will be particularly troublesome for EVs, which are staring down the prospect of this administration trying to remove federal tax credits for Americans who buy electric. Used cars — the pathway to EV ownership for those who can’t afford the steep price tag of a new one — will get more expensive, too, thanks to rising demand from those priced out of new vehicles. If you really want to get into an EV, the best bet might be to act right now before any of this madness takes effect in April.
Administrator Lee Zeldin announced the cancellations weeks ago, but the agency has refused to provide details.
New documents obtained by Senate Democrats on the Environmental and Public Works Committee this week shed more light on the inner workings of EPA Administrator Lee Zeldin’s attempt to shut down hundreds of climate- and environmental justice-related grants.
Senators Sheldon Whitehouse of Rhode Island and Lisa Blunt Rochester of Delaware secured a list of 477 grants the EPA has “targeted for termination,” along with damning internal emails from the agency that showed its management knew that many of its terminations to date violated contracts with grantees.
Democrats on the committee sent a letter to Zeldin on Tuesday alleging that EPA was breaking the law and demanding that it rescind any grant termination notices it has sent out.
The list of grants appears to align with a press release the EPA published on March 10 stating that Zeldin had canceled more than 400 grants worth more than $1.7 billion in his fourth round of spending cuts. This was in addition to the $20 billion “green bank” program Zeldin has been attempting to cut. EPA did not say which grants it was canceling or why in any of these rounds of cuts, but last week, the Sierra Club obtained a partial list of what appeared to be the first three rounds through a Freedom of Information Act request.
While nearly half of the grants on the Sierra Club’s list were for research into low-carbon construction materials like steel and cement, all of the funds on the new list were awarded to nonprofits, Tribes, cities, states, and universities for projects in disadvantaged communities.
Many of the grants are from three Inflation Reduction Act programs: the Collaborative Problem-Solving Cooperative Agreement Program, which funds nonprofit efforts to create new partnerships with companies, local governments, or medical service providers to address environmental or public health issues; the Community Change Grant Program, which supports activities that reduce pollution and increase climate resilience; and the Government-to-Government Program, which subsidizes state and local government pilot projects and other activities that improve the environment and public health.
They include awards of between $20,000 and $20 million for community gardens, solar projects, air quality monitoring, energy efficiency upgrades, wildfire preparedness, clean water initiatives, protection during heatwaves, rural economic development, and job training, among many others.
Just over 130 of the grants are reported as being “financially closed,” or having a $0.00 remaining balance, meaning the EPA’s claim that it canceled more than 400 grants may have been inflated.
There is also overlap with the list the EPA provided to the Sierra Club. Heatmap identified 18 grants that appear on both. For these 18 grants, the Sierra Club list shows that they were canceled on the 21st or 22nd of February. The list obtained by the senators shows that they were “awarded” on those dates, but labels them “financially closed” or having a $0.00 remaining balance.
In their letter to Zeldin, Senate Democrats asserted Congress’ power over the federal purse, noting that the law specifically “directed the EPA to distribute $3 billion to improve environmental protection in communities facing economic hardship.” An internal email from the EPA’s general counsel notes that some of the grants were terminated on the basis that they funded DEI or environmental justice initiatives that “conflict with the Agency’s policy of prioritizing merit, fairness, and excellence in performing our statutory functions.” The senators’ letter argues quite the opposite — that these grants were meant to ensure a healthy environment for all Americans.
Secondly, they write that “any attempt to withhold these funds violates the Impoundment Control Act.” That’s a reference to a 1974 law that prohibits the executive branch from holding back congressionally appropriated funds without permission from Congress. The letter also admonishes Zeldin for violating federal court injunctions on President Trump’s funding freeze.
Lastly, the senators accuse the agency of knowingly violating the terms of its own contracts, citing an internal email from EPA’s Office of General Counsel which admits as much. The email acknowledges that many of the cancellation letters sent to grantees cited grounds for termination that were not valid under the grant contracts. At this, the Office of General Counsel essentially shrugs, noting that “no decision to retract the terminations is forthcoming,” and that grantees can dispute the decision or sue the agency if they want to.
The letter includes a series of 12 questions for the EPA, including requests for every termination letter sent to grantees and an explanation of what the agency plans to do with “the alleged $2 billion in federal funds ‘saved’ by EPA and DOGE grant terminations.”
In a statement to the Associated Press, the EPA confirmed that it received the letter, but that it has no plans to stop canceling grants. “As the Trump administration reins in wasteful spending of taxpayer dollars, EPA will continue terminating assistance agreements in line with terms and conditions,” the statement said.
Here is the full list of canceled grants released by the senators, published for the first time in a searchable, sortable format: