Impact of US politics on electromobility

E-Mobility Worldwide USA: CAFE is Now A Toothless Tiger

2025-10-14 By Tina Rumpelt | Translated by AI 3 min Reading Time

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Cars are inherently apolitical. Electromobility is not. Market analyst Henner Lehne from S&P Global Mobility explains who adjusts the levers, where, and how.

"Europe's EV market is increasingly being driven by more and more price-attractive models." Henner Lehne, S&P Global Mobility.(Image: S&P Global Mobility) — "Europe's EV market is increasingly being driven by more and more price-attractive models." Henner Lehne, S&P Global Mobility.
(Image: S&P Global Mobility)

Mr. Lehne, in General: What Drives E-Mobility?

Henner Lehne: Electromobility only works if the higher price and additional operational effort, such as finding a charging station, can be compensated. At the end of the day, the user must experience a benefit, typically that they can travel from A to B more cheaply than with a combustion engine. Then the EV becomes attractive to the general public.

We Are Currently Seeing this in China.

Yes. In China, prices for electric vehicles (EVs) are on par with, and sometimes even lower than, those of comparable combustion engines. Electricity is cheap, and the charging infrastructure is good. However, this growth has come at a high cost: through discount battles and price dumping.

In Contrast, the Development in the USA is Quite Different.

Absolutely. The US market is currently experiencing a 180-degree shift. BEV registrations are weakening, and local manufacturers are scaling back their EV activities. Since mid-last year, by our count, 26 BEV launches have already been postponed, and 70 BEV model programs have been completely canceled.

Which Action By the US President Particularly Affects the Development?

Donald Trump is not only scrapping almost all EV subsidies. His "Big Beautiful Bill" also includes suspending penalty payments for non-compliance with CAFE targets. CAFE, the 'Corporate Average Fuel Economy,' regulated the limitation of fleet fuel consumption for motor vehicles. Without penalties, CAFE becomes a toothless tiger. Additionally, in June 2025, Trump overturned California's law mandating the phase-out of combustion engines by 2035. The case is now before the courts.

Where Does Europe Stand?

Currently, nearly eight million BEVs are registered in the EU, accounting for three percent—more than double the number from 2022. Our forecasts for 2025 predict an increase in the BEV share of new registrations to 19 to 20 percent. The market is being driven primarily by an increasing number of competitively priced models in major markets such as Germany, France, the UK, Italy, and Spain, as well as the continuous expansion of charging infrastructure. By 2030, we expect the BEV share of new registrations in Europe (EU 30) to double to around 44 percent. The BEV share of the total passenger car fleet in the EU could reach nearly 13 percent by the end of the decade.

Are the Majority of OEMs Already Making money With EVs?

That's hard to say. Most traditional manufacturers typically do not report the results of their EV activities separately. BYD is no exception: the world's largest manufacturer of electric cars publishes its vehicle figures only combined with the results from its battery business. The big exception is Ford, and the insight is telling: in 2022, the US manufacturer consolidated its EV activities into the standalone division "Ford e." According to its own reports, this division generated $9.7 billion in revenue in 2023 and 2024 combined—with losses of the same magnitude.

Last But Not Least: A New EV Market is Emerging in India. What is Driving Sales There?

Two issues are relevant in India: dependence on oil imports and severe air pollution in major cities. On both fronts, the Indian government sees potential benefits from increased electromobility and is promoting it. The long-term goal is to achieve international leadership. We see solid growth, but initially at a low level, as the Indian consumer is very price-sensitive. (kt)

China currently accounts for two-thirds of global EV sales. Europe follows with 17 percent, and the USA with seven percent. (Image:AI-generated)

Henner Lehne

He is the Vice President of the Global Vehicle and Powertrain Group at S&P Global. In this role, he is responsible for forecasts on topics such as vehicle sales, production, and powertrain distribution for passenger cars to medium-duty commercial vehicles. He leads a team of 150 analysts operating in key regions around the world. Lehne joined CSM Worldwide in 2005 as a market analyst, initially forecasting vehicle sales in Europe. Prior to that, he worked in central marketing at Porsche AG. Lehne holds a degree in International Business and Marketing from Fontys University of Professional Education in the Netherlands.

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