Trump Revokes EV Mandate in the US, Here's the Impact on Indonesia

KatadataOTO – US President Donald Trump has halted several programs and commitments from the previous administration, Joe Biden, related to the development and acceleration of electric vehicle adoption.

There is a high probability that incentives previously implemented will no longer be given to EV (Electric Vehicle) manufacturers in the US.

Several parties regret the decision. However, Trump's revocation of the EV mandate is not expected to stop the transition to electric vehicles, only slow it down.

Meanwhile, according to Celios (Center of Economic and Law Studies), there are at least four main impacts of the US policy on the electric vehicle ecosystem in Indonesia.

Photo : Geely

In summary, the four points are: a decrease in demand for critical minerals for electric vehicle battery raw materials, waning interest from US investors, potential stalls in international financing, and the downstream nickel industry in Indonesia being dominated by Chinese companies.

The prices of critical minerals such as nickel, copper, tin, and bauxite will drop drastically due to the decline in global demand.

“The reference price for nickel in the international market has plummeted 3.7 percent year on year, and cobalt has fallen 16.6 percent in the same period,” said Bhima Yudhistira, Executive Director of Celios, as quoted by Antara on Thursday (30/1).

In the next two months, this price decrease could trigger changes in the business plans of EV manufacturers in the US and risk changes to raw material supply contracts.

Previously, the IRA (Inflation Reduction Act) policy was one of the pathways for US investors to bring changes to the governance of downstream mining in Indonesia. Since it was halted by Trump, that opportunity has become smaller.

“The export performance of processed nickel this year is projected to worsen and will also impact the decline in the trade balance surplus,” he asserted.

Photo : Citroen

For your information, Trump's decision was claimed to be made to support the automotive industry as a whole and not just in the field of electrification.

Reported from the official White House website, one of the policy points titled Unleashing American Energy will also revoke emission relief policies in several states. Thus, the sale of gasoline-powered cars will no longer be restricted.

The response from car manufacturers to this has also been varied. Stellantis, which oversees brands like Jeep and Ram, has responded positively.