US President Donald Trump on Monday renewed his assault on electric vehicle policy during a visit to the General Motors Milford Proving Ground in Michigan, declaring that American consumers must be free to choose between electric and internal-combustion vehicles. The appearance underscored the administration's sweeping rollback of clean-vehicle rules put in place under former President Joe Biden.

What Trump Announced

Trump reiterated that on his first day in office he had revoked Biden-era electric vehicle mandates and tightened fuel-efficiency standards. He also confirmed the termination of Corporate Average Fuel Economy (CAFE) standards introduced by the previous administration. 'I terminated Biden's disastrous CAFE Fuel Standards,' Trump said. 'That was a short road to bankruptcy for every single car company in this country, and a total disaster that would have killed the internal combustion engine.'

The president additionally promoted a tax deduction on interest paid for automobile loans, stipulating it would apply only to vehicles manufactured inside the United States.

The Jobs Argument

A central thread of Trump's address was employment. He argued that electric vehicles require significantly fewer workers to assemble than their combustion counterparts — a pointed concern for Michigan, a state whose economy is deeply tied to auto manufacturing. In a remark directed at General Motors CEO Mary Barra, who was present at the event, Trump said: 'I don't want to say this in front of Mary, because she'll change your mind, but it takes far fewer people to build an electric car.'

He was careful to add that consumers who want an electric vehicle can still buy one, framing the policy as expanding choice rather than eliminating it.

Tariffs as the Enforcement Lever

Trump paired the policy rollback with a 25 per cent tariff on imported automobiles and trucks, while vehicles assembled domestically face no such levy. He praised General Motors for responding to the incentive structure, noting the company had raised truck and sport utility vehicle output by 20 per cent in 2026 and committed $9 billion over two years to reshoring factory operations. 'They're coming back home because, frankly, when they build here, there's no tariff,' Trump said.

What the Biden Policy Actually Said

The Biden administration's emissions and fuel-efficiency rules did not explicitly mandate that every new vehicle sold be electric. Rather, they were structured to progressively raise the share of electric and low-emission models in the market. Critics of the rollback argue that dismantling these standards weakens the United States' long-term competitiveness in a global industry rapidly shifting toward electrification.

Global and Indian Market Implications

The policy reversal carries consequences well beyond American borders. Automakers and component suppliers worldwide — including firms with significant operations in India — calibrate investment decisions around US emissions frameworks, battery demand forecasts, and market-access conditions. A sustained US retreat from electrification targets could slow battery supply-chain investments globally, while simultaneously shielding legacy combustion-vehicle manufacturers from near-term transition costs.

With the administration showing no sign of reversing course, the debate over the future of the American auto industry — and its ripple effects on global manufacturing — is set to intensify.