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Trump expected to announce new fuel economy standards Wednesday in Detroit

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The automotive world has been filled with rumors for the past week about what the Trump administration plans to do about the latest Corporate Average Fuel Economy (CAFE) standards put in place by the previous Obama administration.

Now, two unnamed sources have revealed the president’s plan to fly to Ypsilanti, Michigan on Wednesday, March 15, to announce that his administration will revisit the action taken by the EPA at the end of the Obama administration.

Major car companies have been pressuring the president for months to undo the determination made by the EPA in January that locked in proposed CAFE standards to 54.5 mpg by 2025. Automakers maintain that rules calling for higher fuel economy standards will drive up the price of new cars. As a result, fewer cars will be sold because customers won’t be able to afford them, which will lead to the loss of up to 1 million manufacturing jobs in the US.

An administration official has confirmed the trip to the Detroit suburb but not the subject of the president’s remarks. Chief executives from all three US car makers are expected to be in attendance as well as officials from Japanese and German car companies.

Whatever the president announces is likely to lead to legal action by environmental groups who dispute industry claims that the rules as presently set will damage the US economy. The EPA was careful to document the reasons for its actions. Environmentalists maintain the rules are backed by copious amounts of data.

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Courts are reluctant to strike down rules put in place by administrative action that are based on detailed information. Rolling back the rules is not as easy as merely signing an executive order. The administration will need to convince the courts that the EPA data is inaccurate or unreliable in order to prevail.

The impact of the president’s announcement may have a significant impact on the market for electric vehicles and Tesla in particular. The president is expected to endorse new policies that would permit manufacturers to build more pickup trucks and SUVs, both of which struggle to meet the higher fuel economy standards environmentalists say are necessary to limit carbon emissions from motor vehicles.

 

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Tesla ramps production of its ‘new’ models at Giga Texas

The vehicles are being built at Tesla Gigafactory Texas in Austin, and there are plenty of units being built at the factory, based on a recent flyover by drone operator and plant observer Joe Tegtmeyer.

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Credit: Joe Tegtmeyer | X

Tesla is ramping up production of its ‘new’ Model Y Standard at Gigafactory Texas just over a week after it first announced the vehicle on October 7.

Earlier this month, Tesla launched the Tesla Model 3 and Model Y “Standard,” their release of what it calls its affordable models. They are priced under $40,000, and although there was some noise surrounding the skepticism that they’re actually “affordable,” it appears things have been moving in the right direction.

The vehicles are being built at Tesla Gigafactory Texas in Austin, and there are plenty of units being built at the factory, based on a recent flyover by drone operator and plant observer Joe Tegtmeyer:

The new Standard Tesla models are technically the company’s response to losing the $7,500 EV tax credit, which significantly impacts any company manufacturing electric vehicles.

However, it seems the loss of the credit is impacting others much more than it is Tesla.

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As General Motors and Ford are scaling back their EV efforts because it is beginning to hurt their checkbooks, Tesla is moving forward with its roadmap to catalyze annual growth from a delivery perspective. While GM, Ford, and Stellantis are all known for their vehicles, Tesla is known for its prowess as a car company, an AI company, and a Robotics entity.

Elon Musk was right all along about Tesla’s rivals and EV subsidies

Tesla should have other vehicles coming in the next few years, especially as the Cybercab is evidently moving along with its preliminary processes, like crash testing and overall operational assessment.

It has been spotted at the Fremont Factory several times over the past couple of weeks, hinting that the vehicle could begin production sometime next year.

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Tesla set to be impacted greatly in one of its strongest markets

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tesla norway
Credit: Robert O. Akander-Lima/LinkedIn

Tesla could be greatly impacted in one of its strongest markets as the government is ready to eliminate a main subsidy for electric vehicles over the next two years.

In Norway, EV concentrations are among the strongest in the world, with over 98 percent of all new cars sold in September being electric powertrains. This has been a long-standing trend in the Nordic region, as countries like Iceland and Sweden are also highly inclined to buy EVs.

Tesla Model Y leads sales rush in Norway in August 2025

However, the Norwegian government is ready to abandon a subsidy program it has in place, as it has effectively achieved what it set out to do: turn consumers to sustainability.

This week, Norway’s Finance Minister, Jens Stoltenberg, said it is time to consider phasing out the benefits that are given to those consumers who choose to buy an EV.

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Stoltenberg said this week (via Reuters):

“We have had a goal that all new passenger cars should be electric by 2025, and … we can say that the goal has been achieved. Therefore, the time is ripe to phase out the benefits.”

EV subsidies in Norway include reduced value-added tax (VAT) on cheaper models, lower road and toll fees, and even free parking in some areas.

The government also launched programs that would reduce taxes for companies and fleets. Individuals are also exempt from the annual circulation tax and fuel-related taxes.

In 2026, changes will already be made. Norway will lower its EV tax exemption to any vehicle priced at over 300,000 crowns ($29,789.40), down from the current 500,000, which equates to about $49,500.

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Tesla Superchargers most liked by Norway EV drivers

This would eliminate each of the Tesla Model Y’s trim levels from tax exemption status. In 2027, the VAT exemptions will be completely removed. Not a single EV on the market will be able to help owners escape from tax-exempt status.

There is some pushback on the potential loss of subsidies and benefits, and some groups believe that the loss of the programs will regress the progress EVs have made.

Christina Bu, head of the Norwegian EV Association, said:

“I worry that sudden and major changes will make more people choose fossil-fuel cars again, and I think everyone agrees that we don’t want to go back there.”

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Elon Musk was right all along about Tesla’s rivals and EV subsidies

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Credit: @Gf4Tesla/Twitter

With the loss of the $7,500 Electric Vehicle Tax Credit, it looks as if Tesla CEO Elon Musk was right all along.

As the tax credit’s loss starts to take effect, car companies that have long relied on the $7,500 credit to create sales for themselves are starting to adjust their strategies for sales and their overall transition to electrification.

On Tuesday, General Motors announced it would include a $1.6 billion charge in its upcoming quarterly earnings results from its EV investments.

Ford said in late September that it expects demand for its EVs to be cut in half. Stellantis is abandoning its plan to have only EVs being produced in Europe by 2030, and Chrysler, a brand under the Stellantis umbrella, is bailing on lofty EV sales targets here in the U.S.

How Tesla could benefit from the ‘Big Beautiful Bill’ that axes EV subsidies

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The tax credit and EV subsidies have achieved what many of us believed they were doing: masking car companies from the truth about their EV demand. Simply put, their products are not priced attractively enough for what they offer, and there is no true advantage to buying EVs developed by legacy companies.

These tax credits have helped companies simply compete with Tesla, nothing more and nothing less. Without them, their products likely would not have done as well as they have. That’s why these companies are now suddenly backtracking.

It’s something Elon Musk has said all along.

Back in January, during the Q4 and Full Year 2024 Earnings Call, Musk said:

“I think it would be devastating for our competitors and for Tesla slightly. But, long term, it probably actually helps Tesla, that would be my guess.”

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In July of last year, Musk said on X:

“Take away all the subsidies. It will only help Tesla.”

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Over the past few years, Tesla has started to lose its market share in the U.S., mostly because more companies have entered the EV manufacturing market and more models are being offered.

Nobody has been able to make a sizeable dent in what Tesla has done, and although its market share has gotten smaller, it still holds nearly half of all EV sales in the U.S.

Tesla’s EV Market Share in the U.S. By Year

    • 2020 – 79%
    • 2021 – 72%
    • 2022 – 62%
    • 2023 – 55%
    • 2024 – 49%

As others are adjusting to what they believe will be tempered demand for their EVs, Tesla has just reported its strongest quarter in company history, with just shy of half a million deliveries.

Will Tesla thrive without the EV tax credit? Five reasons why they might

Although Tesla benefited from the EV tax credit, particularly last quarter, some believe it will have a small impact since it has been lost. The company has many other focuses, with its main priority appearing to be autonomy and AI.

One thing is for sure: Musk was right.

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