How EV policy affects consumers and U.S. industry

EVs cost less to own long-term, but higher upfront prices still steer price-sensitive buyers toward gas cars. While price parity is fast approaching, it remains critical for America to level the playing field against policies in China and Europe, where strong government incentives are accelerating EV adoption and strengthening their automotive industries.

Programs like rebates, vouchers, tax credits and sales tax exemptions are powerful tools to promote American manufacturing and keep our automotive industry innovative and globally competitive. Additionally, reliable, stable purchase incentives encourage manufacturers to invest in domestic production, offer lower-cost models for all Americans and align sourcing strategies with broader trade policy goals.

Advanced driver-assistance systems are becoming increasingly common, making it essential for the federal government to establish a framework to enable the safe deployment of these technologies as they continue to evolve. Modernizing the current patchwork of state regulations in favor of a national program will not only enhance safety but also ensure that America remains at the forefront of this emerging technology.

Simultaneously, data privacy, cybersecurity and the ethical implications of autonomous decision-making must be carefully considered to build public trust and confidence in these advancements.

U.S. automotive fuel efficiency is regulated primarily through Corporate Average Fuel Economy (CAFE) standards. The CAFE program, established in the 1970s, sets fleet-wide fuel efficiency targets intended to reduce petroleum use and improve energy security.

The National Highway Traffic Safety Administration oversees CAFE. The Environmental Protection Agency previously maintained a separate federal greenhouse gas emissions program for new motor vehicles, but those vehicle GHG standards were rescinded in 2026. Fuel-economy standards remain technology-neutral: automakers can use a range of efficiency technologies, including hybrids and EVs, to improve fleet performance.

While direct-to-consumer sales are allowed across virtually all markets in the U.S., vehicle sales remain an anomaly. State laws vary widely: some permit direct vehicle sales, some allow them only for certain manufacturers and others require vehicles to be sold through franchised dealerships.

This legally required middleman sprouted from a desire to protect local franchisees from direct competition with auto companies themselves — but has instead come to inhibit the free market principles of competition and consumer choice. Automakers that have never used a franchise model can be restricted from selling directly in these states, limiting consumer access to their products and, in some cases, test drives or service in the state.

Special exemptions for certain individual companies further complicate the landscape and hinder competition by quite literally picking and choosing which direct-sales automakers may engage in commerce in the state. Deregulating and modernizing the automotive market is essential to lowering costs, increasing competition and ensuring a fair system that aligns with American values.

Job creation and EV sector competitiveness can be bolstered through incentives for local manufacturing, diversified domestic supply chains and innovation. The resulting infrastructure investment encourages companies to establish production facilities and build in America — onshoring high-quality jobs and reducing our reliance on foreign imports. This ensures U.S. competitiveness and independence in an increasingly electrified global car market while driving innovation, building a world-leading workforce and fostering long-term economic growth.

Investing in the expansion of reliable charging stations across the country gives the growing number of electric vehicle drivers access to more routes and communities, bringing economic benefits to the local businesses co-located with charging infrastructure, especially those in rural or underserved areas. Given these benefits, many states, utilities and other local funding entities continue to support expanding access to charging infrastructure through grant, rebate and incentive opportunities.

These efforts are increasingly complemented by policy solutions focused on improving charging reliability, improving the structure of utility tariffs and standardization of charging requirements. But getting the details right for these policies and funding opportunities is key. A simple, standardized approach is vital to continuing to scale access to charging and the resulting economic benefits.