What Trump Means for Tech: The Outlook for EVs and Clean Energy

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[00:00:32] Welcome to Tech News Briefing. It's Wednesday, January 29th. I'm Bao Lin for The Wall Street Journal. All this week we are exploring what President Trump's second term could mean for the tech industry over the next four years and beyond. During his first week in office, Trump signed broad executive orders related to energy production that were aimed at fulfilling his campaign promise to make oil and gas a pillar of U.S.

[00:01:02] prosperity and global dominance. Meanwhile, the president has embraced artificial intelligence and cryptocurrencies. Tech that requires giant data centers and could potentially consume as much energy as renewable and fossil fuels can produce. Today, we are looking at Trump's energy agenda and how it could impact tech.

[00:01:24] First up, our reporter Scott Patterson breaks down the energy directives and tells us what the arrival of a more efficient AI model from the Chinese AI firm DeepSeq could mean for the AI energy boom. So, Scott, during President Trump's first week in office, he signed some pretty broad executive orders aimed at, quote, unleashing American energy. Which sectors do these orders affect?

[00:01:54] It's not entirely clear right now. These orders are directives to agencies to implement some broad stroke ambitions of President Trump to do, as he says, create energy dominance in the United States. It's definitely directed at fossil fuels, at natural gas, at exports of liquid natural gas.

[00:02:18] But there are other people in the administration, including Republicans, who think that other forms of energy should be supported by the administration, including renewables. The one sector that he has specifically said he is not in favor of and mentioned in some of these executive orders is offshore wind. Right. And President Trump has also declared a national energy emergency. What does that mean in practice? A lot of people are trying to figure out what that means.

[00:02:48] The United States is currently producing more crude oil than any country ever in the history of the world. So that's not an emergency. But when you talk to people in the administration, people like Doug Burgum, who Trump named as energy czar of his administration, he's also nominated to be the director of interior. They will say that the emergency is about energy demand.

[00:03:13] We're entering a period of rising energy demand and there's concerns that the national grid will be strained. It won't be able to provide enough electricity for the demand. And a big component of that are data centers that are cropping up all across the country or their plans to build a lot more of these data centers.

[00:03:33] And speaking of energy demands, just in the last week, the Chinese AI company DeepSeek said that it trained a very sophisticated AI model far more efficiently than its American competitors. So what does DeepSeek's new model potentially mean for American energy demands that power AI? One outcome that you could see is, OK, well, they did it for less power.

[00:03:57] That means we can make even better AI using our existing plans to build a lot more data centers. So it's really unclear that one thing you could take away from the big market sell-off that we saw on Monday was that a lot of these companies were just overinflated. Too many people had bought into them. NVIDIA, the company that makes these parallel processing chips, lost almost $600 billion in market cap.

[00:04:23] And you also saw some big utility companies lost a lot because priced into those stocks have been anticipation of a lot of demand coming on. And even with the emergence of DeepSeek, how could President Trump's enthusiasm for AI and cryptocurrency really buoy clean energy businesses?

[00:04:42] Yeah. You know, assuming that they will continue to go ahead and build these data centers, a lot of people who look at how the energy can be built to provide the power for the data centers, people look at renewables because they can be built faster than almost any other competing generation source. And that includes natural gas, power plants. You can deploy a lot of solar and batteries very quickly.

[00:05:05] But when you read between the lines of what people in the administration are saying, I do think that they're going to put their thumb on the scale for natural gas. The fossil fuel industry is big backer of Donald Trump. He can try to direct the industry to move in that direction. But when you look at the most efficient and optimal way to provide power for these things, it would include a hefty dose of renewables.

[00:05:29] And in the past couple of years, actually, the largest amount of electricity generation created by far is from renewable energy like solar and wind and some other sources. And more will be built because the companies behind a lot of this AI and data centers are companies like Google, Apple, Amazon. All these companies have really ambitious decarbonization goals that they're pursuing.

[00:05:59] And they either have to chuck those goals or they have to look to get renewable energy to supply the power for these data centers. That was WSJ reporter Scott Patterson. Coming up, President Trump's policies could reshape the American auto industry well beyond EVs. We'll find out how after the break.

[00:06:21] A major place where President Trump's energy agenda will be felt is the electric vehicle industry. Specifically, Trump promised to undo his predecessor's push for the U.S. to adopt EVs.

[00:06:46] On his first day in office, he signed a series of executive orders, including one eliminating Biden-era climate regulations tied to EV production. Here to tell us what that'll mean for auto manufacturers and consumers is WSJ Deputy Bureau Chief for Autos, Mike Kalias. So, Mike, on Trump's first day in office, he signed a series of executive orders, some on energy production,

[00:07:12] and one order that will eliminate what he calls the, quote, electric vehicle mandate. What does this order mean in practice? That refers to two things. One, there was an executive order signed by President Biden in 2021 with the support of at least some automakers that made it a formal goal for the U.S. to reach 50% new car sales being electric by 2030. Now, virtually nobody thinks that's going to be achievable at this point.

[00:07:40] I mean, demand isn't as hot as it was back in 2021, and the industry needs more time to get costs down and build out the charging network. But that was really just a symbolic goal. There weren't really regulatory teeth to that. The bigger thing is President Trump has talked about a rollback of the EV mandate. What that refers to is he wants to water down the actual federal regulations that car companies must meet for, like, tailpipe emissions and fuel economy.

[00:08:06] The Biden administration really ratcheted those requirements up for climate reasons and to encourage more EVs. And, you know, the law doesn't technically require companies to sell full electrics, but in order to meet those rules, toward the end of the decade, EVs would need to make up, like, a significant portion of sales. So, in effect, the rules as they stand now require car companies to offer and sell more EVs to meet those requirements. And how would the executive order affect EV makers and consumers?

[00:08:35] For pure EV companies like Tesla, I could actually see it being a good thing because the legacy car makers that have been coming out with a lot of new electric models, they might not try as hard to sell them if they're not required to. So, it could, over time, end up reducing competition a bit for Tesla and Rivian and companies that just make EVs. For consumers, you know, when the president refers to an EV mandate, it's normally in the context of the consumer being forced to buy electrics. And that's really not the case.

[00:09:03] I mean, there are plenty of choices in the showroom today from pure gas and diesel engine cars to an increasing number of hybrids and plug-in hybrids. And then there's the pure electrics. And so, you know, if, like, the EPA regulations were watered down, for example, it may have the effect of there being a bit less choice for consumers in the EV market because, again, the pressure won't be on those traditional car makers, at least for a while, to offer those. And what about charging infrastructure?

[00:09:30] Do any of Trump's executive orders affect EV charging infrastructure? Yeah, I mean, he's essentially put a pause on billions of dollars in federal funding available that have been kind of being funneled to the states. This goes back to the 2021 infrastructure bill that the Biden administration pushed through. A lot of that money has already been allocated to the states and actually, in turn, divvied out to different charging companies.

[00:09:57] And so charging stations have been going in with that. It was a $5 billion for highway charging and another few billion for more urban areas. It's kind of a mess because a lot of that money has already been spent. Some of it is in process. And what happens with that is still very unclear. So the states are trying to figure this out. Charging companies who were in line to get that money are wondering what's happening. But for now, we know that the intent, at least from the Trump administration, is to freeze that funding.

[00:10:25] Right. And let's move on to battery plants. The Biden administration set aside tens of billions of dollars in federal money to support more than a dozen new U.S. battery plants. What's the status of these plants and what could happen to this money under President Trump? There were a few big pots of money available under the Biden administration's big climate program. The Inflation Reduction Act became law a few years ago.

[00:10:49] And the biggest one is this money set aside to pay companies that make batteries in the U.S., mainly for EVs. The idea was not only is the government trying to help get the electric vehicle industry up and running, but also to create U.S. jobs by encouraging those factory investments. So it's a huge sum of money. The government projected at one point spending in the neighborhood of like $150 billion on this battery program through early next decade.

[00:11:12] So there's really a lot riding on what happens with that, both for the car makers and battery companies, which they've partnered with. But also there's like more than a dozen towns, mostly in like Midwest and southern states, places like Georgia, Tennessee, Kentucky, where these battery factories are under construction or in development. And they know how much the companies need those subsidies. And so they're counting on that money because they're hopeful for future jobs.

[00:11:38] So many consumers bought electric vehicles because of the $7,500 federal tax credit. But the Trump administration could get rid of that. What's the likelihood that Trump will actually go through with it? He's certainly on record as saying he wants to see it go. So is Elon Musk, his close advisor, who runs the biggest EV company in the world. But really, in the end, I don't know that it's going to be completely up to the administration. That program was set by law and big changes to it are probably going to have to go through Congress.

[00:12:08] That's what most analysts expect. And so we do have a Republican-controlled Congress now. And we're just going to have to see what happens with that. So Trump has talked about putting tariffs on goods from Mexico and elsewhere. How could this affect the EV market? Yeah, I mean, that's a huge issue broadly for the auto industry, for both gas power cars and EVs. Specifically for EVs, I know there's a number of automakers who make electric cars in Mexico.

[00:12:36] General Motors makes an electric Equinox and Blazer SUV. Ford makes the Mustang Mach-E there. Unless there's some exceptions, those could be potentially subject to tariffs. There's also a lot of parts, things like wiring harnesses that basically push all of that electricity around under the hood of an EV. Much of that is made in Mexico, and that would be subject to tariffs too. That was WSJ Deputy Bureau Chief for Autos, Mike Goliath. And that's it for Tech News Briefing.

[00:13:07] Today's show was produced by Julie Chang with supervising producer Catherine Millsop. Logging off, I'm Belle Lin for The Wall Street Journal. We will sign back in this afternoon with TNB Tech Minute. Thanks for listening.