Donald Trump is returning to the White House as the US’ 47th president, leaving the world questioning what will happen with the Inflation Reduction Act (IRA).

In an early morning speech on Wednesday, Trump highlighted the US potential with “liquid gold” referring to the country’s oil reserves, which he claims to be larger than Saudi Arabia and Russia. He also declared his love for Elon Musk, a key ally in his victory, whom Trump described as a “star” and “super genius” while talking about Musk’s success with space rockets and the satellite communication system, Starlink.

Electric vehicles, deemed another Musk success story, did not make it into the speech. Having criticised both electric and hydrogen fuel cell vehicles, it remains to be seen if Trump’s alliance with Musk will change his stance on road transport decarbonisation.

“With another Trump presidency from 2025, various regulations are likely to change, resulting in a further slow-down of EV sales in North America and the domestic battery market,” comments Wolfgang Bernhart, senior partner and global head of automotive at Roland Berger. “Republicans are likely to target EV incentives and tax credits, potentially restricting their accessibility, particularly for commercial vehicles and leases.”

Currently, the forecast is for all-electric vehicles (BEVs) to hold a sales share of 46% in 2030 and 66% in 2035. However, Bernhat now expects that to be lower at 30% in 2030 and 40-50% in 2035, in a base case scenario.

For the battery market, that means that instead of the pre-election view of around 1 terawatt-hour (TWh) in 2030 and 1.4 TWh in 2035, he expects around 0.7-0.8 TWh in 2030 and 1.1-1.2 TWh in 2035. There will likely be further potential downsides on the BESS (stationary energy storage) side, he adds.

Benhart also believes more stringent Environmental Protection Agency (EPA) regulations for upcoming model years may be scrapped, and that California’s emissions regulations could face legal challenges and potentially revocation. Tariffs on vehicles and components imported from Mexico are expected to be increased, impacting imports but enforcing the case of producing batteries in the US.

On the hydrogen front, a Republic administration could mean the US IRA’s hydrogen production tax credit (45 V) is “likely out of the window,” says Leon de Graaf, sustainability advocate at Brussels-based consultancy Sustainable Public Affairs. “Even if Biden rushes it through before January, the risk is it’ll be short-lived. Because while it might benefit some of Trump’s oil major friends, he has sworn to dismantle any Biden-era mechanisms, so why would he keep this costly one alive?”

According to Carbon Brief, a Trump administration could add 4 billion tonnes of US emissions by 2030, compared with incumbent Joe Biden’s plans. “This is enough to negate – twice over – all of the emissions savings from deploying wind, solar and other clean technologies around the world over the past five years,” it warns.

Clean technologies companies are likely to maintain their wait-and-see approach until after 20 January, when Trump could provide further clarity on his plans and the future of the IRA.