The Trump Administration's Impact on Autonomous Vehicles: A New Regulatory Horizon
The autonomous vehicle (AV) industry stands at the forefront of innovation, poised to revolutionize transportation globally. As the second Donald Trump Administration takes office on Jan. 20, 2025, the AV sector faces a mix of uncertainty and opportunity. The incoming Trump Administration's deregulatory approach, history of advancing pro-AV policies in its first term and Elon Musk's prominent role in the campaign have generated a widespread belief that the next four years will be transformational for the development and deployment of emerging technologies, such as AVs.
Enthusiasm for Innovation and Technology
During the first Trump Administration, the U.S. Department of Transportation (DOT) published AV guidance, established AV technology principles, held AV public workshops, expanded the Automated Vehicle Transparency and Engagement for Safe Testing (AV TEST) Initiative and produced an AV Comprehensive Plan. The White House Office of Science and Technology Policy (OSTP) was also actively involved in advancing AV policy to establish the U.S. as a favorable environment for AVs. The Biden Administration opted not to continue this drumbeat of federal policy on AVs originating out of the DOT Office of the Secretary and the White House.
Members of President-Elect Trump's transition team are reportedly seeking a more flexible federal framework for self-driving vehicles as a key priority for the DOT. This is consistent with the administration's broader enthusiasm for innovation and technology, such as artificial intelligence (AI) and cryptocurrency. The Trump Administration's focus on innovation and technology is based on fundamental beliefs that the U.S. should lead emerging technologies globally and that emerging technology success will spark greater financial investment in U.S. companies and support new jobs and a robust economy.
Regulatory Environment and Safety
The incoming Trump Administration is expected to adopt a voluntary and cooperative approach with the AV industry while maintaining safety as a top priority. Politicians, regardless of their stance on technology, generally want to be on the side of public safety, especially in the event of high-profile incidents involving newer technologies. Therefore, it is expected that the administration will take necessary enforcement actions if there is an unreasonable risk to safety, especially in the event of high-profile incidents involving autonomous systems. However, the administration's proposed deregulatory agenda will likely include a proposal to eliminate or modify a National Highway Traffic Safety Administration (NHTSA) requirement for crash data reporting involving AVs, a move that some safety advocates strongly oppose.
During the final weeks of the Biden Administration, NHTSA proposed a new program for the evaluation and oversight of certain vehicles equipped with automated driving systems. The ADS-Equipped Vehicle Safety, Transparency and Evaluation Program (AV STEP) would serve as a voluntary national framework for the evaluation and oversight of certain vehicles equipped with automated driving systems. It remains uncertain if the incoming Trump Administration will allow the Biden Administration's AV STEP proposed rulemaking to continue and modify it before it is finalized or if it will withdraw the proposal and begin from scratch.
Challenges and Opportunities
The Trump Administration's focus on reducing regulations through the proposed presidential advisory commission with the moniker Department of Government Efficiency (DOGE), led by AV stakeholder Elon Musk and entrepreneur Vivek Ramaswamy, presents both challenges and opportunities for the AV industry. Musk has proposed streamlined federal regulations and raising caps on AV deployment exemptions that could simplify and expedite the approval process for new vehicle models, as well as accelerate the deployment of autonomous mobility nationwide. However, the administration's broader deregulatory focus also could result in the elimination of regulations that the automotive industry has been built around or rescinded funding for subsidies, grants and infrastructure investments in the transportation industry. A highly regulated industry, safety incidents in the automotive sector have underscored the need for robust oversight, as rapid deployment without accountability could compromise public trust and hinder adoption. Musk's recent support for cutting electric vehicle (EV) tax credits could significantly impact the industry, which relies heavily on price advantages for new vehicle models to enter the market.
U.S. and Chinese Global Competition
The intensifying global competition between the U.S. and China will significantly shape the future of the automotive industry under the new Trump Administration. China has made remarkable strides in both the EV and AV sectors. U.S. automakers have raised concerns about the rapid deployment of Chinese AVs on U.S. roads and alleged unfair competition based on Chinese government subsidies. China has taken a comprehensive effort to encourage the adoption of AVs with a nationwide regulatory framework, widespread installations of smart-city technology such as 5G networks and vehicle-to-everything (V2X) communication systems and a concerted effort to accelerate adoption of AVs.
The broader geopolitical tensions between the U.S. and China are impacting the automotive sector, particularly in trade and supply chain dynamics. The Biden Administration has implemented stringent export controls on semiconductor technologies, vital for developing Avs and EVs. On Sept. 13, 2024, the Biden Administration finalized its review of tariffs on Chinese goods and increased tariffs on Chinese electric vehicles to 100 percent. On Sept. 26, 2024, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) published a notice of proposed rulemaking to regulate the import and sale of certain Chinese "connected vehicles" (CVs) and associated hardware and software. These actions are part of a broader strategy to address competition and national security issues spurred by China's technological rise. In response to the protective actions taken by the U.S., China has announced countermeasures, including anti-dumping actions, and issued a proposal that would impose new export restrictions on technologies essential for extracting EV-related minerals.
Expect the heightened tensions between the U.S. and China to result in continued tit-for-tat retaliatory actions and investigations into the activities of each country. The United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party was reauthorized by House rules for the 119th Congress and is expected to be active on issues impacting the AV industry. In November 2023, the China Select Committee led a bipartisan letter with the House Energy & Commerce Committee signed by 14 members of Congress to 10 Chinese AV companies raising concerns over their handling of data collected while testing AVs in the U.S. Also in November 2023, the China Select Committee called for an investigation into Chinese LIDAR companies to determine whether their activities justify inclusion on three U.S. government-restricted entities lists.
Looking Forward
The Trump Administration's impact on the AV industry will be shaped by its enthusiasm for technology, commitment to safety and efforts to embed certain deregulatory policies to the greatest possible extent. By strategically engaging with the administration and leveraging its focus on innovation, the AV industry can continue to make significant strides in the coming years. The balance between deregulation and safety will be crucial to ensuring that the rapid deployment of AVs and other emerging technologies does not compromise public trust. As the industry navigates these changes, it will be essential to monitor developments closely and adapt to the evolving regulatory and geopolitical landscapes to foster growth and innovation. Holland & Knight policy analysts will work with Congress and the incoming administration on issues that impact the AV industry.
20 Posts in 20 Days Leading to Inauguration Day on Jan. 20
Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Donald J. Trump's inauguration, with insights regarding likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.