An ill wind blows through the automotive industry. Yesterday, after the market closed, Rivian reported its results for the second quarter of 2025, and they weren't great. Unlike the last two quarters, Rivian did not make a gross profit, and it's estimating it will have a larger loss this year than first predicted. A day earlier, it was Lucid's turn: The Saudi-backed EV startup also missed analyst estimates for the quarter, and Lucid says it will build fewer cars this year than originally planned.
"We delivered solid performance despite a challenging macroeconomic backdrop, thanks to the adaptability and focus of our team in navigating a dynamic environment," said Taoufiq Boussaid in an elegant bit of business-speak that elides the true horror of the situation.
In both cases, the reasons for these underwhelming performances were the same: US government policies. Since taking office in January, President Trump and the Republican Party have been hard at work tearing up environmental regulations and overturning policies meant to encourage EV adoption, as well fomenting a global trade war through the imposition of irrational and costly tariffs.
One hit after another
At the end of September, the IRS clean vehicle tax credit, which provides up to $7,500 off the purchase of a new EV, goes away. Billions of dollars in already-appropriated funding have been clawed back to prevent states from paying for a network of high-speed chargers or to build out EV infrastructure in rural or deprived areas. And automakers are no longer being fined for breaching fleet fuel efficiency targets, which means those more-polluting OEMs need not bother paying for carbon credits, either.
But plenty of Trump's policy changes affect the rest of the auto industry, too. This is especially true in the ever-shifting tariff landscape. Thanks to decades of free trade with Canada and Mexico, car manufacturing spread out across North America. Even if final assembly of a car takes place here in the US, much of the content of that car will have come from Canada or Mexico, and some components can cross the border more than once in the manufacturing process from raw material to finished product.
All of that is now subject to new import tariffs, which drives up the cost of even domestically produced vehicles. Not even highly vertically integrated Tesla is immune.