WSJ Tech News Briefing Summary
Episode: What Trump Means for Tech: The Outlook for EVs and Clean Energy
Release Date: January 29, 2025
Host: Bao Lin, The Wall Street Journal
Introduction
In this episode of Tech News Briefing, Bao Lin explores the potential ramifications of President Donald Trump's second term on the technology sector, with a particular focus on electric vehicles (EVs) and clean energy. The discussion delves into Trump's recent executive orders, his stance on artificial intelligence (AI) and cryptocurrencies, and their broader implications for energy production and the tech industry.
Trump’s Energy Directives and Their Impact on Tech
Bao Lin opens the discussion by highlighting President Trump's initial executive orders aimed at revitalizing American energy production. These orders prioritize fossil fuels and natural gas while showing tentative support for renewables, excluding offshore wind initiatives.
"During President Trump's first week in office, he signed broad executive orders related to energy production that were aimed at fulfilling his campaign promise to make oil and gas a pillar of US prosperity and global dominance."
— Bao Lin [00:33]
Scott Patterson, the WSJ reporter, further examines these directives:
"President Trump 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."
— Bao Lin [00:33]
Impact of AI and Data Centers on Energy Demand
Scott Patterson introduces the segment on energy directives, prompting insights from an Energy Expert about the administration's ambitions:
"These orders are directives to agencies to implement some broad stroke ambitions of President Trump to ... create energy dominance in the United States. It's definitely directed at fossil fuels, at natural gas, at exports of liquid natural gas."
— Energy Expert [01:54]
The discussion shifts to the declaration of a national energy emergency:
"We're entering a period of rising energy demand and there's concerns that the national grid will be strained. ... 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."
— Energy Expert [02:45]
Emergence of Efficient AI Models and Market Implications
The episode highlights Deepseek, a Chinese AI firm that has developed a more energy-efficient AI model compared to its American counterparts:
"They trained a very sophisticated AI model far more efficiently than its American competitors. ... It could mean we can make even better AI using our existing plans to build a lot more data centers."
— Scott Patterson [03:51]
However, the Energy Expert points out the market repercussions:
"A lot of these companies were just overinflated. ... Nvidia lost almost $600 billion in market cap. ... utility companies lost a lot because priced into those stocks have been anticipation of a lot of demand coming on."
— Energy Expert [03:51]
Clean Energy vs. Fossil Fuels Under Trump's Agenda
Despite Trump's support for AI and data centers, the Energy Expert discusses the tension between renewables and fossil fuels:
"Assuming that they will continue to go ahead and build these data centers, ... people look at renewables because they can be built faster than almost any other competing generation source."
"I do think that they're going to put their thumb on the scale for natural gas. ... the fossil fuel industry is a big backer of Donald Trump."
— Energy Expert [04:42]
He emphasizes that major tech companies like Google, Apple, and Amazon are driving decarbonization efforts, necessitating renewable energy sources for their data centers.
Impact on the Electric Vehicle (EV) Industry
Rolling Back EV Mandates
Scott Patterson transitions to Trump's influence on the auto industry, particularly EVs. He brings in Mike Golias, WSJ Deputy Bureau Chief for Autos, to discuss the rollback of Biden-era EV mandates:
"Trump signed a series of executive orders, including one eliminating Biden era climate regulations tied to EV production."
— Scott Patterson [07:02]
Mike Golias explains the practical implications:
"President Trump has talked about a rollback of the EV mandate. ... he wants to water down the actual federal regulations that car companies must meet for like tailpipe emissions and fuel economy."
— Mike Golias [07:50]
This rollback could reduce regulatory pressure on traditional automakers to produce EVs, potentially diminishing competition for companies solely focused on electric vehicles like Tesla and Rivian.
Charging Infrastructure
The discussion moves to the impact on EV charging infrastructure:
"Trump administration is putting a freeze on federal funding available that have been ... funneled to the states."
— Mike Golias [10:04]
This halt affects the allocation of funds from the 2021 infrastructure bill, creating uncertainty for ongoing and planned charging station projects across the country.
Battery Plants and Federal Funding
Mike Golias addresses the future of battery plant investments:
"The government projected spending ... $150 billion on this battery program through early next decade."
"More than a dozen towns ... places like Georgia, Tennessee, Kentucky ... are counting on that money because they're hopeful for future jobs."
— Mike Golias [11:12]
Under Trump's administration, the continuation of such funding remains uncertain, jeopardizing the establishment and expansion of domestic battery manufacturing facilities essential for the EV supply chain.
EV Tax Credits
The potential elimination of EV tax credits is another critical concern:
"Consumers bought electric vehicles because of the $7,500 federal tax credit, but the Trump administration could get rid of that."
— Mike Golias [12:08]
However, Mike Golias notes that substantial changes to tax credits would likely require Congressional approval:
"Big changes to it are probably going to have to go through Congress. That's what most analysts expect."
— Mike Golias [12:21]
Tariffs on EV Components
Trump's consideration of tariffs on goods imported from Mexico poses additional challenges:
"There's a number of automakers who make electric cars in Mexico. ... Those could be potentially subject to tariffs."
"Much of that is made in Mexico and that would be subject to tariffs, too."
— Mike Golias [12:45]
These tariffs could increase production costs for EV manufacturers reliant on cross-border supply chains, potentially slowing down EV adoption and increasing prices for consumers.
Conclusion
President Trump's second-term policies present a complex landscape for the technology and clean energy sectors. While supporting AI and cryptocurrency may drive innovation, the emphasis on fossil fuels and the rollback of EV mandates pose significant challenges to the growth of clean energy and electric vehicles in the United States. The uncertainty surrounding federal funding for charging infrastructure and battery plants further complicates the outlook. These shifts could reshape the competitive dynamics within the auto industry and influence consumer choices, potentially slowing the transition to sustainable energy solutions.
"I'm Bao Lin for the Wall Street Journal. ... We'll sign back in this afternoon with TNV Tech Minute."
— Bao Lin [13:29]
Notable Quotes:
- Bao Lin [00:33]: "What President Trump's second term could mean for the tech industry over the next four years and beyond."
- Energy Expert [01:54]: "It's not entirely clear right now... It's definitely directed at fossil fuels, at natural gas, at exports of liquid natural gas."
- Energy Expert [02:45]: "We're entering a period of rising energy demand and there's concerns that the national grid will be strained."
- Mike Golias [07:50]: "President Trump has talked about a rollback of the EV mandate. ... he wants to water down the actual federal regulations that car companies must meet for like tailpipe emissions and fuel economy."
- Mike Golias [10:04]: "Trump administration is putting a freeze on federal funding available that have been ... funneled to the states."
- Mike Golias [12:21]: "Big changes to it are probably going to have to go through Congress. That's what most analysts expect."
This comprehensive summary encapsulates the key discussions and insights from the episode, providing a clear understanding of how President Trump's policies may influence the technology, energy, and automotive sectors in the United States.