Top auto insiders weigh in on both Harris and Trump, with their top issues.

• The automotive industry in Michigan continues to be a crucial factor in the presidential election, with Vice President Kamala Harris and former President Donald Trump focusing on the state during their campaigns.
• Electric vehicles, trade, tariffs, China, emissions regulations, and labor are the top issues for auto executives and lobbyists, who are preparing for all outcomes in the election, according to CNBC.
• Officials anticipate a Harris win to be a continuation, but not a replica, of the previous four years under President Biden, while they believe Trump would probably revert to policies and actions from his initial presidential term.

The 2024 presidential election has made the automotive industry a significant issue, with Michigan, home to the Motor City and 1.1 million automotive jobs, remaining a crucial swing state.

In recent weeks, Vice President Kamala Harris, former President Donald Trump, and their respective running mates and supporters have been frequent visitors to Michigan as they strive to sway undecided voters in the crucial Great Lakes State.

Since 2008, the winner of the state has always become the President, with Trump and Biden being examples in 2016 and 2020, respectively.

The 16 electoral votes of Michigan have played a significant role in the ongoing debate surrounding Autos. Despite the contrasting views of Trump and Harris, there are also areas of convergence, according to Jefferies analyst Philippe Houchois in an investor note on Monday.

Executives and lobbyists from several companies have spoken to CNBC on the condition of anonymity to discuss how they're preparing for each presidential candidate and a likely divided Congress, while major automakers and suppliers have shied away from publicly endorsing either candidate.

Industry executives and policy experts indicate that electric vehicles, trade, tariffs, China, emissions regulations, and labor are the top issues that automakers are keeping an eye on.

Harris vs. Trump

Officials anticipate a Harris win to be an extension, yet not a replica, of the previous four years under Biden. They believe she may be more empathetic towards businesses, but there are apprehensions.

Experts expressed concern about the clarity of some of her policies and potential appointments, as well as her alignment with the United Auto Workers and union President Shawn Fain, who has been a combative foe to automakers.

If Trump is reelected, automotive industry officials anticipate that he will likely revert to his initial policies and actions, but these positions may be more forceful than they were previously.

If he is in office, insiders predict that he may reverse or eliminate the federal emissions and fuel economy standards that were tightened during his first term, reigniting a conflict between California and other states that have their own standards, and possibly altering the Biden administration's Inflation Reduction Act of 2022 funding.

Officials stated that it would be challenging for Trump to entirely dismantle the IRA, but he could potentially eliminate or restrict EV subsidies through executive orders or other policy measures.

Insiders reported that automakers, suppliers, and other auto-related companies are preparing for possible outcomes and a potential split in Congress.

"The lobbyist and public policy expert stated that there is no ideal situation, and both candidates present both advantages and disadvantages. It is essential for our industry to consider all possible scenarios."

It is predicted by some Wall Street analysts that the "Detroit" companies, particularly Chrysler parent, would gain the most advantage with Trump and Republican control of Congress.

Despite Elon Musk's continued support for Trump, EV startups such as Tesla and Rivian would benefit more with a Democratic win, largely due to expected plans involving EVs and fuel economy requirements.

Emissions regulations

The main concerns for automakers are fuel efficiency and emission standards, particularly with regards to the 2026 model year regulations in California and other states that follow suit, such as Washington, Oregon, and New York.

The "Advanced Clean Cars II" regulations of 2022 mandate that 35% of 2026 model year vehicles, which will be introduced next year, must be zero-emission vehicles. Battery-electric, fuel cell, and to some extent, plug-in hybrid electric vehicles are considered zero-emission vehicles.

The California Air Resources Board reports that 12 states and Washington, D.C., have adopted the rules, but only about half of them have implemented them starting from the 2027 model year. These rules are part of CARB's Advanced Clean Cars regulations, which require 100% of new vehicle sales to be zero-emission models by 2035.

According to the Alliance for Automotive Innovation, only 11 states and the District of Columbia had an EV market share above 10% at the beginning of this year.

Despite the outcome of the White House election, many automakers will advocate for the postponement of CARB mandates. Additionally, they anticipate that Trump will either roll back or freeze the CAFE standards for model years 2027-2031.

Insiders predict that Harris will find a compromise with automakers on the standard, similar to how Biden has done to some extent.

EVs, IRA

The Inflation Reduction Act and other U.S. policies supporting electric vehicles are of great concern to automotive industry executives and lobbyists. If Trump regains power, there could be significant changes in regulations and incentives for EVs, leaving the industry in a state of uncertainty.

"Pablo Di Si, CEO of Volkswagen Group of America, stated on Sept. 24 during an Automotive News event that the outcome of the U.S. election will determine whether there will be mandates or not. He added that he will not make any decisions on future investments until the results of the election are known."

Electric vehicles went from being a topic of discussion among Democrats four years ago to a rallying cry for Republicans.

Trump and the Republican party have largely criticized electric vehicles (EVs), arguing that they are being imposed on consumers and will harm the U.S. automotive industry. Trump has pledged to repeal or weaken many vehicle emissions standards under the Environmental Protection Agency and provide incentives to encourage the production and use of these vehicles.

Historically, Democrats, including Harris, have supported EVs and related incentives.

Recently, Harris has been less vocal about supporting electric vehicles (EVs) due to slower-than-expected consumer adoption and pushback from consumers. She has stated that she does not support an EV mandate, such as the Zero-Emission Vehicles Act of 2019, which she co-sponsored as a senator, which would have required automakers to sell only electrified vehicles by 2040.

Peter Rawlinson, CEO of an EV company, stated on CNBC that he believes the EV industry in America is still in its early stages and requires further development, regardless of the outcome of the presidential election.

Rawlinson, whose company produces the most efficient EVs, advocates for the IRA to prioritize vehicle efficiency rather than battery size in its favor.

"He stated that it effectively incentivizes inefficient EVs by putting more batteries in."

Trade/tariffs and China

Both Trump and Harris have indicated that they intend to review the U.S. North American trade deal, known as the United States-Mexico-Canada Agreement, due to concerns about China's global expansion in the automotive industry.

The deal, which replaced the North American Free Trade Agreement (NAFTA), was negotiated under Trump's first term in office and took effect in 2020. However, both Trump and Democrats have stated that the agreement needs to be improved to better support American automotive production.

At the time of the USMCA renegotiation, Harris was one of 10 U.S. senators who voted against the deal, while Trump promoted it.

Mary Barra, the CEO of GM, stated last week that the company is closely monitoring the election and its potential effects on trade and tariffs.

"We will continue to engage constructively with the policymaking process, regardless of the election outcome. Even though some vehicles are manufactured outside the U.S., a significant number of jobs are created by our partners, viewed from an ally perspective. This is a very complex situation."

Trump's plan for the auto industry relies on tariffs. He has stated that he is open to significantly raising tariffs to prevent Chinese automakers from importing cars into the U.S. from factories in Mexico.

In the future, Chinese automakers are predicted to attempt to use the method of importing, as they increase sales and establish localized production plants in the country.

Trump's tariff proposals have been criticized by Harris as a "sales tax on the American people." Despite this, she has not specified any changes she would make to the current tariff structure if elected, including Biden's recent announcement of raising the tariff rate on EVs imported from China from 25% to 100%.

According to Jefferies, non-U.S.-based automakers, which account for 48% of U.S. production and 52% of USMCA production, are more positively leveraged to Harris winning.

Labor

Officials who spoke to CNBC expressed concern that a Harris win would result in increased power for organized labor in the automotive industry.

In modern times, no previous presidents have given more spotlight to the United Auto Workers and their president, Fain, than Biden and Harris did, including a speech at the Democratic National Convention.

The UAW has gained significant political influence, thanks to Fain and his advisors, who are outsiders to the union. However, there is a rift among unions, including the UAW, regarding their traditionally Democratic leanings and members.

UAW leaders have been instrumental in Harris's election campaign in Michigan and other states, despite the Teamsters' refusal to endorse a candidate due to internal division.

According to the UAW, recent internal polling indicates a growing preference for Kamala Harris among voters, with her lead over Donald Trump expanding in the past month.

The union has been trying to organize as many auto plants as possible after winning major contract gains in negotiations with traditional Detroit automakers, while Trump and Fain have frequently criticized each other over the past year.

In 2016, UAW members and other blue-collar workers were considered vital supporters for Trump's first presidential campaign against Hillary Clinton.

— CNBC's Michael Bloom contributed to this report.