Auto industry executives and analysts have lamented wide swings in federal policies that come every four to eight years, arguing that more moderate changes to emissions standards and electric vehicle rules would be easier for the industry to navigate.
But some are taking a bigger-picture look at the political landscape, accepting that uncertainty is a baked-in feature of the U.S. political system.
By accepting that reality, companies might be better prepared for frequent shifts in policies and regulations, said Kristin Dziczek, a policy adviser with the Federal Reserve Bank of Chicago.
"It's predictable that we're going to swing one way, and then it's predictable that when another party takes control in four years that they're going to swing the other way," Dziczek said at a Dec. 3 Alliance for Automotive Innovation conference. "We want certainty, and we want stable policy. But I think we have to look at the instability as stability."
President-elect Donald Trump's victory in the November 2024 election means the industry is in for a wide array of policy and regulatory changes. Trump is expected to pursue more tariffs on imported goods while curbing federal support for electric vehicle sales and the Environmental Protection Agency's emissions standards and challenging California's ban on new gasoline-powered vehicles.
It's a stark shift in political agendas following President Joe Biden's administration, which made reducing greenhouse gases and boosting EV sales and manufacturing top priorities. But the Biden administration was already a departure from the first Trump administration, which pursued significantly different policies than the Obama White House before it.
It is rare for either major political party to maintain control of the White House for more than eight years in the modern era. Since Democrats won a fifth consecutive presidential election in 1948, neither party has been victorious more than twice in a row except when Republicans won three straight in the 1980s.
"One ray of optimism for me … is that our political shifts are every four to eight years," Dziczek said. "We're not having these shifts that are 12 to 16 years, where you go along one path and then the pendulum swings back. This is more of a metronome. It goes one way then goes exactly the opposite way almost to the same degree."
The instability of U.S. regulations and trade policy, then, is something that automakers and suppliers are increasingly baking into their forecasts and investment plans.