TROY, Michigan — The president in North America of General Motors Co.'s electric vehicle battery partner says 50% penetration of EVs in the United States by 2035 is an "aggressive" target, as many investments in the industry are put on hold from fluctuating federal policy.

The forecast is a dramatic change from just a couple of years ago. In January 2021, GM had set its eyes on 100% EV sales by that year, and the Biden administration months later announced its goal of a 50% EV market by 2030. But as vehicle availability returned following pandemic-induced inventory shortages, it became clearer that higher EV prices, range anxiety, limited access to charging infrastructure and slow charging speeds were bigger obstacles than expected.

And with the new Trump administration reevaluating EV subsidies and regulations on greenhouse gas tailpipe emissions— not to mention 25% tariffs on Canada and Mexico that affect the entirety of automobile manufacturing — a paralyzing shock has been sent through the sector, said Bob Lee of LG Energy Solution Ltd.

"That does change some of the timeline for investment," he told The Detroit News at a Society of Automotive Analysts event about President Donald Trump's statements on EV policy. "On top of that, because of the tariff, and especially the Canada-Mexico tariffs, that's added on another layer of uncertainty, and that's also led to people withholding making investment decisions. So overall, the auto industry right now is not in a position to make big investment decisions. It started off just within electrification, battery-related topics, but now it's gone beyond that to the entire industry."

Tariffs can be helpful in nurturing an industry, Lee said, but they should be strategic. If that's the goal, there shouldn't be a tariff on what that industry needs in order to grow like key minerals and equipment. The United States has capacity for EVs and battery production, but it's the inputs to those that still need to be built up, Lee said.

Companies that want to supply to LGES and manufacture in the United States have stopped exploring that because of all the uncertainty, Lee added. For its part, LGES has built or is building eight battery plants in the United States, including six in partnership with other companies like GM.

LGES also has NextStar Energy, a joint-venture battery plant in Windsor, Ontario, with Stellantis NV, the maker of Chrysler, Dodge, Jeep and Ram. Trump has communicated that the delayed 25% tariffs on vehicles and parts in compliance with the United States-Mexico-Canada trade agreement coming from the two neighboring countries will take effect on April 2.

"We're all kind of anxious and seeing how it resolves," Lee said. "Most of my colleagues and I, when we talk about it, we can't make any decisions yet but I think we're looking at a lot of different scenarios."

Although the road to increasing EV sales is bumpier than expected, Lee said he doesn't see decreases in EVs but rather slow and steady growth. There were 1.3 million EVs sold in the United States last year, representing about 8.2% of all new vehicle sales. A 33% forecast by 2030 is probably not unrealistic, Lee said, given consumer data on purchasing behavior and contentment after consumers buy an EV.

Although the slowdown in the EV sector does create challenges for greater expansion in the United States, in other respects, it has been great for LGES's business, Lee noted.

"Now, when they think about, 'Who am I going to do battery business with,' there's only a small number of companies that most customers feel are going to be around, responsible, that are trustworthy, and we're one of them," he said, forecasting consolidation. "So we're actually getting a lot of new inquiries as well."

That includes for the battery plant in Lansing that LGES is working to acquire in full from GM. The Detroit automaker in December said it was selling its stake in the site as a part of a plan to improve profitability returns on invested capital. Lee said LGES is finalizing plans to supply an "important and stable" customer out of that plant.

Lee also acknowledged that federal incentives for battery manufacturing and EVs are an important tool as the industry grows, but they are not a long-term solution. He said he's also discussed with Detroit Mayor Mike Duggan and Gov. Gretchen Whitmer about making roads or parts of downtown exclusive to EVs and self-driving vehicles to encourage testing and adoption of the technology. Similar rules have been adopted in places like China and Europe.

"Why not Detroit?" Lee said. "It would put the city in a slightly different light. If there's something innovative and new going on, you would expect that in San Francisco, right? If somebody said that in San Francisco, it wouldn't surprise you. But I mean, we're talking about innovation and the auto industry — why not take ownership of it? We built it."

The News on Friday morning sent requests for comment on the suggestion of EV-exclusive zones to representatives for the Democratic governor and mayor, who did not immediately respond. The state already is testing a three-mile pilot for a proposed 39-mile "smart" road envisioned to run between Wayne and Washtenaw counties with infrastructure intended to disseminate information to motorists using connected and autonomous vehicles.

To encourage EV adoption, LGES also recognizes the importance of the charging network, an area the battery supplier this year is starting to examine more closely, including deployment, standardization and energy storage applications, Lee said.

"We have a lot invested in the U.S., and we have a lot of information that we can share," he said. "It's just trying to be more proactive in talking about electrification, batteries, to educate folks, and taking a more proactive position there."

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