The “One Big Beautiful Bill,” passed by the Republican-led House, poses a significant threat to the electric vehicle (EV) sector and the burgeoning battery industry in the United States. This bill, if enacted by the Senate and signed into law, could dismantle key incentives and policies designed to promote the adoption and manufacturing of electric vehicles. The primary concern revolves around the repeal of crucial EV tax credits and the imposition of new restrictions, potentially stifling the growth of the EV market.
According to an analysis by Princeton University’s REPEAT Project, the bill’s destruction of pro-EV tax credits could lead to a staggering 40% reduction in annual EV sales by 2030. This dramatic decrease would not only hinder the transition to cleaner transportation but also jeopardize America’s burgeoning battery manufacturing boom. The bill aims to offset tax cuts and increased spending on defense and immigration by undermining the Inflation Reduction Act (IRA), a landmark climate law that has been instrumental in fostering an American manufacturing renaissance since 2022.
Specifically, the bill seeks to eliminate rebates for consumers purchasing new North American-made EVs and impose stricter limitations on tax credits that incentivize domestic production of battery packs and cells. Furthermore, the inclusion of a $250 annual registration tax for EVs would increase the overall cost of owning and operating plug-in vehicles, making them less attractive to potential buyers. These measures, coupled with the Trump administration’s plans to roll back Biden-era tailpipe emission and fuel economy rules, and the Senate’s move to revoke California’s zero-emission vehicle mandate, could collectively derail the nation’s progress toward an EV future.
| Policy Change | Potential Impact |
|---|---|
| Elimination of EV Rebates | Increased cost for EV buyers, reduced demand |
| Restrictions on Battery Production Tax Credits | Reduced domestic battery production, increased reliance on foreign supply chains |
| $250 Annual EV Registration Tax | Higher cost of EV ownership, further dampening demand |
| Rollback of Emission and Fuel Economy Rules | Slower transition to cleaner fleets, reduced incentive for automakers to invest in EVs |
The potential consequences of the House bill extend beyond EV sales, posing significant risks to the battery industry and the broader job market. A slowdown in EV adoption would inevitably lead to reduced demand for batteries, impacting battery manufacturers and their suppliers. As the EV sector grows, it is expected to drive up domestic battery production while bringing battery costs down. However, with China currently dominating battery supply chains, any policy changes that hinder EV sales could further entrench China’s control over this critical industry.
The 45X tax credit, established by the IRA, directly supports battery makers by covering a portion of the cost of battery cells, modules, and critical minerals produced in the U.S. The House bill introduces new language that would exclude projects with even remote ties to China from receiving these credits, potentially complicating and hindering the development of domestic battery production. Similarly, the 30D tax credit for EV buyers includes provisions designed to encourage manufacturers to onshore and friendshore battery production. The House’s decision to terminate this credit at the end of 2026, six years ahead of schedule, could undermine these efforts and slow down the transition to a more secure and resilient battery supply chain.
According to the REPEAT Project, if the House bill becomes law and EV demand declines, planned U.S. battery capacity that is not operational by the end of 2025 may become unnecessary by 2030. This could lead to the closure of existing and soon-to-be-online battery factories, resulting in significant job losses. A recent report from the International Council on Clean Transportation (ICCT) estimates that repealing the EV provisions in the IRA could slash U.S. battery production by approximately 75% in 2030, from the currently projected 1,050 gigawatt-hours to just 250 GWh. This drastic reduction could eliminate 130,000 potential jobs in the EV sector by 2030, including 85,000 jobs in battery manufacturing alone.
| Metric | With IRA | Without IRA | Difference |
|---|---|---|---|
| U.S. Battery Production in 2030 (GWh) | 1,050 | 250 | -800 |
| Potential Job Losses in EV Sector by 2030 | N/A | 130,000 | 130,000 |
The ICCT’s analysis indicates that states like Michigan, Texas, Tennessee, Nevada, Kentucky, and Georgia stand to lose the most jobs if the House bill becomes law. These states have been actively investing in EV and battery manufacturing, and a reversal of pro-EV policies could have significant economic consequences. Despite these potential losses, only two Republicans joined all Democrats in voting against the bill, and that was because they sought even deeper cuts. This outcome underscores the deep political divisions surrounding climate and energy policy in the United States.
For example, Georgia Rep. Buddy Carter, whose district is home to Hyundai’s new EV, hybrid, and battery plant, supported the bill, calling it “fantastic.” Similarly, Nevada Rep. Mark Amodei, despite previously expressing support for preserving the 45X and 30D tax credits, ultimately voted to gut them. This disconnect between rhetoric and action highlights the complex political calculations that often influence legislative decisions.
Now, the bill moves to the Senate, where lawmakers face a July 4 deadline to send it to the president’s desk. The coming weeks and months will be critical in determining whether the battery boom continues or grinds to a halt. The outcome will depend on a variety of factors, including the willingness of moderate Republicans to break with their party, the ability of Democrats to rally public support for pro-EV policies, and the overall political climate in Washington.
