TL/DR –
The Trump administration is pulling back on tax incentives for electric vehicles (EVs) that were part of Biden’s Inflation Reduction Act. The withdrawal of benefits such as a $7,500 tax credit on new American-made EVs is predicted to cause EV sales to fall by 30% in 2027 and 40% in 2030. This rollback could jeopardize the growing EV industry in Indiana, which includes a 2.5 million square foot facility for General Motors and battery plants for Stellantis and Samsung SDI, translating to thousands of jobs and billions in investments.
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Looming Cut of Electric Vehicle Incentives May Impact Industry
In a turn of events, the electric vehicle industry in the United States faces uncertainty as incentives initiated during the Biden era appear on the chopping block under the Trump administration. These lucrative incentives, which have played a significant role in the industry’s growth, are outlined in Biden’s Inflation Reduction Act, which the Trump administration now seeks to overturn.
As revealed by CNHI State Reporter Carson Gerber in a July report, the Trump administration’s initiative, ironically dubbed the “Big Beautiful Bill,” seeks to eliminate these incentives. This move could undermine the progress made in encouraging Americans to adopt electric vehicles (EVs) and the industry’s expansion.
Under the Biden administration, incentives included a $7,500 tax credit on new American-made EVs, a $4,000 tax credit for used EVs, a $40,000 tax credit for heavy commercial EV trucks, and a 30% tax credit for personal EV charging infrastructure. These incentives have reportedly spurred a 60% increase in domestic EV sales since 2022.
Coming Changes
As of October, the first three incentives will cease to exist, while the tax credit for EV charging infrastructure will be phased out by the end of June 2026. A Princeton University study published in March suggests sales of battery-powered EVs could drop by approximately 30% in 2027 and 40% in 2030 without these incentives. Furthermore, the study indicates that this downturn could render 72% of all battery cell manufacturing operations in the U.S. obsolete.
This potential downturn presents a grave concern for the fledgling EV industry in Indiana, which could see 7,000 jobs, primarily in battery manufacturing, at risk by 2030, as per an April study by the International Council on Clean Transportation.
Impact on Indiana
Several manufacturers drawn by the Inflation Reduction Act’s incentives have set up production plants across Indiana. These include:
A 2.5-million-square-foot General Motors facility under construction in New Carlisle, which came at an investment cost of $3.5 billion and is expected to bring 1,700 new jobs to St. Joseph County.
In Kokomo, a partnership between Stellantis and Samsung SDI is building two battery plants, a combined investment of $5.7 billion, projected to create around 2,800 jobs.
Battery-component supplier ENTEK is investing $1.5 billion in a new facility in Terre Haute, while EV startup Slate is investing $360 million to transform a former printing plant in Warsaw into a production site for customizable electric trucks.
The tax incentive reversal by the Trump administration threatens to turn these new plants into potential boondoggles, casting a shadow over Indiana’s burgeoning EV industry.
Hope Amid Uncertainty
Despite the potential setbacks, there is still optimism for the future of the EV industry. Albert Gore, executive director of the Zero Emission Transportation Association and son of former Vice President Al Gore, believes companies that have invested in the future of electric vehicles will eventually see benefits. He mentioned in the CNHI article that, “The demand for good EVs that deliver on what people are looking for is always way higher than I think most people estimate, because in the end, they’re really good cars that people love to drive.”
With the potential for a change in administration and policy direction, it’s hoped that the path away from fossil fuels will regain favor, restoring a business climate that supports forward-thinking clean-energy initiatives.
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