Removing IRA credits could kill electric investments
Former President has been outspoken against electric vehicles
A new U.S. administration could mean a halt in the growth of EV sales. That’s what Nissan and GM are saying after former president Trump’s advisers said he plans to slash the green-tech Inflation Reduction Act if elected in 2024.
The IRA is responsible for big consumer incentives for EV buyers. That is if they buy electric models built (and with parts like the battery sourced from) the U.S. and a few of its trading partners. The result of the legislation has been tens of billions in investments into building batteries and EVs in the country.
The Financial Times reports that Nissan’s CEO said that “penetration of EVs will be much more promising with that kind of act,” meaning if the IRA remained in place. GM’s CFO said that the IRA had “tremendous benefit.” “We don’t want to end up saying this vehicle program is really good with the IRA, only to have the IRA go away, and now suddenly, the vehicle can’t make money,” he said.
Tax credits of up to $7,500 help EV buyers, but also help automakers by driving sales, improving scale and thus profitability. Removing them could make it harder for automakers to turn a profit as the tech matures.
Korean battery companies including LG Energy Solution, SK On, and Samsung SDI have all started joint ventures with automakers in the U.S., and are spending billions on battery factories. Removing the IRA or any move that cuts EV sales or removes battery sourcing restrictions could curb or stop these investments, hurting the states where they are set to be made.