The U.S. auto industry has just started finding its footing with electric vehicles (EVs). Jobs are now booming across the Midwest and the new “battery belt” in the South.
But new evidence shows that the rollback of federal tax and regulatory policies poses critical risks to this progress.
A recent report commissioned by Environmental Defense Fund found that EV manufacturing investments reached almost $200 billion over the last ten years. 65% of that came in the last two and a half years – since Congress passed laws that spurred that growth, including the Inflation Reduction Act (IRA).
The report also found that manufacturers have announced 195,000 EV-related jobs in the U.S., and that EV and battery manufacturing could generate up to 826,000 additional jobs in the broader economy.
These investments are being made in communities across the country. Many are the largest investments the states or counties have ever seen. But these investments and jobs are now in peril.
The Trump administration is making good on its promise to dismantle the EV market – no matter the costs to domestic manufacturing, American jobs and consumers’ pocketbooks. Some Republicans in Congress are trying to slash funding for EV and clean energy tax credits. EPA Administrator Lee Zeldin just announced the agency will take action to reconsider its clean vehicle standards. Efforts to freeze or delay federal grants are having a chilling effect on manufacturers and the workers who support them.
The risks to American manufacturing and jobs are real. Ford CEO Jim Farley noted recently that “We’ve already sunk capital … in battery production and assembly plants all through Ohio, Michigan, Kentucky and Tennessee. And many of those jobs will be at risk if the IRA is repealed.”
Ford’s battery plants in Tennessee, Kentucky and Michigan alone, if completed, will provide an estimated 12,700 jobs through nearly $14 billion in investment. All of the EV investments around the country are supporting expansion and economic development in the communities where the facilities are located – growing the local fire department, creating new training programs at community colleges, increasing state and municipal tax bases, supporting small local businesses, and more.
A recent analysis from Princeton University’s Zero Lab found that if the Trump Administration is successful in their anti-EV agenda, between 75% and 100% of all battery plants planned or under construction in the U.S. could be at risk of cancellation and closure. Businesses depend on certainty to plan. So even though the tax credits remain in place today, the threat of their withdrawal is already causing manufacturing cancelations and scale backs in investments.
In February, KORE Power canceled plans to build a $1.25 billion lithium-ion battery plant in Buckeye, Arizona. The facility would have employed 700 construction workers and provided an estimated 3,000 permanent jobs. The two-million-square-foot manufacturing site would have been “a return of good paying jobs that … support American families,” according to Buckeye Valley Chamber of Commerce President Deanna Kupcik.
Freyr Battery recently canceled plans to construct a $2.6-billion battery manufacturing facility in Coweta County, Georgia. The Giga America plant, which would have been located near Atlanta, would have created more than 700 jobs that are now lost.
At least four other manufacturing facilities have been called off and many more are seriously threatened. For example, in February 2023, the U.S. Department of Energy announced a two billion dollar conditional loan commitment to Redwood Materials to construct and expand a battery materials campus in McCarran, Nevada. Redwood Materials’ facility is expected to create approximately 3,400 good-paying construction jobs and employ approximately 1,600 full-time employees, including labor, technical staff, and on-site management. The project is now threatened as the conditional loan commitment could be revoked as part of the Trump administration’s attacks on federal climate and clean energy spending.
A new report by Climate Power found more than 42,000 clean energy jobs have already been lost or stalled since President Trump came into office. Even more could be at risk. EDF’s report found more than 100,000 jobs associated with EV and battery manufacturing facilities that are currently under construction. Changes to the economic environment that brought those investments to communities may mean those jobs are never realized.
Of course, not all Republicans in Congress want to gut the federal tax incentives that have helped these domestic manufacturing investments and their related jobs be possible. Twenty-one House Republicans recently signed a letter asking that changes to the energy tax credits be limited. We can only hope federal policy makers listen before it’s too late.
If we want the U.S. auto industry to compete in the global market, we need to support the growth of domestic EV manufacturing. Otherwise, we will only cede more ground to other countries and damage the global competitiveness of our domestic auto companies. EVs are a growing market here in the U.S. and abroad, accounting for nearly one in five vehicles sold globally last year. We stand at a crossroads where one path leads us to a domestic manufacturing renaissance and the other to wasted opportunity.