If the Trump Administration eliminates the federal EV tax credit, it could have a devastating effect on U.S. manufacturing, a brand new study warns.
Produced by the REPEAT Project, a Princeton University group that analyzes environmental policy, the study found that killing the $7,500 tax credit would reduce EV demand, in addition to endanger manufacturing jobs related to making those vehicles and the batteries that power them.
“The report can also be the one evaluation I’m aware of thus far that attracts the connection to U.S. manufacturing as well,” Jesse D. Jenkins, an assistant professor at Princeton and the study’s project leader, told Electrek in an emailed statement.
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Without the tax credit, researchers estimate that EV sales within the U.S. could decrease 30% by 2027 and nearly 40% by 2030. That may cut predicted EV market share from 18% to 13% in 2026 and from 40% to 24% in 2030, in line with the study.
Such a slowdown may lead to 100% of planned expansions of U.S. EV assembly plants being canceled, and will make 29% to 72% of U.S. battery-manufacturing capability redundant, in line with the study. Factories which might be idled—or never inbuilt the primary place—mean fewer jobs. And based on the distribution of current EV-related manufacturing projects, red states could possibly be hit the toughest.
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Analysts have viewed the tax credit as vital to continuing U.S. EV sales growth. It was among the many trends that led S&P Global Mobility, in 2023, to predict that U.S. EV sales could greater than double by 2030. However the Trump Administration is predicted to focus on the credit, just because it’s targeted other Biden Administration policies related to charging infrastructure and emissions standards.
The potential lack of the tax credit, and other Trump policies, led J.D. Power to revise its EV market share retail forecast to be flat this yr, at 9.1% of the U.S. retail market, but with resumed growth after this yr to 26% of the market by 2030. Considering expected market growth amongst mass-market models outside EV-specific brands like Tesla, Rivian, and Lucid, that might still result in 3% sales growth.
This Article First Appeared At www.greencarreports.com
