The recent passing of the One Big Beautiful Bill in the Republican-led House of Representatives has sent shockwaves through the electric vehicle sector. This legislation, if approved by the Senate, could have detrimental effects on the flourishing battery industry in the United States.
The bill, aimed at funding tax cuts and increasing spending on defense and immigration enforcement, includes provisions that would eliminate key tax credits for electric vehicles (EVs) and place restrictions on domestic battery production. These changes are projected to reduce annual EV sales by 40% in 2030 and put an end to America’s battery manufacturing boom.
Furthermore, the bill would revoke the Inflation Reduction Act, a vital climate law that has been driving American manufacturing growth since 2022. This would result in the elimination of rebates for North American-made EVs and impose additional taxes on EV owners, making plug-in cars more expensive.
The potential impact of these policy changes extends beyond EVs to the battery industry. A slowdown in EV demand would lead to decreased demand for batteries, affecting domestic battery production and supply chains. With China currently dominating the battery market, the loss of incentives for domestic battery production could further shift the balance of power in the industry.
The bill also includes complex rules that could hinder projects related to battery manufacturing and materials processing. The termination of tax credits for EV buyers and manufacturers could result in a significant reduction in planned U.S. battery capacity, leading to job losses in the EV sector.
Experts warn that if the bill becomes law, the U.S. may have excess battery capacity by 2030, rendering planned battery projects unnecessary. This could lead to the closure of existing battery factories and the loss of thousands of jobs in the industry.
Despite the potential consequences, only two Republicans opposed the bill in the House, with many states at risk of losing jobs in the EV and battery sectors. The bill now heads to the Senate, where further deliberations will determine the fate of the battery industry in the U.S.
In conclusion, the passage of the One Big Beautiful Bill could have far-reaching implications for the electric vehicle and battery industries in the United States. The future of the battery boom hangs in the balance as lawmakers consider the impact of these policy changes.