Will Congress Halt America’s Battery Boom? What You Need to Know!

On Thursday, the Republican-controlled House passed a bill known as the One Big Beautiful Bill. If it clears the Senate, the U.S. electric vehicle (EV) market could face serious setbacks, especially in battery production.

According to a recent analysis from Princeton University’s REPEAT Project, this legislation could slash electric vehicle sales by about 40% by 2030. It also threatens to end the growing U.S. battery manufacturing industry. This bill effectively dismantles incentives established by the Inflation Reduction Act (IRA), which had been boosting domestic green manufacturing since 2022.

The proposed law would eliminate rebates for buyers of North American-made EVs and impose new restrictions on tax credits for domestic battery production, making them more expensive. Additionally, it proposes a $250 annual registration fee for electric vehicles, further discouraging their purchase.

The Trump administration’s agencies are also planning to roll back regulations on tailpipe emissions and fuel economy. In parallel, the Senate is looking to revoke California’s significant zero-emission vehicle mandate.

Essentially, the push towards a future dominated by EVs is faltering. Experts warn that if EV sales drop, the demand for batteries will shrink as well. A slower EV market will mean fewer battery cells are needed, which could halt domestic battery production, a sector currently heavily reliant on China.

The bill also targets specific tax incentives that have helped the battery industry thrive. The IRA includes a 45X tax credit that supports battery production in the U.S. However, new provisions would prevent any project with ties to China from receiving these credits, complicating matters for manufacturers.

The effects of these changes could be drastic. According to the REPEAT Project, without robust EV sales, even the battery capacity planned for development may be excessive by 2030. Some existing plants could even shut down due to decreased demand.

Recent statistics from the Big Green Machine database reveal that post-IRA, 128 battery manufacturing facilities have been announced in the U.S., but 77 of these projects remain unstarted. This slowdown could result in the loss of thousands of jobs in the U.S. battery industry. A report from the International Council on Clean Transportation warns that repealing IRA provisions could lead to a 75% drop in planned U.S. battery production by 2030, jeopardizing around 130,000 jobs.

The impact would likely be felt quickly. Jobs in the battery sector could start to vanish as soon as 2026, hindering recovery until at least 2030. States like Michigan, Texas, and Georgia, which are heavily invested in EV manufacturing, stand to lose significant employment opportunities.

Curiously, while two Republicans voted against the bill, most supported it, even those from areas with booming EV industries. Rep. Mark Amodei from Nevada, an area rich in lithium resources, had previously emphasized the need to preserve tax credits but voted to eliminate them instead.

As the bill heads to the Senate, it remains uncertain whether it will pass. This legislation could either catalyze a new era for electric vehicles or stifle progress in a sector that has rapidly evolved over the past few years.

For further information on the economic impacts of battery manufacturing and electric vehicles, you can check the International Council on Clean Transportation’s recent reports here.

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