House Republicans with electric vehicle manufacturing or battery production in their states still welcome President-elect Donald Trump’s plan to nix a $7,500 tax credit for buying EVs.
The tax credit, which was ushered in under President Biden’s Inflation Reduction Act, will be in jeopardy when Mr. Trump takes office in January. Throughout his campaign, Mr. Trump pledged to dismantle the IRA, and he repeatedly promised to end Mr. Biden’s “EV mandate.”
His transition team has its eyes on jettisoning the $7,500 EV tax credit. Getting rid of the tax credit, however, would likely require an act from Congress, and it could be embroiled in next year’s debate over taxes.
The EV tax credits have helped boost sales in the EV industry, with the total year-to-date sales reaching 1 million units in October, according to a report from Cox Automotive, with incentives accounting for 13.7% of the average transaction price for a vehicle.
The U.S. auto industry has dumped billions into bolstering EV manufacturing in the country, particularly in the Southeast, where 31% of the 231,000 EV manufacturing jobs expected in the U.S. can be found, according to a report published in October by Atlas Public Policy.
Georgia and Tennessee lead the way in expected EV manufacturing jobs and are in the top three for investment. Lawmakers from the region told The Washington Times that they would not oppose ending the tax credit.
“I don’t think the government should be putting its hand on the scale and picking winners and losers,” said Rep. Andrew S. Clyde, Georgia Republican. “I don’t think there should be a tax credit like that of any sort. That’s irresponsible, in my opinion, for the government to have done that to begin with.”
Rep. Andy Ogles, Tennessee Republican, told The Times that he was not concerned that nixing the tax credit could lead to job loss in his state.
“You know, when you look at the industry that’s cropped up, they’re core to distribution, manufacturing and distribution, so they’ll be good,” he said. “But at the end of the day, let the market decide what technology, or what products, it wants.”
The Alliance for Automotive Innovation, the auto industry’s top lobbying group, disagreed. It urged Mr. Trump to consider preserving tax incentives and subsidies that were enacted in his first term and under Mr. Biden, including the $7,500 EV tax credit.
The group, which represents the Big Three automakers Ford, General Motors and Stellantis, argued that the policies from the Tax Cuts and Jobs Act of 2017 and the IRA complimented one another and kept the U.S. automotive industry competitive against a heavily subsidized Chinese market that has zeroed in on EV manufacturing and exports.
“These incentives have fueled economic investment in domestic EV manufacturing and increased good-paying jobs in automotive communities across the industrial base,” the group wrote in a letter to Mr. Trump. “The incentives help ensure that the U.S. continues to lead in manufacturing critical to our national and economic security.”
One voice that could play a role in influencing Mr. Trump on the issue is Elon Musk, the CEO of Tesla, who has emerged as a close adviser to the president-elect.
Tesla stands above other auto manufacturers getting in on EVs, largely because the company is the only one in the U.S. to turn a profit on EVs.
“Take away the subsidies, it will only help Tesla,” Mr. Musk said on X earlier this year.
• Alex Miller can be reached at amiller@washingtontimes.com.
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