On Thursday, the Republican-led House of Representatives voted along party lines to pass what's been dubbed the One Big Beautiful Bill. If President Donald Trump’s signature budget and tax legislation makes it through the Senate as written, things will get very ugly for the country’s electric vehicle sector—including its flourishing battery industry.
Coupled with the Trump administration's cuts to other climate policies, the bill's destruction of pro-EV tax credits will "reduce annual sales of electric vehicles by roughly 40% in 2030 and end America's battery manufacturing boom," according to an analysis out Thursday from Princeton University's climate-focused REPEAT Project.
The bill pays for tax cuts and extra spending on defense and immigration enforcement by eviscerating the Inflation Reduction Act, the landmark climate law that had been funding an American manufacturing renaissance since 2022.
It would swiftly eliminate rebates for people who buy new North American-made EVs and place new restrictions on tax credits that subsidize domestic production of battery packs and cells. All of that, plus a $250 annual registration tax for EVs also included in the bill, will make plug-in cars costlier to buy and make.
Meanwhile, Trump’s agencies plan to roll back Biden-era tailpipe emission and fuel economy rules that would have forced automakers to rapidly clean up their fleets. And the Senate just moved to revoke California’s influential zero-emission vehicle mandate.
In other words, the nationwide carrots and sticks—incentives and penalties—that were pushing America full-steam ahead toward an EV future are dead or dying. And experts say the battery industry will get slammed on multiple fronts.
Importantly, any policy changes that dent EV sales will also diminish demand for batteries among car manufacturers. A slower-growing EV market simply won’t need nearly as many battery cells each year as a thriving one. As the EV sector grew, it was expected to drive up domestic battery production while bringing battery costs down. Currently, battery supply chains are overwhelmingly controlled by China.
Some at-risk policies support battery makers more directly. The 45X tax credit created by the IRA covers some of the cost of battery cells, modules and critical minerals produced in the U.S. New language in the bill would bar projects with even remote ties to China from receiving credits. One analysis called these rules "extremely complex" and "in many ways unworkable."
The tax credit for EV buyers, 30D, includes provisions that push manufacturers to onshore and friendshore battery production. The House voted to terminate the credit at the end of 2026, six years early.
According to the REPEAT Project, if the House bill becomes law and EV demand slows down, all planned U.S. battery capacity that is not up and running by the end of 2025 may not be necessary in 2030. In other words, even without any of the battery plants slated to open up from 2026 onward, the U.S. would likely have plenty of battery capacity to supply all domestically made EVs through the end of the decade.
Moreover, some battery factories that are currently operating or about to come online could be at risk of shutting down due to depressed EV demand, the researchers said.
And there are more than a few battery projects that are still in their early stages right now. Post-IRA, companies have announced 128 U.S. facilities for battery manufacturing, materials processing and the like, according to Wellesley College’s Big Green Machine database. Of those, 77 have not started construction or production.
Deep cuts to battery production would result in far fewer American manufacturing jobs over time. According to a recent report from the International Council on Clean Transportation, repealing the EV provisions in the IRA could slash U.S. battery production by roughly 75% in 2030, from the 1,050 gigawatt-hours currently planned to 250 GWh. The organization concluded that getting rid of the law would vaporize 130,000 potential jobs in the EV space by 2030, including 85,000 jobs in battery manufacturing alone.
The impact would be almost immediate. Thousands of battery industry jobs that exist today would disappear starting in 2026, the ICCT says, and employment in the sector would only climb back to 2024 levels in 2030.
If the House bill were to become law, the outcome would look a lot like the ICCT's no-IRA scenario, said Peter Slowik, the organization's U.S. passenger vehicles lead.
Some of the biggest losers will be red and purple states like Michigan, Texas, Tennessee, Nevada, Kentucky and Georgia, according to the ICCT. For that exact reason, many who watch this industry closely had believed that a motivated contingent of Republicans would fight to save some core parts of the IRA. That’s not what happened.
Just two Republicans joined all Democrats in voting against the bill, and that was because they didn’t think the cuts went deep enough. Georgia Rep. Buddy Carter, whose district is home to Hyundai’s enormous new EV, hybrid and battery plant, supported the bill and called it “fantastic.”
Nevada’s vast lithium deposits have made it a magnet for the battery industry. Rep. Mark Amodei (R-NV) previously told The Nevada Independent that he’d like to preserve the 45X and 30D tax credits. He voted to gut them instead.
The bill’s cuts go far beyond EVs and batteries. None of the 21 Republican House representatives who previously defended the IRA’s tax credits for clean energy voted against the bill either.
Now the big, destructive bill heads to the Senate, where lawmakers have set a July 4 deadline to send it to the president’s desk. The next few weeks and months of deliberations will determine whether the battery boom charges ahead—or grinds to a halt.
Contact the author: Tim.Levin@InsideEVs.com
