For a minute, it seemed like Donald Trump would get a lot of what he wanted before he even set foot in the White House.
In the president's dream for America, the country has wrested manufacturing jobs away from Zhengzhou and Shenzhen and sent them to Ohio and Pennsylvania. Here, sprawling networks of factories make everything from car parts to iPhones. And it doesn’t depend on any other nation for its energy needs.
But a high-tech manufacturing boom was in the works well before Trump came to office. There was only one problem: some parts of that plan rode on the back of electric vehicles. Despite once hyping up Teslas on the White House lawn with the same enthusiasm he might’ve once had for a new line of branded steaks, Trump’s assault on EVs has been total and relentless.
At his behest, the GOP-controlled Congress has now passed the "Big, Beautiful Bill" that guts the environmentally-focused provisions of the Inflation Reduction Act (IRA), including tax credits for EV purchases. Those tax credits, which helped move a record 1.3 million EV sales in 2024, will come to an end on Sept. 30. (The bill will also dramatically reduce wind and solar energy deployments in the coming years.)
Now, auto industry executives and climate experts are ringing similar alarm bells for America: fewer EVs made and sold here, increased greenhouse gas emissions, and watching as the rest of the world transitions to more hybrid and electric cars without us.
Yet what gets lost in this White House’s oil-and-gas lovefest is that kneecapping the IRA’s pro-EV policies will have ripple effects that go far beyond just cars. The reason is batteries.
Electric cars are basically just giant batteries on wheels, so car companies have spent the past few years trying to open battery plants in the U.S. at a feverish pace. But EV batteries are not dissimilar to what’s inside laptops, smartphones, electric razors, and so many other gadgets.
The problem is that America isn’t very good at making batteries. This was supposed to change as the IRA promoted domestic EV and battery manufacturing: after all, in order to get the full $7,500 tax credit at purchase, EVs had to be made in North America, as did a minimum percentage of the critical minerals and other components within their batteries.
But if the battery boom goes bust, it could be bad news for Trump’s agenda on multiple fronts. That includes losing tens of thousands of manufacturing jobs, sacrificing a shot at greater energy independence, and continuing to depend on China for so much of America’s battery needs.
Changing the fact that the U.S. now ranks a dismal fourth overall in global battery production was supposed to be a huge boon to domestic manufacturing employment. The opposite has happened since Trump returned to office. According to a recent report from the nonpartisan Zero Emission Transportation Association, more than $14 billion in clean energy projects were canceled this year due to “policy uncertainty.” Those include halting construction on a battery plant in South Carolina; the closure of two plants in Michigan; and a scuttled plan for a battery component plant in Georgia.
Incidentally, most of the states where battery plants were once planned, but are now seeing cuts, went for Trump last November. Yet the effects will be seen everywhere.
A recent report from Princeton University's climate-focused Repeat Project didn't mince words: if the Big, Beautiful Bill is signed into law with a “full repeal of current federal energy and climate policies,” it will “end America’s battery manufacturing boom.” And even GOP members of Congress who stand to lose jobs in their districts decided to stand with Trump over saving the IRA.
Doing so will ensure America keeps doing something it’s gotten very good at: buying batteries from China.
The lithium-ion battery was born here. But outsourcing them, and all kinds of other consumer goods, has led China to become less of the world’s on-demand contract factory and more of a giant science lab that’s run away with this technology. And it's not just batteries themselves but the entire supply chain of materials to make them; as the Financial Times reported in April, the U.S. relies on China for 70% of the rare earth compounds and metals it imports, and then companies like Apple and others source directly from there.
Besides the risks of getting a key piece of consumer tech from only one place—a lesson Americans learned the hard way during the semiconductor shortage of the pandemic—there’s the obvious problem of leaving the power source of the future in the hands of a country with which the U.S. has difficult relations on a good day. (Not many people in America would seriously suggest that this country import all of its petroleum from Venezuela, Iran, and Russia.)
While China critics are quick to blame the immense government subsidies for the country’s lead in electric vehicles, decades of making gadgets for the rest of the world have given it a significant edge as well. It’s no wonder that China’s BYD, which recently out-sold Tesla in Europe, started out as a phone battery manufacturer—and by that token, nobody should be surprised that smartphone giants like Xiaomi and Huawei are suddenly turning out groundbreaking EVs too.
Making more electric cars in America, and batteries for them here too, was supposed to help reverse this tide. EVs drive much more volume and scale for batteries than other kinds of devices. Specifically, they were meant to drive America’s ability to build batteries at home. The size of battery packs that are going into EVs is so substantial that, in aggregate, they would've ended up the lion's share of the market here—driving an entire ecosystem along the way.
And this is where some of Trump’s own economic goals clash with his anti-EV policies. In the second Trump era, American carmakers are still free to make EVs and their batteries. Yet removing tax incentives for the cars they power will slow down the buildout of these factories, thus slowing down many once-promising battery advancements.
If the battery boom goes bust, it won’t just have an impact on what you drive. Trump has promised cheaper energy bills without having to rely on importing any oil or gas. But that’s where battery energy storage—not to mention the wind and solar energy about to be gutted here—would be crucial.
Take one stretch of desert in California full of trailers stuffed with repurposed EV batteries. They store up solar energy and provide clean energy to the grid during peak hours. Or Tesla’s Powerwall, a kind of home generator that’s basically a giant car battery charged by solar panels—and made in the same Gigafactory as Tesla’s car batteries.
The idea is that if America has enough electricity stored up in batteries, and charged by renewable sources, it can have cheaper power and be less dependent on fossil fuels. Case in point: in Texas, the heartland of oil and gas in America, huge battery storage units have helped to keep energy bills down—something the state’s leaders somehow have an issue with.
Some of this may be why the bill ended up keeping elements of the tax credit in place for battery storage projects. Another may be a pet cause that Trump is adamant about: artificial intelligence. Battery storage is seen by energy experts and many others in this space—including the president’s supposed new friends in Big Tech—as key to AI data centers with voracious energy demands.
"In the U.S., power consumption by data centres is on course to account for almost half of the growth in electricity demand between now and 2030," the International Energy Agency said in April. More guidance is expected from the government soon as to how battery manufacturing itself will be impacted here, but no one thinks fewer EVs sold will be good for that industry's growth.
Granted, the EV and battery race will continue in America, albeit at a slower pace. Nearly every automaker that sells cars here is a global one, or hopes to be. They have strict emissions regulations to meet all over the world, and even a full-force effort by this country seems unlikely to reverse the global decline of purely internal-combustion vehicles. General Motors and Ford, for example, are racing to scale up lithium manganese-rich (LMR) batteries for future EVs that will use a supply chain far less dependent on China. Any company that can see the way things are going will make similar long-term investments.
They'll all just be doing it with a lot less help from now on. Because when faced with the choice between a 21st-century country's energy needs and the “drill, baby, drill” mantra that sounds great to their base—and their donors—Trump and his allies in Congress chose the latter.
Contact the author: patrick.george@insideevs.com
