U.S. Battery Production Set To Decline 75% Under Trump's ‘Big Bill'

Yahoo

28-05-2025

Last week, the U.S. House of Representatives narrowly passed what's been dubbed the 'big, beautiful bill', with the legislation designed to leverage deep cuts to the Inflation Reduction Act (IRA) credits to pay for tax cuts, immigration enforcement and extra spending on defense. The contentious bill is now headed for the Senate, where it faces its final test, with all Democrats but only a handful of GOP lawmakers critical of the huge increase it will bring to the national debt. According to a recent analysis by the International Council on Clean Transportation, the bill, coupled with cuts to other climate policies, could slash U.S. battery production by ~75% by 2030 to 250 GWh from the previously projected 1,050 gigawatt-hours, and EV sales by 40%.
According to the report, doing away with the IRA would eliminate 130,000 potential jobs in the EV sector by 2030, with the majority in battery manufacturing. Following the passing of the IRA in 2022, companies have announced a total of 128 U.S. facilities for battery manufacturing, with more than half yet to begin construction. Red and purple states including Texas, Michigan, Nevada, Tennessee, Kentucky and Georgia, would be the most adversely impacted if the bill were to become law. Under normal circumstances, this fact alone would be enough to galvanize GOP lawmakers in those states to oppose the bill; however, just two Republican House reps joined the Democrats in voting against the bill, portending a similar fate for the bill in the Senate. Interestingly, even Rep. Buddy Carter of Georgia, home to Hyundai's new $5.5B EV and battery manufacturing plant, threw his weight behind the bill, calling it 'fantastic.'
According to estimates by the experts, the project will create $4-5 billion in fresh investments in Bartow County as well as 3,500 new jobs. Over the past five years, EV-related projects in Georgia have created ~$17 billion in investments and more than 22,800 new jobs. Similarly, Rep. Mark Amodei (R-NV) did a 180 and supported the bill, having previously said that he will vote to preserve 45X and 30D tax credits. Overall, virtually all of the 21 GOP House representatives who previously defended clean energy tax credits under the IRA voted for the bill.
Source: CNBC
Meanwhile, the pivotal solar sector would face a massive setback under Trump's bill. According to a study by the Rhodium Group and Massachusetts Institute of Technology, the solar sector has recorded more than $160B in large solar and battery storage projects since the IRA was passed three years ago, marking one of the sector's most productive periods in recent times. Solar and battery storage have been the fastest-growing energy source in the U.S., with the pair expected to account for 81% of new power additions to the grid in the current year.
The tax bill would kill off two key tax credits that have been responsible for most of that growth. In effect, the bill would terminate both investment and production credits for renewable energy facilities that begin construction 60 days after it becomes law or those that enter service after 2028. Ben Smith, associate director at Rhodium Group, estimates that this could lead to up to a 72% decline in clean energy additions to the grid over the next decade. Further, clean energy projects will be ineligible to claim the tax credits if they source basic materials such as cobalt and lithium for batteries, as well as glass for solar panels, from prohibited foreign entities such as China. According to Guggenheim analyst Joseph Osha, the tax bill will be 'disastrous' for the rooftop solar industry because it will terminate tax credits for companies that lease solar equipment to customers. OSHA estimates that ~70% of the residential solar industry employs lease arrangements.
Among the bill's other key highlights are a proposal to cut the Environmental Protection Agency's budget to $4.2B from $9.1B, the EPA's smallest budget in nearly 40 years. The Union of Concerned Scientists has warned that shuttering the EPA's scientific arm would essentially turn the EPA into a purely political agency. If passed, the U.S. will record a large increase in greenhouse gas emissions by more than 1 billion metric tons annually over the next decade and U.S. household energy costs by ~$415 per household per year. The bill will also kill off the budding clean hydrogen, CO2 management, and even the nuclear power sectors.
By Alex Kimani for Oilprice.com
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