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Otago Daily Times
06-06-2025
- Automotive
- Otago Daily Times
Bill could create global ‘ripple effect'
EV advocates warn of Chinese dominance as a result of cuts to credits in the United States, writes Grant Schwab. The cuts to Biden-era tax credits in the budget passed by the Republican-controlled US House of Representatives could stunt the growth of the nation's still-fledgling electric vehicle industry and create ripple effects throughout the global vehicle market, clean energy advocates warn. "Anybody who claims to be concerned about Chinese dominance in battery minerals and supportive of US competitiveness in that sector needs to know: This bill is absolutely devastating to that goal," Zero Emission Transportation Association executive director Albert Gore said. The credits are meant to stoke both the domestic supply of critical minerals and advanced battery technologies and the demand for products that use those materials, namely next-gen, zero-emission vehicles. Environment-minded conservatives argue that broader tax breaks — which would be less targeted towards EVs and critical minerals — and regulatory rollbacks are instead best for growing those industries, and that Democrats are wrong to catastrophise over the changes. But with significant policy whiplash looming, advocates said multibillion-dollar investments in key sectors could shrivel thanks to the harsh realities of competing with the United States' chief economic rival. They also predicted political consequences for Republicans if the Senate follows suit and President Donald Trump, who has been critical of non-Tesla electric vehicles, signs a rollback into law. "The plan passed by House leadership will make it harder to produce the energy America needs, while simultaneously putting hundreds of projects, thousands of jobs and billions in investments at risk — mostly in Republican states that elected them," Bob Keefe, executive director of E2, a nonpartisan business group focused on energy and the environment, said in a statement. Even with those risks, House Republicans voted to pull back on EV-related credits in their tax and spending mega bill that passed along party lines on May 22 after all-night negotiations. The final version of the package seeks to eliminate four tax credits for EVs by the end of 2025 and modify another on manufacturing that industry leaders have said is crucial to building domestic battery prowess. The EV credits include offering $7500 on the purchase of qualifying new light-duty models, $4000 for used models, providing up to $40,000 for commercial vehicles and giving $1000 to individuals to install EV chargers. A manufacturing credit targets battery producers and upstream industries. Battery cells are each eligible for a credit of $35 per kilowatt-hour of energy they can store. Critical mineral miners, processors, purifiers and recyclers can claim a credit equal to 10% of their production costs. The bill proposes phasing out that credit a year earlier than initially planned and adding new requirements against the use of materials from certain foreign nations. "The production credit is critical for our industry, and it will be a significant impact for our industry if it goes away," Ford chief executive Jim Farley said at the Detroit Auto Show in January. "Many of our plants in the Midwest that have converted to EVs depend on the production credit". — TNS
Yahoo
03-04-2025
- Automotive
- Yahoo
ZETA warns of economic risk of tariffs on EV supply chain
This story was originally published on Automotive Dive. To receive daily news and insights, subscribe to our free daily Automotive Dive newsletter. The Zero Emission Transportation Association, a trade group supporting electric vehicle adoption and the buildout of a robust EV supply chain in the U.S., on Wednesday warned U.S. tariffs could negatively impact the electric vehicle industry and lead to the loss of jobs. In a statement following President Donald Trump's announcement of additional global tariffs, ZETA said taxing imports from long-standing U.S. trade partners, some of which have committed billions of dollars of investments in U.S. factories to produce EV batteries, can derail manufacturing projects that are creating jobs and bringing new economic opportunities to regions of the country. The statement also came hours before a new 25% U.S. tariff on imported passenger vehicles took effect. 'The EV and battery sector is working hard to ensure that the American auto industry continues to be an engine of economic growth for generations to come, " Albert Gore, ZETA's executive director, said in the statement. 'From building new manufacturing capacity to securing supply chains for components and hardrock minerals needed for modern technologies, including electric vehicles and battery supplies, our industry is competing to win.' ZETA members include Tesla, Rivian, Mercedes-Benz, Waymo and Panasonic. Although the trade group expressed concern about the fallout from steep tariffs, the industry association supports President Trump's March 20 executive order directing executive department and agency heads overseeing the permitting process for domestic mineral production to speed up the approval of new mining projects. The intent of the order is to boost domestic production of critical materials used in EV batteries and other applications. 'Hardrock mineral development—from extraction through processing and refining—is truly the bedrock of our modern economy,' Rebecca Konolige, ZETA's director of federal affairs, said in a separate statement on March 24. 'Commodities like copper, graphite, lithium, and cobalt are essential to countless advanced technologies, from missile systems to consumer electronics to electric vehicles.' ZETA said it's ready to work with the Trump administration to support what it calls 'productive trade policies' for growing the U.S. manufacturing sector, and many experts agree that imposing steep tariffs is not a viable solution. "With U.S. auto manufacturers heavily reliant on Mexico, Canada, and China for both production and spare parts, shifting tariff policies create ongoing uncertainty. The key to navigating these challenges isn't just reacting—it's building agility into supply chain operations,' said Stephen Gannon, VP of products of TrueAuto at TrueCommerce, in an emailed statement. Trump's auto industry tariffs come as companies pour billions into electric vehicle and battery manufacturing in the U.S., including a recently announced $21 billion commitment by Hyundai Motor Group to expand EV production at plants in Georgia and Alabama. As part of its massive investment, Hyundai plans to build a $5.8 billion steel plant in Louisiana that will supply steel to the two EV factories. Recommended Reading Trump installs 10% baseline tariff, country-specific duties Sign in to access your portfolio
The Independent
03-04-2025
- Business
- The Independent
Trump's tariffs cannot stop clean energy revolution – but they will hurt American businesses
President Donald Trump 's sweeping new tariffs have rattled global markets and sparked fears of trade wars that could affect everything from consumer prices to climate goals. As economists warn of inflation and industry leaders brace for higher costs, there are fears that the ripple effects could show in sectors like clean energy, where supply chains depend heavily on global trade. The new Trump policy imposes a universal 10 per cent tariff on almost all imported goods, with higher 'reciprocal' rates targeting some of the biggest trading partners of the US. China faces a 34 per cent rate, South Korea 25 per cent, Japan 24 per cent, and India 26 per cent. These countries happen to be the world's leading exporters of solar panels, batteries, wind components, and electric vehicles. In the US, business leaders and economists warn that these tariffs will fuel inflation and raise prices on everything from food and toys to wine and solar panels. Former vice president Mike Pence called the tariffs "the largest peacetime tax hike in US history", estimating that the new measures could cost American families over $3,500 a year. Tariffs imposed during Mr Trump's first term were largely passed on to consumers and analysts said they were expecting a similar outcome this time. "Trump's tariffs won't slow the transition to renewables, they'll only hurt ordinary people, particularly Americans," Andreas Sieber, associate director of policy and campaigns at told The Independent. "His record tells a different story than his claims: tariffs are tanking US stocks and fueling inflation." The renewable energy sector is already facing headwinds in the US, with developers lately reporting shortages of critical equipment like transformers, switchgear and circuit breakers. The new tariffs are expected to worsen the shortages and push up the costs of infrastructure such as wind turbine towers and transmission lines, many of which rely on imported steel and components. Albert Gore, executive director of the Zero Emission Transportation Association, told the Associated Press that the tariffs introduce "uncertainty and risk into an industry that is creating jobs and bringing new economic opportunities across the country." The cost pressures come at a time when US power demand is climbing, driven by electrification and data centre growth. While US industries may struggle to absorb the shock, the global clean energy transition is expected to continue largely unaffected. That's because the US is no longer central to the international clean tech trade. China, which dominates the manufacturing of solar, wind and EV components, sends only 4 per cent of its clean tech exports to the US, down from much higher levels a decade ago. "The global clean energy landscape has undergone a seismic shift," Sieber told The Independent. "A decade ago, developed economies dominated solar and wind installations. Today, the US is just 7 per cent of the global solar market. In this global surge, the US is increasingly a footnote." On the other hand, emerging and developing economies are expected to account for 70 per cent of solar PV deployment, 60 per cent of wind, and 60 per cent of battery storage by 2030, according to the International Energy Agency. Many countries have already adjusted their supply chains to minimise exposure to US policy volatility. India, for instance, may see short-term benefit from the tariff differential with other Asian peers. "There are multiple layers of impacts that need to be factored, domestic markets, export effect, and currency effect. India is currently still better positioned compared to Asian peers. While short term, there may be some impact on the GDP and local currency, in the long term, we expect businesses to adapt and continue innovating to build further resilience,' Nakul Zaveri, partner and co-head of Climate Investment Strategy at LeapFrog Investments, said. 'The country's energy demand will be at an all-time high and we see that as an opportunity for further accelerating the adoption of domestic non-fossil energy sources within the energy mix. Overall we see India continue to be a bright spot among EMs and present policy stability in a volatile environment." Some analysts warned that Mr Trump's tariffs could have secondary effects in developing economies. 'The US is pressuring India to raise tariffs on Chinese green tech as part of ongoing trade negotiations,' Alicia García-Herrero, chief economist for Asia-Pacific at Natixis, said. 'If that happens, it could make clean energy imports more expensive for India.' Although global supply chains are unlikely to be fundamentally disrupted, there is a potential for ripple effects if countries retaliate or if prices of certain goods rise due to a reshuffling of demand. But most analysts agree that the transition is well underway, and no single country can hold it back. Mr Trump has framed the tariffs as an act of economic self-defence, arguing that for decades, allies and rivals alike have taken advantage of the US. But critics across the political spectrum have voiced concerns that the move will isolate their country and undermine its economic and climate ambitions. "Trump likes to say he gets economic policy, but his record during his first term and the first weeks of his second term speak a very different language," Mr Sieber said. "He cannot stop the energy transition, he will mostly harm ordinary people in the US having to pay higher prices."
