President Donald Trump’s plan to ax electric vehicle tax credits could save more than $168 billion over a decade — but snuff out a job-creating factory boom underway in Republican states.
The credits, which include a $7,500 discount to EV buyers, have emerged as a favorite target of Republicans looking for ways to pay for tax cuts Trump has promised. But a pair of new studies sheds light on how rescinding the credits could hurt the constituents of the very legislators seeking their reversal.
If Congress rolls back both EV tax credits and pollution regulations, it could could slam the brakes on an emerging battery and EV manufacturing boom that is unfolding mostly in states that voted for Trump in last year’s election, according to a study released last week by Princeton University.
The reason is that the rollbacks could reduce demand for EVs later in the decade, meaning that factories planned for 2026 and later might not be necessary. Those already open, or opening later this year, could meet all demand for new vehicles through the end of the decade.
