Potential Impacts of Electric Vehicle Tax Credit Repeal on US Vehicle Market & Manufacturing

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Final Up to date on: 18th March 2025, 03:19 am

The re-election of President Donald J. Trump has created appreciable uncertainty concerning the way forward for the U.S. automotive business and the nation’s transition to electrified autos. By way of govt orders, President Trump has indicated intentions to remove federal rules geared toward lowering greenhouse fuel emissions from automobiles and vehicles, repeal subsidies supporting electrical car (EV) purchases, and halt or redirect federal grant applications designed to develop EV charging infrastructure.

To facilitate evaluation of the broader financial impacts of those potential modifications to federal power and local weather insurance policies, the REPEAT Mission has developed up to date situations assessing how these insurance policies may affect the U.S. car market, in addition to their implications for home battery and EV manufacturing.

Abstract

If EPA tailpipe emissions rules and federal clear car tax credit are repealed:

• Gross sales of battery electrical autos might drop about 30% in 2027 and 40% in 2030 relative to a situation the place present insurance policies are continued.
• The share of battery electrical autos in new gentle car gross sales might drop from about 18% to 13% in 2026 and 40% to 24% in 2030.
• Cumulatively, 8.3 million much less EVs and plug-in hybrids could possibly be on U.S. roads in 2030.
• As a lot as 100% of deliberate development and enlargement of U.S. electrical car meeting and half of current meeting capability could possibly be liable to cancellation or closure.
• Between 29% and 72% of battery cell manufacturing capability at present working or on-line by the top of 2025 would even be pointless to satisfy automotive demand and could possibly be liable to closure, along with 100% of different deliberate services.
• There could be additional (unquantified) impacts on U.S. supplies, elements, and part suppliers upstream of EV and battery meeting.

Full PDF here.

Information from Princeton University ZERO Lab. Mission chief: Jesse Jenkins.

Jenkins, J. (2025). Potential Impacts of Electrical Automobile Tax Credit score Repeal on US Automobile Market and Manufacturing. REPEAT Mission. https://doi.org/10.5281/zenodo.15001499