Republicans in Washington are pushing for at least two big changes to the country’s car-related policies. In Congress, some lawmakers want to repeal the $7,500 tax credit that helps consumers buy or lease a new electric vehicle — as well as a matching tax credit that lets companies buy heavy-duty zero-carbon trucks. And at the Environmental Protection Agency, officials are trying to roll back Biden-era rules encouraging dealerships to sell more EVs through 2032.
What will that mean for the climate — and for the slate of new EV and battery factories popping up around the country? On this week’s episode of Shift Key, Rob and Jesse talk about new research from Jesse’s lab, the REPEAT Project, about what will happen if Congress and the Trump administration get their way. What will happen to America’s factory boom? How soon would the effects be felt? And would tariffs stem the bleeding at all? Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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Here is an excerpt from our conversation:
Jesse Jenkins: What surprised me, I think, is that even some of the existing capacity that is already operating now, or in the case of battery cells, this huge amount of additional capacity that’s going to be coming online this year, in 2025, could also be unnecessary. And so we found just if you take the cells, for example, that even if the U.S. were to maintain the same market share as it has today — which is about 70%, which is higher than the typical share of content in the auto sector as a whole …
Robinson Meyer: The EV supply chain is more U.S.-based than the general internal combustion vehicle supply chain. Like, a greater share of EVs are produced in the U.S. than a share of overall vehicles.
Jenkins: Yeah, I think it’s about a 70% share for EVs and only about a 50% share for —
Meyer: How much of that is Tesla, right?
Jenkins: Well, yeah, half of the 70% is Tesla. So even if we just maintain that same 70% share and just see the effect of the contraction in the market, we would have more capacity for battery cell assembly online by the end of this year than we would need.
Meyer: Yeah, wow.
Jenkins: And that’s assuming no decline in U.S. share if we lose the 30D requirements to source these batteries from North America. And so, if you assume instead that we only produce the same amount as we currently do, so we don’t see any new investment …
Meyer: That there’s no offshoring.
Jenkins: Then we don’t even need the factories that are opening this year. We have enough capacity already online, 130 gigawatt hours a year. We would only need about 120 in that low-end scenario. So even existing plants could be at risk. And the same is true for the assembly of vehicles. Up to half of the currently operating vehicle assembly capacity for EVs and plug-in hybrids in the U.S. could also be at risk. Those plants would either be idled or even potentially closed in that market contraction scenario, where both effects hit the EV assembly, the decline of 40% in sales and a contraction in U.S. market share.
Meyer: So in other words, the quickest way to close U.S. car factories is to repeal the tax credits in the IRA and the EPA regulations on greenhouse gas pollution.
Jenkins: I hesitate to say the quickest, I’m sure there are other terrible things. But yes.
Music for Shift Key is by Adam Kromelow.
