The story of the last few years of the U.S. economy has been that of a manufacturing boon, particularly in the electric vehicle and battery sectors. Since 2020, there have been nearly $200 billion in EV and battery investments announced in the U.S. EV supply chain, generating almost 200,000 new jobs. We’ve seen the fruits of these investments across the country from places like Charleston, South Carolina, to Kokomo, Indiana, to Reno, Nevada.

While the growth of alternative drivetrains in the U.S. is undeniable—rising from 2% in 2015 to over 19% last year—the status of these new critical mineral and material, EV and battery investments is not. Tens of thousands of jobs and the manufacturing boom that may come from these private sector investments are at great risk if the House-passed reconciliation bill, which would remove critical tax credits, passes the Senate and is ultimately signed into law. This fear is becoming a reality, with $14 billion in clean energy projects having already been cancelled this year due to policy uncertainty. 

For example, recent news from South Carolina illustrates this point. AESC, an EV battery producer in Florence County, halted construction on a $1.6 billion facility, citing ‘policy and market uncertainty’ as the reasoning for the pause. The move threatens the 1,600 jobs the company had planned for the facility, as well as hundreds of construction jobs due to the work stoppage. Governor Henry McMaster (R-SC) echoed that sentiment, stating in a recent interview: “There is a lot of uncertainty in the reconciliation bill, whether (those) tax credits will still be in there or incentives. Of course, with the tariffs, the tariffs are going up and down. Some of those [projects] are being paused."

The facility in South Carolina isn’t an anomaly. While policy uncertainty around the future of mineral production, EV, and battery tax credits is one factor companies are considering, the increase in tariffs has also played a role in making projects less economically viable. Battery manufacturer Freyr cancelled plans for a $2.6 billion factory in Coweta County, Georgia earlier this year. Meanwhile, battery startup OneD Battery Sciences shut down a pilot plant in Washington State, citing the impact of tariffs. Automakers have watched these develop closely too, with some like Honda delaying plans for new EV manufacturing sites. While we’ve noted that the Trump Administration and automotive industry share a goal of onshoring manufacturing in the U.S., the current policy mix of the House reconciliation bill text and rising tariffs may lead to further delays or cancellations of projects, which could threaten the economic development and job growth in these communities.

The current language in the House reconciliation bill amounts to a nearly full repeal of vital manufacturing credits, such as the 45X Advanced Manufacturing Production Tax Credit, that have led to this U.S. battery boom. As currently drafted, these credits may exist on paper alone. This would remove a strong incentive that has effectively resulted in new battery facilities, job creation, and economic growth across the country. 

Many research organizations have been hard at work quantifying the potential impact of the repeal of these credits, including their impact on local economies - where these job losses will fall especially hard on certain states. 

‍According to the International Council on Transportation (ICCT), 130,000 jobs that are directly linked to the auto industry are projected to be lost by 2030 if these credits are repealed. Nearly three times as many indirect jobs, about 310,000, would also be lost as a result of the loss of these tax credits. ICCT’s report breaks down the job impact at the state level, with Michigan, Tennessee, Nevada, Kentucky, Ohio, Indiana, and North Carolina among the states with the greatest potential losses.

Other research reports back up ICCT’s assertions that repealing the tax credits would harm U.S. domestic manufacturing. Princeton’s REPEAT project finds that without these policies, between 29% and 72% of battery cell manufacturing online by the end of 2025 would be at risk of closure – in addition to 100% of all other planned facilities starting production after this year. 

A new report just released by the Rhodium Group backs Princeton’s findings. Rhodium Group importantly notes that: 

“... under the House-passed bill, there's little reason for a U.S. energy developer to choose American-made components. Eliminating the 45X tax credits would raise the costs of U.S.-manufactured clean technologies, making them more expensive than foreign (often cheaper) imports, and undermining the competitiveness of U.S. production.” 

In total, the report finds that up to $522 billion in clean energy investments could be at risk - with 62% of that investment falling for just the 10 states with outstanding investments, including Texas, Indiana, Arizona, Nevada, and Georgia. 

Left unquantified by these reports is the full extent of potential damage to the U.S. mining industry and midstream portion of the battery supply chain that will see less demand in the years ahead without these tax credits. Starting up new mining or refining projects is already a major technical and, often, financial challenge in the United States - even with key incentives and targeted tariffs on the table. 

Stepping back from the data, it is important to remember that each of these potential job sources may be a lifeline to a local economy, a bigger paycheck for a family, and a boost to the community around each facility. Already the EV industry has been changing the lives of thousands of Americans employed in this growing sector. New jobs in this burgeoning EV and battery sector will provide higher wages for workers, more tax revenues for schools and localities, and induce jobs in other sectors like hospitality and restaurants to support them. But all of this research highlights the high-stakes: if these key tax credits are rolled back, there is a high likelihood that billions of dollars in investment and their accompanying job opportunities will not materialize.

The EV transition will continue advancing on a global scale, despite the uncertainty of the present. But if these credits are repealed, new EV and battery jobs may come in places like Seoul and Beijing instead of Liberty and Lordstown. 

Congress doesn’t just hold in their hands the future competitiveness of the U.S. auto industry, but tens of thousands of good-paying jobs and the economic opportunity for Americans across the country. We urge Congress to thoughtfully engage with the companies and workers leading this industry as they continue their work on this landmark reconciliation bill.