Automakers are lobbying against Washington lawmakers
General Motors Co. and Ford Motor Co. are among the carmakers and industry lobbying groups making pilgrimages to ask the Trump administration and Republican legislators to preserve some EV incentives in the Inflation Reduction Act passed under Joe Biden, according to people familiar with the effort who weren't authorized to speak publicly on the matter.
Among the options being floated if the Trump administration moves to strike EV incentives is a three-year wind-down to allow more time for the companies to adjust their businesses, these people said.
It's not immediately clear if Trump is receptive to the idea, or whether automakers can find enough votes among Republicans in Congress to keep EV incentives in place. But the industry is making the case that thousands of jobs now rely on electric vehicles, and that a disproportionate number of EV and battery plants are in Republican states such as Ohio, South Carolina, Georgia and Alabama, making what's now sometimes referred to as the U.S. "Battery Belt."
The effort shows how big auto companies are working to influence key policies beginning to take shape in Trump's Washington that could deal a blow to their operations and bottom lines. Automakers have spent billions of dollars to build EV and battery manufacturing plants in the U.S., helped by IRA subsidies that support production and consumer demand for plug-in cars. Trump has directed his administration to consider
Carmakers also are looking to avert or mitigate the effects of new potential tariffs that at least one industry leader has warned would be
To preserve EV subsidies, carmakers are also stressing that a multiyear phase-out period would give them time to drive battery and EV costs down so they can reduce prices and sell electric vehicles without help from the federal government, the people said. Federal support also helps give domestic automakers a chance to build an American-made supply chain to better compete with China.
"We have the potential repeal of various IRA elements," Ford Chief Executive Officer Jim Farley said Tuesday at an investor conference in New York. "We've already sunk capital. And many of those jobs will be at risk" if the IRA or large parts of it are repealed, he said.
Farley said he'll meet with members of Congress this week, which he said will be his second trip to Washington in three weeks.
Tax credits
The IRA contained a 10-year extension of both consumer tax credits for EV buyers and subsidies that go directly to manufacturers for building batteries in the U.S.
Many automakers are asking to preserve as much of the IRA incentives as they can. That includes the so-called leasing loophole, which allows leased EVs to qualify for the full $7,500 tax credit that would otherwise be ineligible if purchased outright.
GM CEO Mary Barra recently met with Trump to discuss tariffs and other administrative policies that affect the auto industry. The company has pushed to apply the same sourcing standards to incentives toward leasing EVs that are currently applied to purchases, so that battery materials and production would have to be in the U.S. or come from certain trading partners, one of the people said. If GM gets its way, Asian and European automakers would have a tougher time leasing EVs.
The automakers' campaigning for credits contrasts with Tesla Inc. CEO Elon Musk's calls for EV subsidies to be eliminated. In the years since he's said the federal incentives should be scrapped, Tesla
Any cuts or repeal of EV credits provided by the IRA would likely come in a reconciliation bill where Republicans will have to weigh the benefits of falling in line with Trump's priorities against potential drawbacks for high-paying jobs in their states. About $167 billion has been invested to create 200,000 EV-related manufacturing jobs in 12 states, according to the American EV Jobs Alliance, an advocacy group.
The GOP represents congressional districts with 19 of 25 major automaker battery and EV assembly plants in operation or under construction. Most of the remaining facilities in Democratic Party-represented districts are in states that supported Trump in the November election.
The concentration of EV facilities in Republican states has fueled hopes in the industry that IRA subsidies supporting battery production are more likely to survive than the consumer-facing tax credits.
Autos Drive America, which lobbies for foreign-owned carmakers, has said that preserving both the consumer credit for EVs and the manufacturing credits for domestic battery manufacturing are among its top legislative priorities for the year. Some carmakers have argued that eliminating the tax credits that bolster consumer demand will undermine the new EV and battery plants that are concentrated in Republican states.
Trump's pledge to eliminate EV tax credits comes with a carrot for automakers: He wants to weaken Biden-era fuel efficiency rules that would effectively require half of all new car sales in 2032 to be battery-electric. Easing those rules would lessen the pressure on companies to sell more EVs.
That could in turn reduce the need for federal incentives and discounts to support EV sales, GM Chief Financial Officer Paul Jacobson said during an investor presentation on Tuesday.
