Southern Alliance for Clean Energy: Killing EV tax credits will hurt American workers, help China

Southern Alliance for Clean Energy: Killing EV tax credits will hurt American workers, help China

Stan Cross

Southern Alliance for Clean Energy

Updated March 27, 2025, 4:22 p.m. ET

• The global electric vehicle market is experiencing rapid growth, with sales increasing by 25% in 2024.
• The United States has seen significant growth in EV manufacturing, particularly in the Southeast, thanks in part to government tax credits.
• Maintaining these credits is crucial for supporting American jobs, securing domestic supply chains, and promoting clean energy adoption.

In 2024, the global auto market grew by 25%, and nearly one in five cars sold globally is now electric. A record 1.3 million EVs were sold in the US, a 7.3% year-over-year increase that outperformed the 2% increase in nationwide sales of gas vehicles. Automakers are offering an increasing number of EV models to compete in this rapidly expanding global marketplace.

Congress should ensure that automakers build these EVs and batteries in the U.S. so that American workers benefit. An essential part of this is preserving existing EV manufacturing and consumer tax credits, which have unleashed over $215 billion in announced private-sector EV and battery investments and created 238,000 jobs.

If you think this economic boom doesn't apply to Georgia, think again. Over the past two years, Georgia has become a leading hub for electric vehicle and battery production. As of the end of 2024, Georgia ranked No. 1 in the country for EV and battery manufacturing investments at $25.5 billion, creating over 27,000 new jobs. Most of these investments deliver economic development and employment to the state's rural communities, like Hyundia's $6 .3 billion EV and battery metaplant in Bryan County, Georgia. Hyundai's Bryan County operations are expected to create 3,400 jobs. Additionally, more than $2.7 billion in investment and an anticipated 6,900 jobs across the state have been announced by the metaplant's 17 suppliers.

Manufacturing and consumer tax credits work together

The manufacturing and consumer tax credits were designed to complement each other by expanding domestic EV and battery manufacturing, creating American jobs, securing domestic supply chains, and encouraging EV adoption. Eliminating either the manufacturing or consumer incentives will undermine these goals.

Manufacturing tax credit incentivizes companies to expand and relocate operations in the US, securing domestic supply chains and creating American jobs. Consumer tax credits provide up to $7,500 for new and $4,000 for used EVs for consumers and up to $40,000 for fleet operators to switch to EVs. However, there is a critical hitch: Consumer credits are only good on EVs that meet domestic critical mineral, battery, and assembly requirements. This further incentivizes automakers and battery producers — both American and foreign — to build manufacturing capacity here in the United States.

The Southeast has emerged as the leading EV and battery manufacturing region, accounting for 38% of the nation's investments and 31% of anticipated jobs. Eliminating the manufacturing tax credit will create uncertainty and chill private sector investments in our region and nationwide. Similarly, if the consumer tax credit is eliminated, the incentives for automakers to assemble EVs and source batteries in America, by American workers, will disappear.

Researchers from Princeton University's REPEAT Project found that without the consumer EV tax credit, sales of battery electric vehicles could drop 40% by the end of this decade, resulting in 8.3 million fewer EVs on American roads in 2030. As a result, as much as 100% of planned construction and expansion of US EV and battery assembly and half of existing assembly capacity could be at risk of cancellation or closure.

Chinese brands, which account for half of all EVs sold globally and 80% of the world's lithium-ion battery production, would be thrilled to see the end of America's EV and battery manufacturing renaissance. Congress, particularly North Carolina's senators and representatives from districts with investments and jobs at stake, must understand that eliminating the tax credits will weaken domestic EV and battery production and the domestic EV market. This would deliver the global EV market to Chinese automakers and battery producers, undercutting American workers and undermining America's supply chain security.

Congress should prioritize strengthening the American auto sector's ability to compete globally, securing America's supply chains, and protecting American jobs. We are in an automotive technology and innovation sprint with China, and we are losing. The federal tax credits are helping us catch up by incentivizing American automakers to expand EV manufacturing and global auto and battery manufacturers to invest in America. Killing the tax credits will all but ensure that Chinese companies win and American workers, including thousands in North Carolina, lose.

Stan Cross is the Electric Transportation Director for the Southern Alliance for Clean Energy, which is based in North Carolina.