EV companies, battery makers urge Trump not to kill vehicle tax credits

WASHINGTON: A group representing major electric vehicle and battery manufacturers today urged President-elect Donald Trump not to kill tax credits for electric vehicle sales and production, citing the impact on key states that voted for the Republican.

The Zero Emission Transportation Association - whose members include Rivian, LG, Tesla, Uber, Lucid and Panasonic - said production tax credits have driven enormous job gains in states like Ohio, Kentucky, Michigan and Georgia, and warned killing those production and consumer tax credits would undercut those investments and hurt American job growth.

ZETA executive director Albert Gore said the tax credits are critical to "actually compete to win against China."

Reuters reported on Thursday the Trump transition team wants to kill the US$7,500 (RM33,555)) consumer tax credit for electric-vehicle purchases, citing sources. EV and battery maker stocks fell on the Reuters report.

Automakers have been making the case to the Trump transition team and lawmakers that they face stringent regulations and need tax incentives to meet them.

The Alliance for Automotive Innovation urged Congress in an Oct 15 letter to retain the EV tax credits, calling them "critical to cementing the US as a global leader" in future auto manufacturing.

Representatives of biggest EV maker Tesla told a Trump-transition committee they support ending the subsidy, Reuters reported.

Trump has said he plans to begin the process of undoing the Biden administration's stringent emissions regulations finalised earlier this year. The rules cut tailpipe emissions limits by 50% from 2026 levels by 2032.

Trump told Reuters in August he would consider ending the US$7,500 tax credit for electric vehicle purchases. "Tax credits and tax incentives are not generally a very good thing," he said.

Trump could take steps to reverse Treasury Department rules that have made it easier for automakers to take advantage of the US$7,500 credit or could ask Congress to repeal it entirely.

During his first four-year term, Trump sought to repeal the EV tax credit, which was later expanded by President Joe Biden in 2022.

US Energy Secretary Jennifer Granholm echoed ZETA's stand, saying removing the tax credit would cede ground to car-makers in China.

"It would be so counterproductive," she told reporters today at the COP29 climate conference in Baku.

"You eliminate these credits, and what do you do? You end up ceding the territory to other countries, particularly China."