For a while, it all seemed like it might just work out.
By one estimate, about 130,000 American jobs were said to be riding on the electric-vehicle boom sparked by the Inflation Reduction Act. Other estimates put that number around 160,000; if you include indirect but related fields, it may be closer to half a million.
Regardless, it’s clear that the Biden-era legislation that laid out incentives to manufacture EVs and batteries domestically, along with penalties if automakers don’t, was set to drive a lot of employment. Add in the potential to catch up to China’s decades-long lead on battery technology and the potential for less air pollution, and America’s EV race seems like a win for all involved.
So why would President Donald Trump and a Republican-controlled Congress be so dead-set on scrapping all of that, especially when bringing manufacturing jobs back to America is supposedly one of their top priorities?
That question has been on a lot of people’s minds this week as the U.S. House of Representatives’ finalized version of Trump’s budget bill not only kills the EV tax credit and EV manufacturing incentives, but also makes EV ownership itself more expensive through new taxes. This, despite record EV sales in America in 2024 and nearly every automaker announcing huge EV investments—including domestic manufacturing, disproportionally focused in red and purple states.
The answer comes down to three things: climate change, oil and gas, and China.
The first part of that is no secret: Trump and much of the rest of the Republican Party do not believe in the reality of climate change, despite an overwhelming abundance of scientific evidence. The second and third parts of that are intertwined and a little more complicated.
But the best explanation I’ve seen yet for why the Trump White House and a GOP-controlled Congress are so determined to dismantle EV growth comes from Politico this week. That story describes a kind of schism within the Republican party at the moment.
On one side, you have politicians who may be more climate-skeptical but want to protect jobs in their districts. That side wants America to more directly compete with China on technologies where the country has gained a commanding lead, like batteries, EVs, solar panels and energy storage.
And then there’s this side, to quote that story:
The other side says China has already won the clean energy race, due in part to practices such as forced labor, massive subsidies and intellectual property theft — and playing in that game would make the United States the loser. They want the U.S. to focus on energy sources it already dominates, including oil, natural gas and coal.
When it comes to winning on clean energy, Trump just isn’t interested.
Trump’s Energy Department confirmed as much in a statement to POLITICO that focused largely on oil — an energy source that the U.S. produces more of than any other country.
“Thanks to President Trump, America is leading the way in lowering costs by removing red tape and unleashing affordable, abundant, and reliable American energy,” the department said Friday, adding: “As the world’s largest oil producer, the United States welcomes a secure and stable global supply of oil that promotes economic prosperity at home and promotes peace and stability around the world.”
In other words, America is to be an oil-and-gas country. Let China have its EVs and battery power and renewables. The United States is going to walk away and focus on petroleum, coal and other fossil-fuel sources.
One policy source quoted in that story said he long feared a day when “a U.S. president would ask: If China’s lead is so big, ‘then why do we play the game?'”
It is perhaps the simplest, clearest and best way to explain America’s looming retreat from clean energy—including battery-powered cars—as a matter of industrial policy. Climate change isn’t real, and China’s got the market cornered on this stuff, so we’re going to do our own thing. And our own thing is oil and gas. Apparently, that will be the case even if it means sacrificing American jobs.
The risks to this approach are obvious. Besides the climate crisis in the U.S. feeling more palpable than ever, it’s a fallacy to believe that American consumers simply won’t want transportation that is cleaner, more powerful and offers a better experience overall than what they have access to now. It is also a fallacy to believe that some other country’s more advanced technology won’t make its way to our shores somehow, especially after Trump is done serving his (presumable) four years in office.
Moreover, the risks to the automotive industry in America, from its domestic car companies to foreign-born ones with sprawling factories and tens of thousands of stateside jobs, are readily apparent. Without incentives to spur EV purchasing, it’s unlikely that billions of dollars in existing investments will ever pay off.
It’s similarly unlikely that the price of batteries, the largest single cost center on an EV, will go down quickly here without substantial investments—or that America will ever be able to build up a battery supply chain robust enough to not depend on China or even Japan and Korea for power sources. (An iPhone, even one made in America, does not run on diesel, after all.)
It is a vision of the future that depends entirely on an inherently finite resource, condemns millions of American kids to childhood asthma and is out of step with the way the rest of the world is moving.
But it’s a future that the oil and gas industry is willing to pay for, because it’s seeing what’s happening in China and other parts of the world. The only problem is that the rest of us are being asked to pay for it, too.
Contact the author: patrick.george@insideevs.com
