Rollback of IRA's EV credits could benefit China and threaten global automakers

From CNBC: 2024-05-22 14:15:53

General Motors board member Jon McNeill warns that a rollback of the Inflation Reduction Act’s support for electric vehicles would benefit China, risking losing auto manufacturing share globally. The Act provides incentives for consumers to purchase EVs and supports producing all-electric vehicles in North America to level the playing field against Chinese companies.

The expansion of Chinese automakers poses a threat to global automakers from Detroit to Germany, with concerns that Chinese competitors could undercut domestic production and vehicle prices. The Inflation Reduction Act could be a significant issue in the upcoming presidential election if former President Donald Trump is reelected, potentially leading to a repeal of the $430 billion IRA.

Trump has hinted at reversing clean energy initiatives like the IRA, which would require Republican majorities and a legislative focus on IRA rollbacks. Nonetheless, the IRA’s implementation has been slow due to legal complexities, with potential delays if Trump is reelected. Meanwhile, President Joe Biden has raised tariffs on China-made EVs to help U.S. automakers compete with Chinese companies.

McNeill emphasizes the need for bipartisan discussions on the IRA, highlighting China’s support for domestic automakers through financial incentives. Production is set to start at the Detroit-Hamtramck assembly plant thanks to a $2.2 billion investment by GM. Biden’s increased tariffs on Chinese EVs may only provide temporary protectionism against Chinese automakers entering the U.S. market.



Read more at CNBC: Rollback in IRA’s EV credits would benefit China, says GM board member