The upcoming 2024 Presidential election in the United States looms large over the automotive industry, heralding the potential for seismic shifts in environmental policies and the trajectory of electric vehicle (EV) adoption. Should the election result in a Biden-Trump rematch, experts anticipate far-reaching consequences for automakers as they grapple with the transition to EVs amid a changing regulatory landscape.
Analysts suggest that a change in leadership could herald significant alterations in federal tax incentives, regulatory frameworks, and the distribution of billions of dollars in investments earmarked for U.S. battery and EV manufacturing. Such adjustments could fundamentally reshape the strategies of original equipment manufacturers (OEMs), suppliers, and the future capacities of battery plants across the nation, according to insights gleaned from an analysis by S&P Global Mobility.
Central to this discussion are key legislative measures such as the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL), championed by the Biden administration. These initiatives have played a pivotal role in propelling the U.S. EV market forward. However, the possibility of a Republican victory in the 2024 election raises the specter of potential rollbacks to these advancements, casting uncertainty over North American sourcing strategies and the broader automotive supply chain.
One of the pivotal battlegrounds in this electoral showdown revolves around the regulatory stance on greenhouse gas emissions and fuel economy standards. The Trump administration, characterized by its penchant for deregulation, notably revoked California's emissions waiver, signaling a retreat from stringent environmental policies. In stark contrast, President Biden's administration has embraced more ambitious targets in its efforts to combat climate change. Yet, with the specter of a Republican resurgence on the horizon, there exists a tangible risk of reverting to less stringent regulations, thus reshaping the landscape for automakers and environmental advocates alike.
A crucial barometer of the industry's response to these political dynamics lies in the realm of investment. Following the implementation of the IRA in August 2022, the U.S. witnessed a staggering influx of capital exceeding $100 billion directed towards battery and electric vehicle manufacturing initiatives. However, the fate of numerous projects currently in various stages of development hangs in the balance, as political uncertainty clouds the future of these endeavors.
In 2022, the United States was poised to house seven battery facilities boasting a combined annual capacity of 75 gigawatt hours (GWh). Yet, buoyed by incentives such as the Investment Tax Credit (ITC), the pipeline has swelled to include up to 24 battery plants either in the planning or construction phase. Should these projects come to fruition, they hold the potential to catapult the nation's total capacity to a staggering 732 gigawatt hours, underscoring the transformative power of policy incentives in shaping the trajectory of the EV revolution.
Against this backdrop of regulatory flux and political uncertainty, the automotive industry finds itself at a crossroads, grappling with the imperative to navigate the transition to electric vehicles amidst a rapidly evolving landscape of incentives and regulations. As debates rage across the political spectrum regarding the efficacy and future of these policy levers, the industry braces itself for a period of profound change, where the outcomes of the 2024 election stand poised to reverberate through the corridors of power and the assembly lines of automakers alike.
