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➡ President-elect Donald J. Trump’s policies are likely to dampen adoption of electric cars and demand for battery materials.
➡ Trump’s promises to boost US manufacturing may mean a continuation of government support for battery materials production.
On the campaign trail last year, Donald J. Trump ping-ponged between expressing his love for electric vehicles (EVs) and criticizing government support for them as “insane.” As a result, the country’s battery industry sees the impact of his victory in the US presidential election as a question mark.
The Trump administration will probably try to eliminate tax credits in the Inflation Reduction Act for buying EVs, says Bryan Bille, a policy analyst at Benchmark Mineral Intelligence, a research firm focused on the battery supply chain. This move would slow the adoption of EVs and reduce demand for batteries and battery chemicals. After Trump’s election, Benchmark lowered its forecast of US demand for lithium and nickel chemicals in 2029 by 15%.
On the other hand, a Republican-led government could make it easier for companies planning mining and metal-refining projects to secure environmental permits, Bille says. Over the past few years, lawmakers have proposed legislation to speed up the federal government’s permitting process, but the bills have failed to pass despite bipartisan support. Such efforts could become a bigger priority during Trump’s second term. Trump and his allies “seem to be keen to address this rapidly,” Bille says.
Trump is also eager to boost US manufacturing, notes Rob Burrell, research manager at the battery industry intelligence company Project Blue. That means tax credits for new battery materials plants are more likely to stay than the consumer EV tax credits. Battery materials firms are building many of these plants in Red states, and an attempt by the Trump administration to pull funding from them could face resistance from GOP lawmakers and governors.
But companies considering US battery materials projects will probably be hesitant to make final decisions until the incoming administration’s policies become clearer. Trump frequently broadcasts his enthusiasm for US-based manufacturing and criticizes government support for electric cars. “That unpredictability is putting some people off in terms of making big decisions,” Burrell says.
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