The 2024 U.S. Election and future of the Inflation Reduction Act (IRA)
🔍 As the 2024 election approaches, the future of the Inflation Reduction Act (IRA) comes into focus. Here’s a look at what a potential change in administration could mean:
đź‘Ą Harris/Walz Administration: If Kamala Harris and Tim Walz were to secure the Presidency and Vice Presidency, it's unlikely we'd see major new additions to the EV landscape. Their focus would probably remain on implementing existing IRA provisions and continuing the administration of funds and programs by various agencies.
🔄 Potential Rollbacks: Former President Trump has clarified that he aims to overturn Biden-era "EV mandates." Although the U.S. lacks specific EV mandates, Trump’s campaign rhetoric suggests he will go after IRA’s EV subsidies and tax credits, and suggest a potential push to repeal or significantly reduce provisions like Section 30D (EV purchase incentives) and Section 45X (clean energy and battery investments in the U.S.).
🔍 Section 30D: A Trump administration might scrutinize provisions related to "foreign entities of concern," particularly focusing on battery material sourcing and vehicle assembly locations and making the rules more stringent. This contrasts with the Biden Administration’s broader interpretation, which has allowed more flexibility and time for automakers to adjust.
🔋 Section 45X: This section provides tax credits for clean energy manufacturing in the U.S. Trumps is likely to face substantial pushback from Republicans if he goes after it given the significant investments and job creation it drives across red and blue states.
đź’µ The IRA has spurred over $124 billion in clean energy investments and 100,000 new jobs across more than 300 large-scale projects. Any changes to incentives or their administration could potentially slow clean energy growth and impact new technology development.
đź“ś Executive Actions: A Trump administration might use executive orders to reinterpret IRA provisions, potentially narrowing eligibility for tax credits and altering guidelines for clean energy investments and manufacturing. Agencies like the Treasury Department could receive new directives to restrict tax credits, particularly around battery components and manufacturing practices.
🏛️ Legislative and Political Challenges: Repealing the IRA entirely would be challenging without Republican control of Congress and the presidency. More likely, Trump might focus on altering IRA implementation through executive orders rather than seeking a full repeal.
🔧 Biden Administration Strategy: Biden’s team is working to allocate IRA funds before any potential changes in Administration. However, Trump’s actions even in this instance could include, but likely met with political or legal pushback:
1. Terminating or altering grants
2. De-obligating or reclaiming funds
3. Redirecting funds to different activities