President Trump’s threats toward General Motors Co. over its move to shutter plants threaten to undermine the advancement of electric vehicles and stymie congressional efforts to help the industry.
“We are at a pretty critical point in the development and sales of electric vehicles,” Dylan Reed, head of congressional affairs for Advanced Energy Economy, told the Washington Examiner. “Trump’s meddling could disrupt that.”
Trump on Tuesday threatened to retaliate against GM, the largest U.S. automaker, for laying off thousands of workers and shuttering several North American facilities to marshal its resources on emissions-free and self-driving vehicles.
The president said he would seek to cut GM’s federal subsidies, including for electric vehicles, a vague threat that drew attention to the debate in Congress over extending or expanding the electric vehicle tax credit.
Trump’s comments have slowed momentum for a bipartisan push in Congress to reform the tax credit, and emboldened critics of it who know that Republican supporters could be reprimanded by the president for defying his agenda.
“The time has come for the tax credit to end,” Thomas Pyle, president of the American Energy Alliance, a pro-fossil fuels group, said in a statement Thursday. “We shouldn’t be giving handouts to wealthy individuals to offset the costs of their luxury vehicles.”
Oil and gas billionaires Charles and David Koch have also rallied against the credit in recent weeks. And Sen. John Barrasso, R-Wyo., chairman of the Senate Environment and Public Works Committee, has proposed legislation to end the electric vehicle tax credit.
Critics want Congress to repeal the tax credit, and not expand it, as part of a package of temporary tax breaks slated for re-upping this year known as “extenders.”
However, the electric vehicle credit does not have an expiration date, and a new extenders package introduced by House Republican tax-writers this week did not feature a provision to repeal the subsidy.
As Trump unleashed on GM, the utility and auto industries, in a split-screen contrast, were celebrating the milestone of 1 million electric vehicles being driven on U.S. roads as of October.
Edison Electric Institute, a utility trade group, hosted an event Friday in D.C. marking the achievement, attended by representatives from utilities such as Exelon, and automakers GM, BMW, and Nissan.
The group released a report projecting that the number of electric vehicles on U.S. roads would reach more than 18 million in 2030, equaling about 7 percent of all vehicles driven — up from about 1 percent today.
Speaking at the event, Dan Turton, GM’s vice president of North American policy, said the company took notice of Trump’s comments, but is unconcerned the president will hamper the progress of electric vehicles.
He said GM foresees an “all-electric future.”
“The reality is this electrification movement is going forward anyway,” Turton said in a response to a question from the Washington Examiner.
At the same event, Rep. Paul Tonko, D-N.Y., called for his colleagues to extend or expand the federal electric vehicle tax credit, saying that improving the subsidy would be the “biggest driver” of more electric vehicle adoption.
The electric vehicle industry, led by Tesla and GM, is calling for Congress to reform the $7,500-per-vehicle tax credit for electric and plug-in hybrid vehicles, primarily by lifting the individual manufacturer cap, and allowing the credit to be used into future years.
The credit, first introduced in 2009, is capped at 200,000 vehicles sold per automaker.
GM is close to using up its availability of the tax credit. Tesla has already reached the limit, the only automaker to do so, which under the law will result in the tax credit for buyers of its cars being reduced by half for six months and then cut to $1,875 for another six months until it ends.
The effort to expand the credit has bipartisan support, with Republican Sen. Dean Heller, whose state of Nevada houses Tesla’s battery manufacturing, recently introducing a bill to remove the limit on manufacturers, but phase out the credit in 2022.
Only Congress has the power to alter the electric vehicle tax credit, and Trump could not on his own limit GM’s ability to use the subsidy, experts say.
“You can’t just remove a credit for one company that is designed to help the entire industry,” Reed said.
But Trump’s threat rankled supporters of the electric vehicle industry.
Nicole Hager, spokeswoman for Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee, told the Washington Examiner that the senator “does not think tax policy should be made in retaliation for business decisions.”
Trump has initiated other moves to undermine GM, and disrupt the progress of electric cars, at a time when the industry is seeking to overcome hurdles such as limited charging infrastructure, high — but falling — cost of batteries, poor consumer awareness, and competition from surging SUV sales spurred by low gas prices.
For example, the Trump administration is planning to freeze Obama administration fuel-efficiency standards, rather than raising them, which would have encouraged the transition to zero-emitting vehicles as a way to combat climate change.
In addition, Lindsay Walters, a White House spokeswoman, told the Washington Examiner that Trump has ordered agencies to review federal contracts and grant funding proffered to GM, in preparation for possibly revoking federal money.
GM has received billions of dollars in federal funding, much of it related to the development of emissions-free cars and advanced combustion engines, according to tracking website Good Jobs First.
Among them is a $105 million grant from the Department of Energy to build lithium-ion batteries for use in electric vehicles.
Electric vehicle supporters say cutting government funding for these technologies would help rivals like China, while sending bad signals to an emerging U.S. manufacturing base for advanced cars.
Tesla assembles electric vehicles in America, as does GM and electric bus manufacturer Proterra. The Chevy Bolt and Nissan Leaf are produced in the U.S. Volkswagen announced this week it is planning a new U.S. factory to build electric cars.
“It would be unprecedented to cut grant funding and flat out stupid to disinvest from cutting edge technology because you are upset at a company,” Dave Cook, a senior vehicle analyst at the Union of Concerned Scientists, told the Washington Examiner.
