"When Congress passed the Inflation Reduction Act in 2022, it was the largest climate bill in U.S. history, with major incentives for electric vehicle production and adoption. In its wake, investment in the U.S. electric vehicle industry accelerated. But in 2025, President Donald Trump's so-called One Big Beautiful Bill Act eliminated most of the incentives, and U.S. investment collapsed."
"U.S. electric vehicle adoption lags behind the rest of the world- especially China, which has invested heavily and strategically to dominate electric vehicle markets and supply chains and to leapfrog the historical dominance of American, European, and Japanese manufacturers of vehicles powered by internal combustion engines. Electric vehicles are much simpler to engineer, and this opened a window for China to bet big on EVs with investment, incentives, and experimentation. As battery prices dropped dramatically, electric cars became real competition for gasoline cars-especially for the massive Chinese market, where buyers don't have strong prior preferences for gasoline."
Strong incentives in the 2022 Inflation Reduction Act spurred U.S. EV production, adoption, and investment, with conditional incentives to avoid Chinese materials. Investment accelerated across hundreds of projects. In 2025, the One Big Beautiful Bill Act removed most incentives and U.S. investment collapsed. Reduced EV adoption will slow transportation emissions reductions and weaken U.S. strategic leadership in key future technologies. Fewer EVs also reduce incentives and investment to decarbonize the electricity sector. China’s focused investments and supply-chain dominance in batteries and rare earths intensified global competition and complicated efforts to onshore EV supply chains.
Read at Fast Company
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