Trump team plans to abolish IRA electric vehicle tax credit… K-battery on alert.

Energy Policy Team Discusses Repeal of IRA Tax Credits
Multi-Trillion Investments in K-Batteries… Monitoring Policy Changes
Need for Business Structures Independent of AMPC Revenue,

[Seoul=Newsis] Employees inspect battery products at LG Energy Solution’s production line in Michigan, USA. (Photo=LG Energy Solution) 2024.07.31 photo@newsis.com *No resale or database storage allowed, ‘[Seoul=Newsis] Reporter Sa-eom Lee = As it has been revealed that the transition team of U.S. President-elect Donald Trump is discussing the repeal of tax credits based on the IRA (Inflation Reduction Act), the domestic battery industry is facing a significant obstacle. Considering the multi-billion investments made in the U.S. to benefit from the Advanced Manufacturing Production Credit (AMPC), countermeasures will be necessary if the IRA repeal becomes concrete.’,
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, “According to foreign media like Reuters on the 14th (local time), the Energy Policy Team, led by Harold Hamm, founder of the oil and gas company Continental Resources, and North Dakota Governor Doug Burgum, is discussing the repeal of IRA tax credits.”,
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, ‘The Energy Policy Team has held several meetings since Trump’s election was confirmed, some of which took place at Trump’s residence in Mar-a-Lago, Florida. It is known that Elon Musk, CEO of Tesla, spent considerable time there, and Tesla has also reportedly expressed support for the subsidy repeal.’,
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, ‘The IRA provides tax credit subsidies of up to $7,500 per vehicle for electric vehicles manufactured in the U.S. that meet origin requirements for batteries and critical minerals. If this benefit is repealed, demand in the U.S. electric vehicle market could drop significantly, negatively impacting the domestic battery industry.’,
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, ‘Particularly, the domestic battery industry has continued multi-trillion investments in America in alignment with the IRA. Samsung SDI is set to commence operations of its first North American production site, a joint venture plant with Stellantis, by the end of this year. LG Energy Solution is planning joint plants with Hyundai in Georgia and with Honda in Ohio, while SK On is preparing to operate a plant in Kentucky.’,
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, ‘If the IRA is repealed, companies benefiting from subsidies will have to reassess their investment strategies. As AMPC significantly impacts the profitability of battery companies, the repeal is predicted to negatively affect profitability. LG Energy Solution reported a profit of 466 billion KRW from AMPC in the third quarter of this year, while SK On received 60.8 billion KRW, both reporting black figures, but without which they would have posted losses.’,
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, ‘There are suggestions that creating a business structure that does not rely on IRA revenue is crucial. Before the IRA, the North American market was a key strategic market for investment. The battery industry plans to focus on strategies such as diversifying business portfolios and securing structural cost competitiveness to recover profitability.’,
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, ‘An industry insider stated, “The long-term growth potential of the electric vehicle industry will likely remain unchanged,” and added, “We will actively respond to minimize the impact through careful monitoring of policy and market changes following the U.S. presidential election results.”‘,
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