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S&P: How US Election Results Could Impact EV GrowthS&P: How US Election Results Could Impact EV Growth

Discover how upcoming U.S. election outcomes may influence EV adoption, energy storage growth, and regulatory policies, according to S&P Global's latest analysis.

Maria Guerra, Senior Editor-Battery Technology

October 31, 2024

3 Min Read
US elections and the future of energy
US election outcomes may influence EV adoption.Anson_iStock/iStock / Getty Images Plus.

As the United States approaches the November 5 elections, the stakes are high for the future of electric vehicles (EVs), energy storage, and renewable energy expansion. With each party offering distinct approaches to regulations, tax incentives, and trade policies, the election results will significantly influence how quickly the US can transition toward a low-carbon economy. The outcome could determine the pace of electrification across sectors as well as the structure of incentives and regulations supporting this shift.

Will policies accelerate or slow growth?

In its recent analysis, S&P Global discusses how the future of EVs and energy storage could play out depending on which party holds control in Congress and the White House. S&P’s analysis underscores that while demand for EVs and clean energy will persist, the specifics of their adoption and market expansion will largely hinge on the election's results and subsequent policy directions. From preserving Inflation Reduction Act (IRA) tax credits to evolving trade and tariff policies, S&P analysts detail the potential outcomes under Democratic and Republican leadership, offering insights into what the next decade might look like for these industries.

The upcoming US elections pose critical questions for the future of electric vehicles (EVs) and energy storage, with both Democratic and Republican outcomes influencing how swiftly these sectors expand. “The trend toward EVs is going to continue regardless of the election,” stated Stephanie Brinley, Associate Director at S&P Global Mobility, though she noted that the specific pace is what’s at stake. While a Democratic win is expected to speed up EV adoption, a Republican-led Congress would likely see regulatory rollbacks and a possible reduction of Inflation Reduction Act (IRA) tax credits worth $1.2 trillion over a decade.

Related:Experts on Battery Industry Market Downturn & Tariff Challenges

Analysts at S&P Global believe that a Democratic sweep, led by Vice President Kamala Harris, would likely protect and potentially expand IRA tax credits, strengthening incentives for renewable energy and zero-emission technology. This could mean substantial investment inflows, spurring manufacturers like Tesla, Toyota, and General Motors to ramp up domestic EV and battery production. Under Democratic control, analysts foresee EVs making up roughly 35% of the U.S. vehicle fleet by 2030. Conversely, if former President Donald Trump wins, the regulatory approach may slow EV and energy storage growth; a freeze on emissions standards and potential cuts to EV buyer tax credits could limit EVs to only 29% of new sales by 2030. Still, S&P Global sees the future of EVs as bright, citing long-term investments across various states, many of which are Republican or swing states, as a key factor.

Related:“Breaking Free from Coin Cells”: Ensurge Advances Solid-State Medical Batteries

US elections and the future of energy

On the trade subject, S&P expressed that both parties share a stance toward China, aiming to strengthen domestic supply chains. “If you look at both candidates running for president, both parties have announced they believe there’s going to be greater tariffs on China,” stated John Zahurancik, president for the Americas at Fluence Energy. This bipartisan trend has prompted US battery suppliers to expand domestic manufacturing, with Fluence switching from imported cells to locally produced cells in Tennessee.

Energy storage market steady despite political shifts

Analysts think the impact on energy storage markets will remain minimal despite potential disruptions. As an example, the analyses include Jeff Waters’ remarks, CEO of Powin Energy, stating, “…For stationary storage, I just don’t see it having a massive impact.” Waters also noted that even with a Republican majority, Trump would be unlikely to roll back much, citing the billions of dollars invested in "red states" that have gained support from lawmakers across local, state, and federal levels in both parties.

Related:Barra Discusses GM's Flexible ICE Production Amid EV Demand

While the US elections may dictate the pace of change, underlying industry commitments and bipartisan support for supply chain resilience will likely sustain the momentum for EVs and energy storage, even amid regulatory shifts.

About the Author

Maria Guerra

Senior Editor-Battery Technology, Informa Markets Engineering

Battery Technology Senior Editor Maria L. Guerra is an electrical engineer with a background in Oil & Gas consulting and experience as a Power/Analog Editor for Electronic Design.  Maria graduated from NYU Tandon School of Engineering with a Master of Science in Electrical Engineering (MSEE). She combines her technical expertise with her knack for writing. 

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