Trump’s 2nd Term Rife with Energy Unknowns: Experts Weigh In

ith just weeks until his inauguration, the EV and battery industries are in wait-and-see mode as President Donald Trump returns to the Oval Office on Jan. 20 with control of both houses of Congress.

Clean energy tax credits enacted under the bipartisan Inflation Reduction Act (IRA) are just one of the key facets of U.S. energy policy to watch, according to a prescient industry panel at The Battery Show North America in Detroit in October. Here’s their take on what’s at stake.

Future of energy tax credits

With about $4 trillion worth of tax credits for the American public on the line, Congress is poised to complete a tax bill within the next year, explained Ben Steinberg, executive vice president and co-chair of the critical infrastructure practice at Venn Strategies. Many provisions of the 2017 tax bill are up for reauthorization, influencing the future of the IRA and its impact on the EV battery supply chain.

Trump “says he wants to repeal or roll back some of the tax credits, or all of them,” Steinberg noted. But it’s Congress that will decide whether these credits remain or are rolled back—or repealed.

Venn Strategies' Ben Steinberg, KORE Power's Suzanne Swink, and Forge Nano's James Trevey confer at Battery Show North America. Credit: The Battery Show

Those choices, signaled in part through executive orders, will be made with “a scalpel approach rather than a sledgehammer approach,” advised Suzanne Swink, vice president of government relations at KORE Power. “The lobbying on the tax bill and on the IRA has already begun, and we've been working on it the House and the Senate. The respective committees that have jurisdiction over taxes have already announced working groups. The House Ways and Means working groups are taking comments on … what parts of the tax code (to address), whether IRA-related or non-IRA-related tax provisions (and) what edits people want to see.”

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Even before Trump’s election as the 47th president of the US, the runup to the vote saw stakeholders on these issues hesitating to overcommit or undercommit to their positions or course of action, noted Forge Nano CTO James Trevey. While he cautioned about a “slowdown in an industry that is trying to grow fast,” logistical discussions have begun among policy stakeholders and “need to continue … in order to ensure that this industry that takes years to get rolling can continue to get rolling without stumbling.”

Funding; loans; tariffs; emission standards—changes likely

From the tax bill and the IRA to tariffs and emissions, the Trump administration stands poised to influence a wealth of energy policy and industry direction.

Steinberg, who worked at the Energy Department under President’s Obama and Trump, noted that “even a Cabinet secretary coming in changes the direction that a department takes. It’s going to take some time to settle and really set course.”

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The panelists offered their take on these key issues:

Funding:  While Trump talked about repealing IRA funds while campaigning, laws prevent the president from unilaterally rescinding funds. “But what a president can do, and this often happens in any administration, is they jam up the system on things that they don't like,” Steinberg said. “I've experienced that in both the Democratic and Republican DOE.

Then, he added, there are the bureaucracies built not only at the DOE but the EPA and the Department of Transportation. “DOE hired 1,000 people to administer these funds, and Trump has talked about working with more limited, smaller government—In his terms, draining the swamp. So what will actually take place with those 1,000 new staff?”

However, bipartisan funding on R&D projects for the battery sector are expected to remain funded.

Loan programs: The Loan Programs Office (LPO) at the Energy Department provides loans and loan guarantees available to help deploy innovative clean energy. In fact, Swink noted, KORE Power “received a conditional commitment last June for an $850 million loan to build a battery manufacturing facility in Arizona.” She compared “the prolific nature of the Biden administration's LPO with the very dormant LPO during Mr. Trump's term” and hopes political appointees don’t “cause any concerns. We're cautiously hopeful that there will continue to be support for onshoring and American manufacturing, and that these funds will continue to flow out.”

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Added Steinberg: “LPO has a really interesting history that's been drawn into politics over in recent history.” Will Trump – who aimed to shutter the LPO in his first office – “take lessons learned and try to apply them to areas that his administration would care about, like critical minerals projects?”

Tariffs: Trump “has talked about raising tariffs considerably … on Chinese goods that are imported into the U.S.,” Steinberg said. “He invented that in his first term; President Biden took that on as well. So it's popular, and this administration's increased some of the tariffs. Expect more of that in (Trump’s) term.”

Added Swink: “Tariffs are something that lies very squarely in the executive branch. It's a delegated authority from Congress.” She sees the 30D tax credits for new clean vehicles “on the chopping block,” although Vice President J.D. Vance “made some comments that seemed … a little bit more positive on EVs.”

Emissions: Steinberg expects Trump will repeal “on day one, via executive order” tailpipe emission regulations the EPA has spent three years putting in place. “He's talked about repealing that, and he will. President Trump did it in his first term.”