Trump EV Skepticism Threatens $54 Billion in Korean Investments
South Korean battery makers are rethinking US investment plans
President-elect has blasted Biden-led incentives to buy EVs
Bloomberg
By Heejin Kim
December 8, 2024South Korean companies are reconsidering their $54 billion investment blitz to build electric-vehicle battery plants in the US over concerns President-elect Donald Trump could undo tax credits for EVs.
Some Korean companies have slowed or hit the pause button on any ongoing construction of some plants because they’re concerned about reduced demand for EVs and what Trump would do during a second term in the White House, people familiar with the matter said, asking not to be identified due to the sensitivity of the issue. Posco Future M, which makes cathodes for General Motors Co., said in a filing in September that it is delaying the completion of its plant in Quebec due to “local conditions.”
Although companies haven’t taken any action yet, many are “anxious” about to what degree Trump would slash government incentives for the EV market, said Kenny Kim, chief executive officer at SNE Research, a Seoul-based research firm that focuses on Korean battery makers.
Trump has long criticized President Joe Biden’s efforts to subsidize EVs through his landmark energy bill, the Inflation Reduction Act. The incoming administration is looking to slash fuel-efficiency requirements and, according to a Reuters report last month, could eliminate the key $7,500 consumer-tax credit.
Ending hundreds of billions of dollars in subsidies, tax credits and other incentives would threaten tens of thousands of US jobs and undo years of work shifting the global EV supply chain away from China. It could also hit the earnings of Korean firms, key US partners in the effort to reduce reliance on Chinese suppliers, at a time when they’re already suffering from weaker demand for EVs and falling battery prices.
“We are paying attention to every single word from Trump” about EVs, said Byeonghoon Kim, chief executive officer at Ecopro Materials Co., a supplier of precursor materials for the EV batteries used by Ford Motor Co. and General Motors Co.
“We have considered the Inflation Reduction Act as a very important issue so far,” Kim said. “If there’s any change in the policy, we may have to change our strategy too.”
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