Trump’s transition team plans to eliminate IRA’s EV subsidies

Reuters reported on Thursday (local time) that U.S. President-elect Donald Trump’s transition team plans to repeal electric vehicle subsidies under the Inflation Reduction Act (IRA) introduced by the Joe Biden administration. The IRA subsidizes consumers who buy electric vehicles made in North America by up to 7,500 dollars per vehicle. The plan to eliminate the subsidies is intended to raise trillions of dollars to fulfill the promises of President-elect Trump, who campaigned on massive tax cuts throughout his presidential campaign.

Some fear that the IRA’s Advanced Manufacturing Production Credit (AMPC), a subsidy for companies that produce electric vehicle batteries, could also be eliminated. This will inevitably hit South Korean automakers and battery manufacturers such as Hyundai Motor Company tor and LG Energy Solutions, which have aggressively increased their investment in the U.S. since the IRA was introduced.

In particular, South Korea’s battery industry, which is heavily dependent on the U.S. electric vehicle market, is likely to suffer the most. South Korean battery manufacturers invested heavily in the U.S. during the Biden administration to the point of being called “overinvested” in order to receive the AMPC. They are now facing a direct hit with the return of Trump, who is negative toward electric vehicles. In the aftermath of the news, battery-related stocks such as LG Energy Solutions, SK Innovation, and Samsung SDI all fell sharply in the South Korean stock market on Friday.


홍정수 기자 hong@donga.com · 전남혁 기자 forward@donga.com