Already, the private sector is showing serious signs of strain, as clean energy manufacturing investment decreased by 11.5 percent in the first quarter of 2025 amid an uncertain and hostile environment created by the Trump administration and Congress. Supporting existing industries and helping new industries take hold requires a multifaceted approach that includes strong research and development paired with initial investments, longer-term support, and proper trade enforcement. Losing one of these facets makes the effort much harder, and punting two or three amounts to giving up. Additionally, the policies left in place—namely the on-again, off-again tariffs that would take effect if the proposed legislation is enacted—likely have more to do with other ideological means rather than supporting and growing domestic manufacturing.
Building and maintaining U.S. manufacturing
As mentioned above, to onshore manufacturing of the components of critical global supply chains, the United States must engage in long-term and robust investment. This includes direct support for the build-out of manufacturing facilities, as well as support for the uptake of components and a foundation to create domestic demand—just as the CHIPS and Science Act did for semiconductors and the IRA did for multiple industries, including electric vehicles (EVs) and solar panels.
With solar panel production in particular, for years the United States had a boom-and-bust tax policy that was supposed to encourage renewable power production, including from solar. Every few years, the credit would lapse, there would be a political fight, and then it would get extended for another year or so. The solar industry never had long-term certainty and often only provided a retroactive windfall rather than forward-looking incentives. There also was barely any direct funding to support the domestic manufacturing of solar panels, even though the technology was originally invented and supported through robust research and development at the U.S. Department of Energy. Back in 2012, the Obama administration utilized tariffs to try and hold on to the last remaining parts of the domestic panel manufacturing industry, and they were kept in place and strengthened by each successive administration. Even still, solar panel production continued to decline until 2022, when it began to blossom thanks to the full-scale investment portfolio established by the IRA.
House Republicans’ bill would gut domestic manufacturing
Last week, the House Energy and Commerce and the Ways and Means committees released and moved their draft language on the president’s “big, beautiful bill,” revealing that they intend to gut key provisions of the IRA. Notably, this includes a de facto repeal of credits that support the build-out of renewable energy projects due to onerous new requirements. In addition, their language includes a direct repeal of the following credits:
- New clean vehicle tax credit: A $7,500 credit for purchase of EVs, prioritizing vehicles that are domestically assembled and whose batteries are made in North America or countries with which the United States has a free trade agreement. In turn, the credit has helped spur significant growth in EV demand. To date, there are 72,300 jobs tied to facilities making batteries and EVs that are eligible for the tax credit.
- Commercial clean vehicle credit: Up to a $7,500 credit for the purchase of a commercial light-duty EV or up to $40,000 for the purchase of a commercial heavy-duty EV. The credit can also be monetized, meaning that it can be claimed by local governments, municipalities, school districts, and other tax-exempt entities. This has made the commercial clean vehicle credit an important component in electrifying local and state government vehicle fleets.
- Previously owned clean vehicle credit: Up to a $4,000 credit for the purchase of a used EV. With lower income and vehicle price caps, the new clean vehicle tax credit is aimed at making EVs—and their associated fuel costs—more affordable for lower-income Americans.
- Alternative fuel vehicle refueling property credit: Designed to spur the build-out of charging infrastructure across the country, providing up to $1,000 for the installation of a private charger and up to $100,000 for the installation of commercial chargers.
- Advanced manufacturing production credit: The linchpin of the manufacturing renaissance, this credit provides direct support for producing goods key to growing clean energy industries, from EV battery manufacturing to critical mineral processing. The new language would subject the credit to the onerous new requirements and would phase it down early—especially the portions regarding the manufacture of wind energy parts and components. An early phasedown would likely force companies to rethink the finances of planned, under construction, and completed facilities. Worse, the House Ways and Means Committee’s proposed “foreign entity of concern” requirements are so complicated that they are likely to be unworkable, with businesses unable to establish sufficient certainty to make investments—a problem that would be compounded by the Trump administration’s gutting of U.S. Treasury staff. The new clean vehicle credit already included workable and fully implemented “foreign entity of concern” prohibitions, but House Republicans chose to throw that language, as well as the clean vehicle and manufacturing credits, away in favor of hamstringing clean energy manufacturing development for the benefit of Big Oil.
At the same time, the Energy and Commerce Committee proposes to rescind funds from the following Department of Energy programs:
- Loan Programs Office (LPO): This office has invested across clean energy industries, providing major funding to uplift innovative technologies. For example, it gave a major boost to a sustainable aviation fuels (SAF) refinery in Montana. Once fully operational, the facility would make Montana one of the leading producers of SAFs in the world, producing roughly 12 percent of global SAF supply through 2030.
- Advanced Technology Vehicle Manufacturing (ATVM) program: Alongside the LPO, this program has played a key role in American auto manufacturing by providing investments to spur the domestic expansion of clean vehicle production, notably by providing loans to Ford through the 2008 financial crisis as well as Tesla in its early days. More recently, the ATVM program supported a large EV manufacturing project in Georgia as well as Ford facilities in Kentucky and Tennessee.
- Advanced Industrial Facilities Deployment Program: This program supports major advancements in decarbonizing heavy industry, including at a steel mill in Vice President JD Vance’s hometown of Middletown, Ohio.
Repealing these credits and rescinding funds for these programs would strip away key investments to kickstart manufacturing facilities as well as longer-term incentives to help the industry strengthen and grow, and the Trump administration has also proposed drastically gutting research and development. The harms already done by the Department of Government Efficiency at the Department of Energy—including the growing rumors of first steps toward cutting investments in the Industrial Demonstrations Program which is critical for future industrial competitiveness—and in the nation have created a cocktail of failure for competitiveness in any future auto and clean energy industry supply chain.
What once was booming now fizzles
Much of taxpayers’ investment in advanced manufacturing has already been awarded or spent and was destined to pay off in the form of new factories, new jobs, and a stronger competitive position for the country. However, given the Trump administration’s decision to pull back from many of the projects and programs that would see this investment through to the end, the transformational investments made over the past few years now appear to have been wasted.
The previous administration’s investments in the EV industry—from minerals to charging to batteries to final assembly—were really starting to take hold, and as of a few months ago, job creation and private sector investment looked as sunny as ever. Indeed, private sector investments totaled nearly $200 billion as of January 2025, with projects underway supporting more than 50,000 jobs across the country and those announced projected to support tens of thousands more if they came to fruition. Alas, the uncertainty created by the Trump administration’s chaotic trade war and the worry over Congress repealing critical EV incentives slammed the brakes on this growth. In fact, during the first quarter of 2025, more EV manufacturing projects were canceled than in the previous two years combined. Billions of dollars in unrealized investments are now gone, all to pay for tax breaks for the rich in House Republicans’ proposed budget bill.
Clean energy manufacturing—beyond just EVs—has been a driving force behind manufacturing growth in the United States. Since August 2022, at least 186 new manufacturing projects have been announced, with the 94 projects underway supporting more than 100,000 jobs, all thanks to a budding clean energy manufacturing industry. That growing industry is spurred on by the existence of key tax incentives, none more so than the previously described advanced manufacturing production credit. Just the uncertainty over whether this credit and others will persist—on top of worries over the president’s reckless trade war—has led to at least $56 billion in investments and more than 62,000 jobs being lost, delayed, or threatened. A de facto repeal and phaseout of the advanced manufacturing production credit would certainly not reverse this slowdown and may just continue grinding the new manufacturing growth to an eventual halt.
Moreover, these attacks on domestic manufacturing are not harmful only to the country’s industrial competitiveness going forward: Given the strong overlap between advanced manufacturing and the country’s economic and national security, the proposed cuts stand to make the country weaker and less resilient. If the Pentagon thinks, for example, thatlithium-ion batteries are important to the military’s future, why would congressional Republicans and the Trump administration gut programs designed to ensure American leadership in that sector?
Conclusion
The Inflation Reduction Act and the CHIPS and Science Act provided a couple of important lessons: 1) long-term certainty helps new industries grow, and 2) direct support for manufacturing helps industries take hold and builds competitiveness in tough global supply chains. Yet the Trump administration and congressional Republicans are either willfully ignoring these lessons or showing the country that their priority is not actually about growing American manufacturing, nor is it about global competitiveness in the industries of the future or good jobs across communities all over the country. By canceling these highly successful policies only to pay for tax cuts for billionaires, they are showing Americans their real priority: supporting billionaires over working people.