Cuts to EV, clean energy tax credits could cost jobs in Georgia, advocates warn

As House Republicans seek ways to pay for President Donald Trump’s budget priorities, they are eyeing cuts to federal tax credits passed under the Biden administration that have helped make Georgia an electric vehicle and clean energy manufacturing hub.

The rollbacks have to clear several hurdles before they become reality, but EV industry groups and environmentalists are warning the changes could cost jobs in Georgia and other GOP-led states, which have benefited most from the incentives.

Albert Gore, executive director of the Zero Emission Transportation Association, warned the legislation “could slam the brakes on America’s progress towards global competitiveness in manufacturing, while ceding leadership to other countries.” ZETA is an EV industry coalition that counts Rivian, Mercedes-Benz and Tesla among its members.

As of late last year, 82,000 Georgians had jobs working in the clean tech industry, according to a Chambers for Innovation and Clean Energy report. Many of those jobs were created since the 2022 passage of President Joe Biden’s signature climate and health law, known as the Inflation Reduction Act.

Last month, narrow Republican majorities in the House and Senate approved an expansive budget resolution laying out plans to extend corporate tax cuts passed during Trump’s first term, among other measures.

But the resolution is just a road map.

To codify the tax cuts, legislative committees must go line by line through the budget and decide where to cut spending to make up for the reduced tax revenue, a process called reconciliation. Then, the reconciliation bills must be approved by both chambers.

This budget-writing effort is designed to get around the Senate filibuster to pass with a simple majority.

The proposal causing heartburn in the clean energy and electric transportation sector was released Monday and passed Wednesday by the House Ways and Means Committee. The bill ponders significant cuts to IRA-backed programs.

The IRA created a bevy of federal tax credits to encourage companies to build electric vehicles, batteries, solar panels and more in the U.S. It also allowed consumers to save on the purchase of EVs and other clean energy technologies made in North America.

For now, those incentives are still available. But it appears many are likely to be on the chopping block to help pay for Trump’s tax cuts.

Under the bill passed out of committee, a $7,500 credit available for new EV purchases and a $4,000 one for used models would only last through the end of 2026, with other restrictions starting at the end of this year.

The bill also calls for a phaseout of the IRA’s advanced manufacturing production credit, which offers generous tax breaks to facilities producing solar and battery components, critical minerals, and other clean energy inputs.

Other targets for elimination are the clean electricity production and investment tax credits, which allow businesses that install solar and other clean energy systems to deduct a portion of their cost from their federal taxes. A separate credit for homeowners who install solar systems would also be axed under the GOP bill.

Georgia’s emergence as an EV and clean energy manufacturing hub began before most of these federal incentives were created after the IRA was passed in late 2022.

Rivian announced plans to build its $5 billion factory in Georgia in late 2021, but vertical construction on the site about 40 miles east of Atlanta has not started yet. The company has promised the plant will create 7,500 jobs.

Soon after, Hyundai Motor Group announced plans for its $7.6 billion “Metaplant” outside Savannah. The facility, which is now producing vehicles that qualify for federal EV tax credits, is expected to eventually employ 8,500 workers.

But the torrent of projects coming to Georgia accelerated in the years after the IRA’s passage.

Solar manufacturing giant Qcells, which is completing a $2.5 billion expansion of its manufacturing footprint in Northwest Georgia, has said its investment was spurred in part by the federal incentives. A constellation of other factories supplying EV components, solar glass and other clean energy technologies have also put down roots in the Peach State.

Since Trump’s election, a few high-profile Georgia projects have already been canceled or paused. In early February, battery maker Freyr pulled the plug on plans to build a $2.6 billion plant in Coweta County. Days later, Aspen Aerogels, which makes materials that boost fire safety in EVs, said it was indefinitely halting construction of its factory outside Statesboro.

If Republicans in Congress follow through on slashing much of the IRA, their Democratic colleagues warn it could cost jobs in Georgia.

U.S. Sen. Raphael Warnock, D-Ga., said in a statement that the moves, if finalized, would mean “good-paying clean energy jobs are under threat,” adding that, “we should not be sacrificing Georgia jobs for tax cuts for folks who are already well off.”

Georgia’s other Democratic senator, Jon Ossoff, noted few states have benefited more from the clean energy incentives than Georgia.

“If Republicans repeal these manufacturing incentives, it could be catastrophic for Georgia’s economic development,” Ossoff said in a statement.

The Ways and Means Committee’s bill could put some Republicans, like Rep. Buddy Carter, R-Pooler, in a tricky spot. Carter represents most of coastal Georgia, including the area outside Savannah where the Hyundai Metaplant is located.

Earlier this year, Carter was one of several Republicans who wrote a letter to House Speaker Mike Johnson, expressing support for preserving some federal EV and clean energy credits.

But in a statement, Carter called Republicans’ reconciliation package a “smart bill” that will make “key tax cuts for individuals and small businesses permanent, providing the stability they need to continue investing in America.”

A spokeswoman for Carter, who plans to run for the Senate seat held by Ossoff, did not directly respond to questions about whether he supports the cuts to clean energy programs floated so far.

For now, the companies behind Georgia’s largest EV and clean energy projects seem to be moving forward as planned.

In a statement, Hyundai touted the growth of its U.S. manufacturing foothold, including its plans to invest $21 billion in the next four years. The company said it looks forward to working with the Trump administration and Congress to support American manufacturing.

Still, Hyundai stressed that it views EVs as its best opportunity for future growth and said it supports “government incentives and tax credits to help Americans purchase EVs at a time when affordability remains one of the biggest barriers to the segment’s growth.”

Rivian spokesman Peebles Squire said the company remains “laser-focused on bringing back American manufacturing, creating 7,500 jobs and new economic opportunities with our future Georgia facility.”

Rivian’s two current consumer EV models, the R1T truck and R1S SUV, are too expensive to qualify for the federal tax credits, but cheaper and smaller models it plans to build in Georgia likely would. Cox Enterprises, which owns The Atlanta Journal-Constitution, owns about a 3% stake in Rivian.

Qcells declined to comment on the potential sunsetting of some federal solar tax credits.

Don Moreland, executive director of the Georgia Solar Energy Association, said residential solar and battery systems were a “vital solution” during Hurricane Helene, which knocked out power to more than a million Georgia customers last fall. He said the potential end of federal incentives for residential systems would make it more expensive for others seeking to boost their homes’ storm resilience.

“Congress should not turn their backs on Georgia families at this time,” Moreland said.

— Business editor J. Scott Trubey contributed to this report.