US EV market could become more fragmented post-tax credit repeal: analyst

Energy transition highlights: Our editors and analysts bring together the biggest stories in the industry this week, from renewables to storage to carbon prices.

The US electric vehicle market would take a demand hit and become increasingly reliant on varying state-level incentives if the House of Representative’s proposed tax credit repeal is enacted, an S&P Global Commodity Insights analyst said on May 13.

The US House Ways and Means Committee’s proposed changes revealed on May 12 would limit and terminate Biden-era EV incentives, including the federal $7,500 EV tax credit. The bill proposes to sunset the credit at the end of 2026 and, in January, be limited to automakers that have sold fewer than 200,000 units.

“Federal incentives have been seen to provide ‘equitable’ access to EV purchases, aiming at households within certain income brackets, and therefore, the rolling back of these will have an overall negative impact on national EV sales,” Commodity Insights analyst Suzanna Massingue said. “However, at state-level, various governments have already started to provide alternative schemes in order to continue to support the transition towards cleaner transport… Seemingly, the rollback of federal incentives will create greater discrepancies in EV adoption across states.”

Massingue pointed to rebates introduced in New York and proposed incentive programs in California. Additionally, the Texas legislature is considering a program that would incentivize EV purchases.

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Yuan 64,000/mt

Platts, part of S&P Global Commodity Insights, assessed battery-grade lithium carbonate at Yuan 64,000/mt May 16 on a delivered, duty-paid China basis, down Yuan 400/mt week over week and Yuan 6,000/mt month over month. China’s lithium futures contract reached an all-time low May 16 amid weakening market sentiment.

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