How could US policy changes affect domestic battery, EV, and energy stationary storage markets?

Key takeaways

• While the current administration is unlikely to fully repeal the Inflation Reduction Act (IRA), its policy changes and shifting priorities could make it more difficult for consumers and manufacturers to receive tax credits and funding for some energy-related projects and purchases.
• The current administration’s Secretary choices will greatly affect the energy landscape, and utilities will likely see the effects as the Secretaries navigate the conflicts between trying to lower energy prices and shifting away from certain electrification and battery technology.
• Rising tariffs and increased scrutiny of Chinese batteries and related components could raise prices for batteries, particularly in the energy stationary storage (ESS) market.
• Policies supporting the buildout of the domestic battery supply chain are likely at a lower risk for repeal than EV tax credits and emissions regulations due to investments and job creation at the state level.
• Incentive repeals or stricter requirements for tax credits could result in lower EV adoption in 2025 compared to earlier expectations, but our forecasts expect EV adoption to grow in the long term as new models release and costs decrease because of improvements in battery technology.