This chart shows recent EV investments made in Indiana. Chart created by GOEVIN
NEW CARISLE — Over the past year, thousands of construction workers have descended on the small town of New Carlisle.
They’re building a 2.5-million-square- oot facility that will make batteries for General Motors’ growing fleet of electric vehicles.
The new plant marks a $3.5 billion investment that is projected to bring 1,700 new jobs to St. Joseph County, which wooed the company by approving lucrative tax abatements and $50 million in bonds to build out infrastructure to the site. “Everything seems to be on track from our end of things here,” said Jeff Rea, president and CEO of the South Bend Regional Chamber of Commerce. “Everybody feels good about it here.”
The same story is playing out in Kokomo, where Stellantis, in partnership with Samsung SDI, is building two battery plants totaling a $5.7 billion investment projected to create 2,800 new jobs.
But EV advocates say battery plants like the ones under construction in Indiana will soon face major setbacks that could lead to fewer jobs and put billions of publicly invested dollars at risk.
Republican lawmakers this month approved President Donald Trump’s “One, Big Beautiful Bill” that guts Biden-era incentives approved in the Inflation Reduction Act that have fueled the rapid growth of Indiana’s EV industry.
SETBACKS AND JOB LOSSES
In October, the $7,500 tax credit for American-made EVs and the $4,000 credit for used EVs will end, as will the tax credit for commercial EVs that offered up to $40,000 for heavy trucks. The 30% tax credit for personal EV charging infrastructure will expire after June 30.
Those credits have been instrumental in pushing EV sales, which in the U.S. have increased 60% since 2022. During that time in Indiana, the number of new EV registrations doubled to 35,000, according to Go Electric Vehicle Indiana, a statewide initiative dedicated to advancing the adoption of EVs.
Now, without the tax credits, sales of battery electric vehicles could drop about 30% in 2027 and 40% in 2030 compared to a scenario in which Biden-era policies are continued, according to a Princeton University study published in March.
With the anticipated drop in sales, up to 72% of all battery cell manufacturing that will be operational by the end of the year won’t be needed, due to the slumping demand for EVs. Plants could be at risk of closure, the study reported.
In Indiana, that could put nearly 7,000 jobs at risk in 2030, most of which would be in the battery sector, according to an April study published by the International Council on Clean Transportation.
Battery manufacturers are already responding to the Trump administration’s abrupt shift in EV policy. A Japanese company in June halted construction of a $1.6 billion factory in South Carolina to help make batteries for electric BMWs, citing “policy and market uncertainty.”
In South Bend, a company called SiFAB will likely delay the expansion of a production line for a new kind of silicon fiber used to build lithium-ion batteries, according to Rea. The company did not respond to an interview request.
“These changes can affect what happens at our local companies here,” Rea said. “I think they’ll still advance their platform. It just may be slower compared to what they originally planned.”
‘FAR MORE THAN AN EV CREDIT’
The cuts to the tax credits come as Indiana companies have invested billions to build out their EV markets as sales have steadily increased across Indiana and the nation.
GM, Honda, Stellantis and Toyota have poured, in total, more than $1.4 billion into new EV production lines at their Indiana facilities. ENTEK, a battery-component supplier, is investing $1.5 billion to build a new facility in Terre Haute.
An EV startup called Slate is spending $360 million to convert a former printing plant in Warsaw into a new production facility for customizable electric trucks. The company said the project would bring about 1,600 jobs to the city.
Add it up, and Indiana today ranks ninth in the nation for new EV investment, according to the Environmental Defense Fund.
Now, the claw back of federal support for electric vehicles will disrupt the longterm financial plans for those companies, argued Ryan Lisek, program director for Drive Clean Indiana, a nonprofit working to accelerate EV adoption.
“These manufacturers have made multi-billion-dollar investments that were predicated on these different tax credits being there, so that’s going to hurt,” he said.
Removing the tax credits will also undermine what has become a uniquely American industry that has developed into a major economic driver in places such as Indiana, argued Albert Gore, executive director of the Zero Emission Transportation Association and son of former Vice President Al Gore.
The $7,500 tax credit approved in the Inflation Reduction Act applied only to vehicles assembled in the U.S. that don’t use minerals from any country considered a “Foreign Entity of Concern,” including China, Russia, Iran and North Korea.
Those stipulations led many automakers in the past few years to onshore their EV production in the U. S., Gore explained. Today, about 74% of all EVs sold in America are made in-country, according to the U.S. Energy Information Agency. That’s far higher than the 50% of gas vehicles made in-country and sold in the U.S.
“This tax credit was highly tailored for American manufacturing, American battery components and mineral production,” Gore said. “It was far more than an EV credit.”
“Now, this pretty intense, top-down effort to unwind a lot of the energy credits … also unwound a lot of policy that was really highly tailored around American jobs and competing with China,” he added.
‘A BUMP IN THE ROAD’
Although ending tax credits will slow the adoption of EVs, it won’t stop their long-term success in the U.S., argued Aaron Viles, senior director of campaigns at the Electrification Coalition, a nonprofit that aims to end America’s dependence on oil.
The price gap between electric and gas vehicles has gradually narrowed in the past five years while new battery technolog y has allowed for longer driving distances, making EVs far more attractive to new car buyers, Viles explained. Those trends made the Tesla Model Y the fourth best-selling vehicle in the nation last year.
Phasing out the credits could force automakers to move more quickly to bring down EV prices in order to compete with their more popular gas counterparts, argued Lisek of Drive Clean Indiana.
“It is going to hurt the market,” he said. “We’ll be seeing the training wheels come off for electric vehicles. But I think we’re going to see softer prices as manufacturers and dealers sharpen their pencils.”
Although EV companies and automakers will likely pull back on near-term investments as federal support evaporates under the Trump administration, those companies that have already made investments are set to reap the benefits, Gore asserted.
“The demand for good EVs that deliver on what people are looking for is always way higher than I think most people estimate, because in the end, they’re really good cars that people love to drive,” he said.
Back in New Carlisle, the first steel went up last month at the GM battery plant.
Liz Winter, the company’s senior manager of corporate affairs, noted GM has invested in a resilient critical minerals and battery supply chain to “support American innovation, manufacturing and economic security.”
Those investments have made “GM the engine of growth for the U.S. auto industry this year, and we don’t see that changing,” she said in an emailed statement.
Even so, the “engine of growth” will likely idle down in the coming years as EV tax credits disappear, according to Viles.
But for bedrock auto companies like GM and Stellantis that have already made huge EV investments in Indiana, the slowdown represents only a bump in the road to the industry’s long-term success, Viles argued.
“It’s a very big bump in the road, but I don’t think we’re hitting a wall.”
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