South Korean companies are reconsidering their ambitious $54 billion investment in U.S.-based EV battery plants amid concerns about President-elect Donald Trump’s stance on EV incentives. Companies like LG Energy Solution, Samsung SDI, and SK On are anxious Trump could revoke key tax credits from the Inflation Reduction Act (IRA), which heavily subsidized EV production.
The IRA’s $7,500 EV tax credit has been pivotal in boosting U.S. EV demand and driving Korean firms’ aggressive expansion into the U.S. market. However, Trump’s transition team has indicated potential cuts to subsidies and regulations, leaving many Korean firms, including Posco Future M and Ecopro Materials, to reconsider their strategies.
This shift could jeopardize 20,000 U.S. jobs tied to Korean plants and reverse progress in reducing reliance on China for battery materials. Analysts warn Chinese battery makers, like CATL, could enter the U.S. market if Trump rolls back IRA restrictions, posing competitive challenges for Korean firms.
Despite these concerns, some remain optimistic. “The U.S. market is still the most important consumer market in the world,” said Pat Wilson, Georgia’s Economic Development Commissioner. With many Korean plants located in Republican-led states, industry leaders hope Trump’s policies won’t target battery makers.