Bloomberg reported on November 3 that the U.S. Republican Party proposed a bill to abolish the US$2,500 to US$7,500 federal tax credit for electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) customers as a part of its tax reform plan. The bill is implemented next year once the U.S. Congress passes it and President Donald Trump signs it.
The bill is likely to negatively affect the popularity of EVs in that the U.S. is currently the second-largest EV market in the world. On November 3, the stock price of Tesla dropped to US$299.26 per share.
South Korean secondary battery manufacturers are likely to take a hit, too. At present, LG Chem is supplying secondary batteries to GM, Ford, BMW, etc. The three automakers sold a total of 69,617 EVs in the U.S. market from January to October this year, accounting for almost half of the market’s total EV sales volume for the same period. Samsung SDI, whose customers include Volkswagen and Mercedes Benz, is having a hard time making a profit due to fierce competition and rising raw material prices like most of the other South Korean secondary battery manufacturers. Experts point out that they need to focus on Europe and China instead.
“The Chinese government implements new energy vehicle (NEV) credits next year to compel the production of a certain number of vehicles using alternative energy sources,” said Samsung Securities, adding, “The Chinese EV market is expected to grow more rapidly than the U.S. EV market for the time being.”