First International Resources LLC

Ahead of the U.S. presidential election tomorrow, we wanted to share our thoughts on what could happen to the provisions of the Inflation Reduction Act (IRA) focused on #electricvehicles if former President #Trump returns to the White House. Throughout his presidential campaign, Trump has been consistent in wanting to terminate the Biden administration’s “green” spending under the IRA, including rescinding all funds that are yet to be allocated. If he wins, he appears most likely to target a $7,500 consumer tax credit for #EV purchases, pushing for tougher eligibility rules for manufacturers, or seeking congressional action to repeal EV-related IRA provisions altogether, especially if Republicans take both houses of U.S. Congress. (This, of course, is a big if: Close margins in many key House and Senate races hold a possibility of a one-party sweep of the White House and Congress — or a divided government, where the president, House, and Senate would constrain each other’s ability to effect change.) Elon Musk’s potential role in a second Trump administration is a wild card: He could choose to slow down Republican efforts to eliminate EV subsidies (even though he views ending them as potentially good for Tesla and bad for its rivals), or use his political capital to advance his agenda in other areas, such as autonomous driving and AI regulations. By contrast, IRA grants, loans, and tax credits for #cleanenergy projects, including EV and battery plants, appear relatively safe. Most of that funding has already been spent, and a lion’s share of it has gone to Republican congressional districts and projects benefitting Trump’s close allies, including Musk. That, and support from influential Trump advisers like Robert Lighthizer, makes it more likely that IRA provisions supporting U.S. manufacturing would be kept largely in place. Ultimately, the IRA’s growing impact on the ground and improving attitudes among Republican lawmakers could help preserve the law in some form regardless of who wins the presidency — even though Vice President #Harris is unlikely to derive much electoral benefit from its poorly understood, politically divisive features (see the link below for more context). #InflationReductionAct #taxcredits #USelections #FIRfirsttake https://lnkd.in/eyESMbqw

We greatly enjoyed working with our colleagues at KARV and American Council on Germany to put together a stimulating panel discussion about the upcoming U.S. elections and their potential impact on the transatlantic political and regulatory landscape. Thanks to all who joined us in Berlin on Monday. We cannot wait to do this again!

We were excited to have our CEO, Zev Furst, and longtime polling partner, Jeffrey Liszt of Impact Research, headline today's panel discussion hosted by the American Council on Germany in Berlin! Distinguished panelists, which also included Andrew Frank of KARV, highlighted the key factors to watch for in the final stretch before Election Day. They also talked about how each candidate's victory could impact the political and regulatory environment in Washington, what repercussions it could have for the transatlantic community, and what European companies could do to prepare. #USelections #business #Europe #Germany

Seven states expected to decide this year's U.S. presidential election -- Michigan, Wisconsin, Pennsylvania, Georgia, North Carolina, Arizona and Nevada -- have attracted nearly half of the clean energy manufacturing investments under the 2022 Inflation Reduction Act (IRA), according to the analysis by Atlas Public Policy cited by The Guardian. But despite approximately $63 billion earmarked for investments in the manufacturing of electric vehicles, batteries and other green tech products, swing-state Democrats are far from certain to get any political benefits from the IRA, one of President Biden's top policy achievements. Just a fraction of the funding has actually been committed and a number of major projects have fallen behind schedule, partially explaining the lack of awareness among most voters, including a significant share of Democrats. Looking on the bright side, the fact that the lion's share of clean tech spending under the IRA has flown to Republican-led congressional districts within those states could provide some immunity from potential efforts to roll back the IRA if Donald Trump returns to the White House. The stakes are high: Goldman Sachs forecasts $3 trillion in clean energy spending as a result of the IRA if it continues to exist in its current form. The U.S. Treasury Department envisions as much as $5 trillion in global economic benefits by 2050 from reduced carbon and air pollution. #electricvehicles #cleanenergy #InflationReductionAct #Election2024 #FIRfirsttake

Ford Motor Company and Tesla lead the ranking of American firms with the greatest exposure to China, compiled by Strategy Risks, a consultancy that focuses on China. The evaluation included criteria like the companies’ supply chain dynamics, connections with the Chinese government and Communist Party officials, and industry regulation issues in China. Tesla and Ford each scored 20 out of 25 for exposure to sensitive political issues and alleged human rights abuses within their operations and supply chains. Ford has at least three joint ventures in China, and its partnership with CATL to build an EV battery plant in Michigan faces scrutiny in Congress. Tesla derives about a third of its sales from China and builds vehicles for export to Europe and Canada in its Chinese plants. Both automakers have faced criticism over exposure to Uyghur forced labor in Xinjiang in their supply chains. Other U.S. companies with significant exposure to China include Carrier, Apple and Coca-Cola. #China #trade #politicalrisk #autos #FIRfirsttake

An analysis of car crash data from 14 U.S. states over ten years, compiled by The Economist, shows that heavier vehicles are safer for their occupants in a collision but far more dangerous to occupants of other cars. The analysis finds that the fatality rate is roughly seven times higher when colliding with a heavy pick-up truck than with a compact car. The shift to EVs will likely exacerbate these risks because battery-powered vehicles tend to be heavier than their internal-combustion counterparts. #autos #electricvehicles #safety #FIRfirsttake

Details have been slow to emerge about Vice President Kamala Harris’s position on #electricvehicles should she win the White House. The Harris campaign has recently stated that their candidate “does not support an electric vehicle mandate.” This suggests a reversal of a position she held during her 2020 presidential run when she championed a requirement for automakers to build only electric or hydrogen vehicles by 2035. But Harris's record as a senator, which included co-sponsoring the 2019 legislation that would have required 50% of new U.S. passenger vehicle sales to be zero-emission by 2030 (and 100% by 2040), presages the Biden administration’s current tailpipe emission rules, under which EVs could account for up to 56% of new cars sold in 2030-2032. Those rules, which can theoretically be satisfied by building more efficient plug-in hybrids or gasoline-powered vehicles, are what former President Donald Trump and congressional Republicans have long attacked as the Biden-Harris “EV mandate.” Since entering the presidential race, Harris has walked away from some of the more liberal positions she espoused in the 2020 Democratic presidential pri- mary, such as supporting a ban on fracking (a major issue in Pennsylvania, America’s No. 2 producer of natural gas after Texas). Republicans have seized on Harris’s changes of heart as evidence of her lack of underlying political convictions. But an analysis of her environmental record throughout her political career makes it hardly credible that Harris, who as vice president cast a tie-breaking vote on the Inflation Reduction Act and strongly supported grants and other federal programs to expand domestic EV manufacturing and charging, would significantly deviate from the course set by President Biden toward greater EV adoption in the U.S. #USelections #HarrisWalz #autos #policy #EVs #FIRfirsttake

Americans largely support government action to tackle climate change, but some policies are losing popular appeal, according to a new survey released by Resources for the Future. In particular, support is down for government action to raise automotive fuel efficiency standards, at 62% today compared with 72% in 2020. Similarly, 46% of respondents favor tax incentives to encourage, or otherwise require, companies to build EVs, down from 60% in 2015. #climatechange #autos #evs #FIRfirsttake

American drivers are embracing plug-in hybrids. Their sales in the United States jumped 59% in the first quarter of this year from a year earlier, The Wall Street Journal reports, and their share of the overall market has roughly doubled since 2022, to 2.4%. There are now 47 plug-in hybrid models for sale in the U.S., nearly twice the number on the market in 2019. In the U.S., much of the growth of plug-in hybrids has been driven by regulations, and the regulatory trends virtually ensure that more plug-in hybrids hit the market in coming years. Hefty incentives from automakers and the federal government also sometimes make these models the cheapest option available. Additionally, some car shoppers who are interested in going fully electric still want the security of a gas engine. To be sure, plug-in hybrids have their detractors. Some clean-energy advocates say they have fewer environmental benefits than advertised because many drivers don’t plug them in and rely mostly on the gas engine. #autos #hybrids #EVs #FIRfirsttake

A longtime critic of #electricvehicles, former President Donald Trump recently appeared to soften his tone, calling himself a “big fan” of #EVs, voic- ing support for a “slice” (albeit a “very small” one) of cars being electric, and praising Tesla cars as “incredible.” But rather than an actual change of heart, Trump’s new rhetoric appears to be a sign of his growing reliance on Elon Musk, a major donor, owner of X (formerly Twitter) and possible adviser in a future Trump administration. If he wins the White House, industry analysts and Republican officials largely expect Trump to try to reverse what he has described as President Joe Biden’s “crazy” EV mandate, including rolling back a $7,500 consumer EV tax credit in the Inflation Reduction Act. He is also expected to target other key Biden administration initiatives aimed at accelerating U.S. transition to EVs, including its stringent tailpipe emission standards that could result in EVs making up as much as 56% of new passenger vehicle sales for model years 2030 through 2032. On a separate note, Trump recently cited false claims of Chinese auto companies building factories in Mexico and pledged to impose new tariffs on vehicle exports from Mexico to the U.S., regardless of whether they were built by Chinese or Detroit Three automakers. He also proposed incentives for Chinese and other foreign car manufacturers to set up production in the U.S. in a bid to avert a “complete obliteration” of the American auto sector under the Biden administration’s current policies. We are curious to hear Vice President Kamala Harris address the issue of EVs, and clean tech manufacturing investments more generally, on the campaign trail and expect this topic to feature prominently in the campaign rhetoric for the reminder of the race. #USpresidentialelections #autos #trade #inflationreductionact #FIRfirsttake