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When Congress passed the Inflation Reduction Act in 2022, it became the largest climate bill in U.S. history, with significant incentives for electric vehicle (EV) production and adoption. Following this, investment in the U.S. EV industry accelerated. However, in 2025, President Donald Trump signed the One Big Beautiful Bill Act, which eliminated most of these incentives. As a result, U.S. investment in EVs collapsed.
Reducing the number of electric vehicles will clearly mean less progress in reducing transportation emissions and diminishes strategic U.S. leadership in key technologies for the future. A new study by my colleagues at Carnegie Mellon University and myself reveals that fewer electric vehicles also mean less investment to clean up the electricity sector.
How We Got Here
U.S. EV adoption lags behind other countries, especially China, which has invested heavily to dominate EV markets and supply chains. As battery prices dropped dramatically, EVs became real competition for gasoline cars, particularly in the massive Chinese market where buyers have no strong preferences for gasoline. Today, China dominates the supply chain for battery materials like lithium, nickel, cobalt, and manganese, as well as rare earth minerals used in electric motors.
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In 2022, Congress passed the Inflation Reduction Act to address this trend by encouraging EV adoption through incentives for both manufacturers and consumers. However, it also made some of these incentives conditional on avoiding Chinese materials entirely, which led to a surge in investment across new U.S. battery manufacturing and material processing facilities.
But in 2025, Congress passed the One Big Beautiful Bill Act, which eliminated most of the incentives, causing U.S. investment in EV-related production to collapse.
Electric Vehicles Are Cleaner
EVs provide near-zero emissions when charged with clean electricity, making them one of the few technologies that can deliver transportation with minimal environmental impact. With today’s electricity grid, EV emissions vary depending on regional power generation mixes and driving conditions. However, EVs are generally better for the climate over their life cycle than most gasoline vehicles.
This matters because transportation and electricity together account for the majority of U.S. greenhouse gas emissions, and passenger cars and light trucks produce a significant portion of these emissions. The Trump administration is now claiming that emissions from cars and trucks are “not meaningful” contributors to climate change. Yet a technology that cleans up both sectors simultaneously is crucial.
Our research shows that turning away from electric vehicles misses an opportunity to make the nation’s electricity supply cleaner. By considering potential scenarios for EV adoption, we found that more EVs charging would lead to the development of clean-energy power plants. Wind and solar energy are cheaper to operate than fossil fuel plants, so they displace fossil-fuel generation even when EVs aren’t charging.
A Virtuous Cycle
Encouraging electric vehicle adoption is better for the climate because it leads to lower-emitting power plants being built. As a result, this transition not only reduces transportation emissions but also supports more clean energy investment and displaces more fossil fuel-powered generation. The global transition to EVs is already well underway due to improvements in technology and cost competitiveness.
Slowing down electric vehicle adoption doesn’t just affect transportation emissions; it also misses opportunities to build a cleaner power sector, potentially locking the U.S. into higher emissions from its top two highest-emitting sectors – power generation and transportation – while the window to avoid the worst effects of climate change is closing.
