Report
How the Inflation Reduction Act is driving U.S. job growth across the electric vehicle industry
Executive summary
Industry investments and consumer incentives from the Inflation Reduction Act (IRA) are strengthening American leadership on cars and trucks, driving job creation across the U.S. transportation sector, and expanding consumer choice and economic benefits. Since the passage of the IRA in 2022, the automotive industry has announced investments of about $125 billion in electric vehicle (EV) and battery manufacturing in the United States. These investments will support hundreds of thousands of jobs while promoting the competitiveness of the American auto industry amid the global transition to EVs. These jobs and the global industrial competitiveness of the U.S. auto industry are at risk, however, with the recent interest in Congress in repealing EV related provisions in the IRA.
This report assesses the impact of a repeal of key EV-related IRA tax credits on jobs in the United States through 2030. First, we project the number of new U.S. jobs that would be created under the IRA from 2026 through 2030. We then analyze the impact that an IRA repeal would have on EV sales in the United States through 2030. We next estimate the net change in the manufacture of EVs and internal combustion engine vehicles (ICEVs), as well as the loss in battery manufacturing and charging infrastructure installation and maintenance. From this, we quantify the net change in employment that would result directly in each of these industries from IRA repeal.
Figure 1 summarizes our findings on the job growth that would occur from 2026 through 2030 (compared with 2024) with and without the EV-related provisions in the IRA. Each bar shows the impacts in the vehicle production, battery manufacturing, and charging infrastructure industries, with the net impact across all three sectors indicated by a gray circle. We project that the IRA would drive a net creation of more than 118,000 new direct jobs across the U.S. vehicle, battery, and charging industries from 2026 to 2030. The repeal of the IRA would lead to a net loss of approximately 130,000 jobs in 2030 compared with a case with the IRA. We find that, if the IRA were repealed, there would be a net loss of jobs that exist today, starting in 2026.
Figure 1. Projected growth in U.S. jobs compared with 2024 under the With IRA and Without IRA scenarios
Figure 2 breaks down the net employment changes resulting from IRA repeal in each industry for the top 15 affected states in 2030. IRA repeal would lead to a loss of between 10,000 to 16,000 jobs in each of the top 5 states most affected, with 14 states projected to experience losses of more than 2,000 jobs by 2030.
Figure 2. Net impact on jobs in 2030 with IRA repeal in the most impacted 15 states
Key findings
From this analysis, we find that:
- Inflation Reduction Act repeal could cause up to 130,000 net direct jobs to be lost across the U.S. EV industry by 2030, and about 440,000 jobs lost when considering indirect effects. There would be direct job losses of about 30,600 jobs in vehicle production, 85,000 jobs in battery manufacturing, and 14,200 jobs in charging infrastructure. Reduced EV sales and domestic battery production could also lead to depressed growth in indirect and induced jobs, such as in the mineral processing, retail, and hospitality industries; we estimate that an additional 310,000 indirect jobs could be lost with IRA repeal.
- Inflation Reduction Act repeal would jeopardize progress in onshoring vehicle production. The consumer EV tax credit and battery manufacturing tax credit specifically incentivize domestic vehicle and parts manufacturing. Investments stemming from these tax credits will contribute to increased onshoring of auto and battery industry jobs. Without those provisions, we do not expect the same volume of U.S. vehicle and parts manufacturing capacity, though we do not specifically assess the effects of potential changes to tariffs. While EVs and non-battery parts generally require fewer assembly and manufacturing jobs than ICEVs, we find that this effect is more than offset by the onshoring effect of the IRA; with IRA repeal, the United States would lose auto assembly and parts manufacturing jobs overall. This is additional to the large job losses that would occur in the battery and charging infrastructure industries.
- Most of the job losses associated with IRA repeal are in the Midwest and southern states, where significant EV supply chain investments have been announced as a result of the IRA. The 15 states where we project the greatest number of jobs not materialized are Michigan, Texas, Tennessee, Nevada, California, Kentucky, Georgia, Ohio, Indiana, North Carolina, South Carolina, Illinois, Arizona, New York, and Alabama. Twelve of these 15 states are in the Midwest and South. Inflation Reduction Act repeal would lead to 10,000 to 16,000 jobs lost in each of the top 5 states most affected, with 14 states projected to experience more than 2,000 job losses by 2030. Many of these states already have well-established light duty vehicle manufacturing industries, which make them prime candidates for investment in new EV-related industries, or are expected to have large populations of EV drivers requiring significant charging deployment throughout the next decade. We expect corresponding negative economic impacts in these states. Should the IRA be repealed, these states are likely to feel the greatest impact.