Consumers scrambling to take advantage of expiring tax credits for electric cars drove a record-breaking quarter of U.S. clean-energy investments, according to a new report.
Why it matters: It shows that policy matters, especially if it's coming or going.
- The report by research firm Rhodium Group and MIT shows the real-time scramble of clean-energy industries in response to President Trump rescinding a range of subsidies in the recent tax law.
Driving the news: Clean-energy investments in the third quarter totaled $75 billion, it finds.
- This was largely fueled by a surge in sales in zero-emission vehicles (mostly electric cars), which reached $31 billion, a 32% increase from the previous quarter.
- The federal EV tax credits expired at the end of the third quarter.
Reality check: This is poised to be a high-water mark for such investments, as other numbers point to declines.
- Investments in the EV manufacturing sector, for example, dropped 30%, or $8 billion, compared to the same period last year.
The big picture: So far, the Trump administration's policy repeals are slowing down, not wholly reversing, trends toward cleaner energy.
- Globally, EVs are rising in more countries even amid U.S. policy headwinds, though they remain heavily concentrated in China, the EU and U.S., according to a separate International Energy Agency study.
Between the lines: It's two steps forward, one step back.
- Companies announced $6 billion in new clean energy manufacturing projects this past quarter — mostly for EVs and batteries.
- But companies also canceled $2 billion worth of projects — again, mostly battery manufacturing, Rhodium finds.
What's next: Tax credits for two other types of consumer-facing cleantech — heat pumps and distributed power and storage — are set to expire at year's end.
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