Policy Reversal Handed Solar and EV Dominance to China

Trump gave away any chance of the U.S. remaining competitive

BACKSTORY | CHINA'S RACE FOR SOLAR DOMINANCE

China manufactures eighty percent (80%) of the world's solar panels. That share is large enough that the global energy transition runs largely on Chinese production capacity. China didn't stumble into this position. Two decades ago, it decided that clean energy would define the next industrial era and organized its economy around that bet, putting $625 billion into the sector in 2024 alone - nearly a third of all clean energy investment on the planet. Chinese companies now file seventy-five percent (75%) of global clean energy patent. And, in 2030, their projected solar manufacturing capacity will exceed the entire world's expected demand by sixty-five percent (65%).

BACKSTORY | U.S. RESPONSE

The U.S. saw this coming. In 2022, it responded with the Inflation Reduction Act (IRA), directing $369 billion toward domestic clean energy production and manufacturing. The goal: build American capacity in the sectors China was racing to control.

The money followed. Hundreds of billions in new factory projects were announced across the country, with battery plants breaking ground in Georgia. And, electric vehicle (EV) manufacturing coming online in states that hadn't benefitted from new industrial activity that it hadn't seen in decades.

COMPLETE REVERSAL | POLICY WHIPLASH

Then, on January 20, 2025, the funding was frozen by executive order.

The order halted IRA disbursements across every federal agency on the first day of the new administration, and the damage showed-up quickly. In the first quarter of 2025, clean energy companies cancelled or walked back nearly $8 billion in planned U.S. projects, including a $2.6 billion battery factory in Georgia and a $1.2 billion lithium plant in Arizona.

China didn't pause because China doesn't organize its industrial policy around four-year election cycles.

Therein lies the core problem with reversing course every time an administration changes. Other countries make ten-year industrial bets. American manufacturers cannot do the same when, incentives originally established to justify a project, might disappear the morning after the next election. The result: factories aren't built, or they're built somewhere else.

IMPORTANCE OF POLICY CONSISTENCY TO ADDRESS POWER NEEDS

Clean energy policy should not be about ideology. The country that controls solar and battery manufacturing holds leverage over the economies that depend on those technologies. Competing at that level requires policy that holds across administrations, with enough consistency that a manufacturer can break ground on a facility knowing the incentive structure won't change before the facility opens.

Bipartisan policy is the mechanism by which our country could signal to private capital that the rules will hold regardless of who wins the next election.

Trump's decision to reverse course on day one did not make a point. It handed China an advantage, one that it did not have to earn.

CARIN'S STANCE: Carin has campaigned on bipartisan energy and climate solutions built to survive changes in administration. The Inflation Reduction Act was exactly that kind of framework, one that both parties had economic and strategic reasons to support. Cancelling our funding conceded ground to the one country we're supposed to be out-competing. Restoring key provisions of the IRA is a top priority.

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Aashvi Geddam, Policy Research, Carin for Congress