Donald Trump’s EV Tax Credit Takeback Could Undermine Panasonic’s Kansas Plant

By Joel Mathis
The Kansas City Star
(TNS)

Nov. 29 — It’s the largest economic development project in Kansas history.

All the numbers associated with the new Panasonic battery plant at DeSoto—scheduled to open early next year—are gigantic: Up to $4 billion in investment. As many as 4,000 new jobs. More than $800 million in tax credits from the state.

Panasonic is expected to have a transformative effect on the region and the state. Anything less, in fact, would be a major disappointment.

There’s just one problem: President-elect Donald Trump appears on track to undermine Panasonic’s work before it has even begun.

Trump—as has been widely reported—is contemplating rescinding the $7,500 federal tax credit for electric vehicles. That probably would depress the American market for EVs: Sales could fall as much as 27% if the credit goes away.

“You can’t make a vehicle $7,500 more expensive and sell more of them easily,” one analyst told The New York Times this week. “People are only willing to pay so much.”

Which in turn would inevitably depress the American market for EV batteries … like those Panasonic plans to make at its shiny new plant in DeSoto.

That doesn’t seem great.

Panasonic, for what it’s worth, says it is pressing forward.

“Panasonic Energy has made a long-term commitment to advancing the electric vehicle (EV) industry in the United States, and we have grown to be the North American market leader in EV lithium-ion batteries,” the company said in a statement. “Our commitment to and investment in Kansas began before the implementation of the EV tax credit.”

That’s good.

Still, we suddenly have a question on our hands: What (if anything) are Kansas officials willing to do to protect the state’s investment in Panasonic? Trump can’t revoke the EV credit all on his own, after all. He’ll need the help of a GOP-led Congress to act.

It’s hard to say what happens next.

A spokesman for the Kansas Department of Commerce wouldn’t respond to my questions on the topic, saying “it is too early” to comment on any actions Trump might take.

Sen. Roger Marshall’s press folks didn’t respond to my inquiry, but it’s not difficult to figure out where he stands on the topic: He cosponsored a bill early this year to end the tax credit, well after construction on the Panasonic plant had begun.

Sen. Jerry Moran, meanwhile, sent along a statement suggesting Kansas will be fine if the EV tax credit goes away. “Kansas continues to be recognized around the world for its talented workforce, innovative environment and quality of life,” he said. “Rather than trying to influence consumer choices, our tax code should be focused on creating a business environment that is pro-growth, supports manufacturing goods at home and gives Kansas workers the opportunity to thrive.”

Of course, the Inflation Reduction Act—the federal law that gave birth to the EV credit—is designed precisely to support manufacturing goods at home.

What’s more, the billions of dollars of green tech manufacturing investment made possible by the act have disproportionately benefited red states such as Kansas and Missouri, creating manufacturing jobs that elected Republicans have been happy to claim credit for.

“There’s nothing ideological about those jobs,” Lori Lodes, executive director of environmental nonprofit Climate Power, told CNN this week. “Many of those clean energy workers voted for Trump, I have no doubt.”

There are other good reasons to keep the EV credit, of course. The electric vehicle push is about climate change, designed to reduce the amount of carbon that pollutes our air and traps heat in the atmosphere.

Which seems like a pretty good idea locally, when you consider that Kansas and Missouri are both in the midst of a long-running drought.

Republicans don’t often like to talk about climate change, though. But they do like to talk about jobs. The EV credit is helping boost Kansas jobs. Let’s hope Sunflower State officials are willing to do the same.

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