After debates that ran through the night, President Trump’s flagship “Big Beautiful Bill” passed through US Congress. This marks the pivot in clean energy policy that most were expecting from the new Administration. Mainly affecting Production Tax Credits (PTC), Investment Tax Credits (ITC) and consumer tax credits, what are the key takeaways from the Bill for the US EV, battery, and critical minerals industry?

The EV market loses key subsidies

As of September 30th 2025, both the $7,500 30D clean vehicle credits and the $4,000 25E used-EV credits will be terminated. Additionally, the 45W commercial vehicle clean vehicle tax credit will also be eliminated.

Over the last three years, these credits have been a key driver of US EV sales. So far in 2025, approximately 50% of EVs sold in the US have been eligible for the 30D tax credit, according to Rho Motion’s EV & Battery Forecast.

The 45W tax credit, originally designed to support commercial clean vehicles, such as electric trucks, has in practice been widely used for leased passenger cars. When an automaker’s leasing arm buys the vehicle, it is classified as a commercial purchase, making it eligible for 45W. This credit comes with far fewer restrictions than 30D, meaning any EV is eligible. The result has been that popularity for leasing EVs has soared from around 10% of sales in 2022, to roughly two thirds of EVs sold in recent months. The removal of all these credits will have a considerable impact on the market.

Considering EV demand, sentiment in the US has shifted since Trump took office. Taking into consideration the new administration’s announcements regarding changes to emission policies, and assuming tax credits would remain in place for most of 2025, Rho Motion had already reduced its US EV sales outlook by 42% – compared to forecasts from 2024 to 2025- across the period 2025-30, prior to passage of the “Big Beautiful Bill.

An altered 45X PTC remains in place but with definitive end date

Under the Bill, the 45X credit will remain in place but with a definitive end date; a phase down will begin in 2030 with it ending fully in 2033. This applies to all recipients, from battery manufacturers to critical mineral players.  

The 45X PTC has been key to increasing domestic battery players competitiveness to imports from foreign manufacturers, as it offers a tax credit for each eligible unit of material or component produced in the US. Previously, the credit could be stacked across the whole supply chain, allowing some players to receive $45/kWh in tax credits for battery cells & modules. The final act allows stacking but only if:

  • (i) The second eligible manufactured component (secondary component) is produced in the same facility as the first eligible manufactured component (primary component).
  • (ii) At least 65% of the total direct material costs for the secondary component are attributable to primary components which are mined, produced, or manufactured in the US?

BESS retains access to 48E ITC and 45Y PTC but solar and wind sectors see change

Previously, Iola Hughes, Head of Research at Rho Motion had discussed with industry leaders how devastating the removal of the 48 ITC would be for the US storage industry at Benchmark’s Giga USA in June. However, for BESS these credits will remain in place in full, meaning players can still receive the 6% base rate and 30% bonus rate as well as other additional stackable awards for new projects.

Additionally, the 45Y tax credit remains in place for BESS, which allows electricity producers to claim credits for each kWh of electricity generated. Both these credits will remain available in full through to 2033, with a phase down ending by 2036 – although they will face stricter foreign entity rules.

However, for wind and solar, qualifications for the credits are limited. To qualify, projects must be placed in service by December 31, 2027, or have started construction within one year of the Bill’s enactment and be placed in service within four years to remain eligible for 48E/45Y. This is expected to drastically reduce wind and solar installations in the US. Considering just under 50% of US BESS projects in Rho Motion’s 2025 to 2028 BESS pipeline are paired with either solar or wind, a reduction in wind and solar will also lead to a reduction in BESS installations.

“Foreign Entity of Concern Rules” apply to 48E, 45Y and 45X

  • For 45X:- No credit is allowed for components that include material assistance from a prohibited foreign entity in taxable years beginning after the enactment of the Bill.
  • No credit is allowed in taxable years beginning after the date of enactment of the Bill if the taxpayer is a prohibited foreign entity.
  • For 48E and 45Y: No credit is allowed for a facility that starts construction after December 31, 2025, if the taxpayer receives material assistance from a prohibited foreign entity.
  • No credit is allowed in taxable years beginning after the date of enactment of the Bill if the taxpayer is a prohibited foreign entity.

The next steps for the Bill

The Bill now goes to President Trump to be signed and formally passed in law. Following this further interpretation guidance will be issued by the Treasury department. This guidance will make clear how the state interprets prohibited entity restrictions and component sourcing.

More to come for Benchmark Subscribers

A Critical Insight for Benchmark forecast subscribers will be released in the coming week as interpretation on the published text becomes clearer, and potential impacts on forecasts are re-modelled.

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