The elimination of EV tax credits and clean energy benefits in the United States will significantly undermine the country’s competitiveness in the global energy and transportation markets, particularly in relation to China. As the world transitions toward cleaner technologies, government support plays a critical role in accelerating domestic innovation and adoption. Without tax incentives, electric vehicle adoption in the U.S. will likely slow, weakening demand for American-made EVs and reducing the incentive for manufacturers to expand production or invest in new technologies. Meanwhile around the world technological innovations can and will continue to increase at an exponential rate. In contrast, China has aggressively subsidized its EV and clean energy sectors, building a dominant position in global battery production, EV sales, and renewable energy infrastructure.

China’s strategic investments have created a vertically integrated supply chain for batteries and clean tech, giving it an outsized influence over global markets. If the U.S. cuts support for clean energy industries, it risks falling further behind in sectors critical to economic and national security. American companies would face higher costs, slower adoption rates, and greater dependence on foreign components—especially Chinese-made batteries and solar panels. As China continues to scale up its clean energy capacity and export these technologies abroad, its geopolitical leverage will grow while the U.S. struggles to maintain energy independence and manufacturing leadership.

Moreover, removing these incentives sends a message to global investors that the U.S. will remain technologically stagnant for the forseeable future, which may deter investment in American startups and infrastructure. It could also result in fewer jobs and less competitive resilience in the face of increasing economic rivavlry. As countries around the world race to develop new and innovative technologies, our economy will find it increasingly difficult to compete against European and Chinese industry. This protectionists policies are in truth a gift to China. China’s approach appears to be more stable than an American model that is vulnerable to political reversals. In the long run, this policy shift will erode U.S. influence on the global stage, opening the door for America’s rivals to supplant US leadership.