【By Observer News, Qi Qian】On July 1st, the Trump administration's "Big and Beautiful" tax and spending reform bill passed through the Senate with Vance's "decisive vote," and was submitted to the House of Representatives for voting. According to a report by The New York Times on July 2nd, the Senate version of the "Big and Beautiful" bill will gradually eliminate tax incentives and subsidies for the U.S. clean energy industry by the end of 2027.
Subsequently, the American solar power and electric vehicle industries cried out, saying that if the bill is passed, these industries will suffer a "devastating" blow.
A representative of an American solar power manufacturer said that in recent years, the solar power industry has begun to recover under policy support, but the latest move by Congress would lead to factory closures and worker unemployment. He warned that the Senate's action is no less than "handing over the entire industry to China starting from 2027."
The report said that not only solar manufacturers, but also the entire U.S. clean energy industry faces a severe political struggle. Several American automotive industry representatives analyzed that electrification is an undeniable direction for the development of the automobile industry, and suppressing electric vehicles would only hand over leadership in this emerging technology field to others.
"Starting from 2027, China will control the entire solar power industry"
The New York Times reported that after the first term of the Trump administration imposed tariffs on imported solar panels, several companies launched or announced plans to build factories in the U.S., reviving this manufacturing sector that had nearly disappeared. During the Biden administration, the Inflation Reduction Act provided generous tax credits to the industry, further accelerating its recovery.
However, now that the "Big and Beautiful" bill has passed the Senate, tax incentives for clean energy will be gradually eliminated by the end of 2027. American solar power manufacturers are worried that this initial revival may come to a sudden halt, and the dominance in solar panel production may completely shift to China.
"This will lead to business closures and many people losing their jobs," said Mike Karl, executive director of the American Solar Manufacturing Alliance, representing 15 companies and 6,100 workers. "The entire industry will suffer a devastating blow."
Karl pointed out that canceling the incentives at this time will undermine the Trump administration's so-called strategy of "regaining manufacturing from China." Currently, China not only dominates solar panel production, but also controls the key technologies of electric vehicle batteries and other clean energy technologies. He said that such a step back would be a tragedy.
He said, "We have been telling senators that starting from 2027, the entire industry will be handed over to China."
July 1, the "Big and Beautiful" bill passed the Senate. Visual China
The report said that although modern solar technology originated in the United States in the 1950s, the industry's leadership shifted from Japan and Germany to China. Currently, China controls more than 70% of the global capacity for solar panels and their components and raw materials.
To revive the solar power and electric vehicle industries, the Biden administration introduced the Inflation Reduction Act, offering billions of dollars in tax incentives. It is known that the act originally set up dual incentives: all solar projects would receive basic tax credits, and projects using a certain proportion of domestically produced components could get an additional 10% discount.
Now, manufacturers are worried that the Senate version of the "Big and Beautiful" bill will gradually eliminate tax credits for solar and wind power projects. This version of the bill is planned to terminate the additional incentives by the end of 2027, and projects that start construction within one year after the bill takes effect will have a certain transition period.
Adam Tysanovich, CEO of Houston-based solar company Talon PV, said that the company plans to build two factories producing batteries needed for solar panels. However, if Congress ultimately cancels the tax incentives, it could endanger these projects. He said, "It would in some way destroy our business plan."
This plan has also caused controversy within the Republican Party. Some local Republican officials urged congressional leaders to retain tax incentive policies, as these policies helped attract solar manufacturing plants to their communities and create thousands of jobs.
Employees working at Qcells Company in Georgia
"As chairman, one of my top priorities is to maintain our status as a manufacturing hub in Georgia," wrote Jayven Jensen, chair of the Whitfield County Commission, in a letter to Senate Majority Leader John Thune. "The investment by Korean Hanwha Qcells in our county has provided thousands of high-quality job opportunities for hardworking families, thus supporting these goals."
Jensen asked Thune to "support an improved bill to promote the U.S. energy and manufacturing leadership, allowing the manufacturing resurgence in Whitfield County to continue." It is reported that Qcells invested $3 billion in building a factory in Georgia.
"Billions of dollars are in the pipeline, innovation is taking root, and tens of thousands of solar jobs across the country prove this," said Danny O'Brien, Qcells' chief of corporate affairs. If the policy regresses, "solar panels on rooftops will only come from China, which will threaten national security, hinder the energy supply of the AI competition, and impede the reindustrialization of key economic sectors."
American auto industry worries: who will buy American cars in the future
According to The New York Times, not only solar manufacturers, but the entire U.S. clean energy industry is facing a serious political struggle: although some Republicans support continuing subsidies, the conservative faction, fossil fuel interest groups, and Trump are pushing for a complete cut of clean energy incentives.
The report stated that President Trump once claimed his policies would revitalize the U.S. automobile manufacturing industry. However, industry experts point out that the Republicans' suppression of electric vehicles may backfire, handing over leadership in this emerging technology field to others.
China has already established a significant first-mover advantage in the electric vehicle and its battery, mineral supply chain fields. International Energy Agency data shows that Chinese automakers produced 70% of the world's electric vehicles in 2024, while U.S. automakers accounted for only 5%. According to SNE Research, a South Korean firm, Tesla, the only American automaker among the top ten globally, has been overtaken by BYD and Geely, while General Motors and Ford are marginal players.
The report points out that China's scale advantage is forming a virtuous cycle of technological R&D: more sales mean lower R&D costs per vehicle, better parts procurement prices, and the key to success in the automobile industry - scale effects. This means that the more electric vehicles Chinese companies produce, the harder it is for U.S. automakers to catch up.
Data shows that currently, one out of every five new cars is an electric vehicle, and the proportion continues to rise. This explains why U.S. automakers have been retreating in markets in Asia, Europe, and Latin America in recent years, as consumers in these regions are turning to Chinese brands' rich and affordable electric and hybrid models. Now, over 80% of General Motors and Ford's profits depend on the North American market, and analysts warn that if this continues, U.S. automakers' overseas sales will become negligible.
"The U.S. must decide whether to maintain a competitive automobile industry globally," emphasized Professor Greg Dotson of the University of Oregon School of Law. "Electrification is an undeniable direction for the industry."
It is known that the Senate version of the "Big and Beautiful" bill will cancel the maximum $7,500 tax credit for electric vehicle buyers, reclaim subsidies for fast chargers, and gradually eliminate subsidies for companies setting up battery factories and lithium mines.
Republicans argue that electric vehicle subsidies mainly benefit the wealthy and that the products are not as powerful as gasoline cars. White House spokesperson Kush Desai said that the Trump administration revitalized the auto industry through a combination of relaxed regulations and tariffs, rather than inefficient subsidies. However, according to statistics by Professor Jay Turner's team at Wellesley College, this will jeopardize $200 billion in domestic supply chain investments in the automobile industry.
Jodi Freeman, director of the Harvard Environmental Law Project, questioned, "It seems the government has no interest in industrial competitiveness. Who will buy American cars in the future?"
The report said that some manufacturing projects have already slowed down. Chinese battery company AESC has suspended its plant construction plans in South Carolina to support BMW, exacerbating the battery supply dilemma for U.S. automakers. Currently, over half of the global battery production comes from Contemporary Amperex Technology Co. Limited (CATL) and BYD, and China also controls the supply chains of refined graphite and lithium, key materials.
In addition, price differences remain a barrier to the development of the U.S. automobile industry. The price of American electric vehicles is still higher than that of gasoline cars, and the coverage of fast charging networks is insufficient. In contrast, due to intense competition and efficient manufacturing, the price of Chinese electric vehicles has already fallen below that of comparable gasoline cars.
However, almost all car industry executives believe that even in the United States, electric and hybrid vehicles will eventually replace gasoline-powered vehicles. Many car experts think that with technological advancements, the price of full electric vehicles will drop, and within a few years, they will be cheaper than gasoline cars.
According to data from the Auto Innovation Alliance, the sales of purely fossil fuel-powered cars have been declining for a decade, and in the first quarter of this year, they accounted for less than 74% of the U.S. market. The alliance's June report warned: "The U.S. must strengthen its electric vehicle manufacturing to maintain relevance in the global market. Electric vehicles are expected to dominate in the future."
Ford Motor Company production line. Ford Company Website
Ford continues to build factories in Tennessee and Michigan for the production of electric vehicles and batteries. In a report on the company's sustainability plan, Ford Chairman William C. Ford Jr. and CEO Jim Farley said that the company is "developing next-generation electric vehicles that are both profitable and accessible."
Farley revealed at a forum last week that Ford executives frequently visit China, test drive cars, and ship competitors to Detroit for study. He praised the quality of Chinese manufacturing, calling it "the most humbling thing I've ever seen in my life."
The report said that the tariff barriers of the Trump administration have kept Chinese cars out of the U.S. market, but Chinese automakers like BYD have already sold in Brazil, the UK, Mexico, and other countries. Protectionist policies may also foster complacency among U.S. automakers. They don't need to worry about competition, nor do they need to meet stricter fuel economy standards, thus lingering in the comfort zone of high-fuel-consumption pickup trucks and SUVs, delaying technological innovation.
"This is about national competitiveness," said Professor Michael Lenox from the University of Virginia. "How long can trade barriers protect the U.S. market?"
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