Trump's EV scepticism threatens $72.5b in South Korean investments

South Korean companies are reconsidering their US$54 billion (S$72.5 billion) investment blitz to build electric vehicle (EV) battery plants in the United States, over concerns that President-elect Donald Trump could undo tax credits for EVs.

SEOUL -

Some firms have slowed or hit the pause button on any ongoing construction of some plants because they are wary about reduced demand for EVs and what Trump would do during a second term in the White House, people familiar with the matter said, asking not to be identified due to the sensitivity of the issue.

Posco Future M, which makes cathodes for General Motors (GM), said in a filing in September that it is delaying the completion of its plant in Quebec, Canada, due to "local conditions".

Although companies have not taken any action yet, many are "anxious" about to what degree Trump would slash government incentives for the EV market, said Mr Kenny Kim, chief executive officer at SNE Research, a Seoul-based research firm that focuses on Korean battery makers.

Trump has long criticised President Joe Biden's efforts to subsidise EVs through his landmark energy Bill, the Inflation Reduction Act (IRA). The incoming administration is looking to slash fuel efficiency requirements and, according to a Reuters report in November, could eliminate the key US$7,500 consumer tax credit.