Ford is betting that a Trump or Harris victory won’t weaken Biden’s IRA

Ford Motor Co (F) the new roadmap for electric vehicle features long product delays and even cancellations. But he also shows he isn’t too worried that a potential Trump 2.0 administration would gut President Joe Biden’s flagship pro-EV legislation.

The Detroit-based automaker said Wednesday that it is looking to move some of its electric vehicle battery production out of Poland with partner LG Energy Solutions. Those batteries, which are used in Ford’s electric Mustang Mach-e, will instead be built in Holland, Michigan sometime next year and qualify for benefits created by Inflation Reduction Act from 2022 (IRA).

The IRA included a number of measures aimed at boosting the production and adoption of electric vehicles.

For many people, the most important of these benefits is the $7,500 tax credit for new electric vehicles. But that only applies to vehicles – and their batteries – that have one a certain percentage of sourced components in the US or a trading partner. The IRA also provides tax credits for battery production and essential mineral processing in the US

Ford said it was BlueOval Battery Park Michigan is on track to begin producing EV batteries in 2026, which will also qualify for IRA benefits, and its joint ventures in Kentucky and Tennessee aim to begin producing batteries in mid-to-late 2025. They will be used for F -150 Lightning pickups, E-Transit vans and an all-new commercial van announced Wednesday.

“An affordable electric vehicle starts with an affordable battery,” said Ford CEO Jim Farley. “If you’re not competitive on battery price, you’re not competitive.”

However, some EV advocates worry that the benefits of making those batteries and cheaper vehicles could be plucked if former President Donald Trump wins the November presidential election. In the past he has promised to freeze subsidies and IRA subsidies, remove rules limiting tailpipe emissions and recently played with the idea closing $7,500 EV tax credits.

Ford’s decision shows that automakers aren’t exactly worried that Trump could get the IRA overturned, RBC Capital (RY) analysts said in a note on Wednesday.

“We think Ford’s decision confirms something we’ve long argued — namely that repealing the IRA would be very difficult for any administration,” analyst Tom Narayan wrote Wednesday. “It also affirms the power of the IRA to absorb the high costs of batteries,” he added.

Repealing the IRA would require congressional support, which may be difficult to garner given who benefits from its provisions.

Red states and battleground states have received thousands of new jobs from the IRA’s clean energy investment boost. Ohio, the state that Trump’s running mate JD Vance represents in the Senate, has one the booming clean energy sector. It is also home to General Motors’ Ultium cell plant in Lordstown.

A hybrid hedge

Ford is also expanding its line of hybrid vehicles, which have been a lucrative business for companies such as Toyota Motorwhich has been slower to embrace the transition to all-electric cars. Although electric vehicle sales are growing, they are doing so at a slower pace than the industry had hoped consumers remain skeptical.

Ford has said it will scrap plans to develop three-row electric SUVs, which the automaker previously announced would be delayed two years to a 2027 launch date, in favor of hybrid models. It also aims to sell a hybrid version of its next generation F Series Super Duty Pickup trucks.

“We’re future-proofing this valuable franchise of all sizes with hybrid, electric and other electrified powertrain options, giving individual customers and businesses the choice based on how they use their trucks,” Farley said in a communicated.

The move looks like a change from Hyundai Motor (HYMTF); the firm’s chief financial officer said last month that the IRA is not expected to be scrapped by a Trump White House. But Hyundai still plans to review the possibility of building more hybrid vehicles to prepare for any changes to the IRA and its benefits for electric vehicles. The South Korean automaker’s hybrid sales rose 42 percent in the April-June quarter.

Although its vehicles don’t yet qualify for IRA benefits, Hyundai has accelerated plans for a new $7.59 billion plant in Ellabell, Ga., and aims to build a $5 billion EV battery plant in the county Bartow. Once operational, Hyundai expects to build 300,000 electric vehicles annually in the state.

“We’re moving forward because everyone knows how important it is, because so far we don’t qualify for federal tax credits,” Hyundai Motor (HYMTF) Americas CEO Jose Muñoz said Auto News in February.