EVs in Tennessee: Uncertainty abounds as Trump targets Biden-era electric vehicle funding

This story was originally published by Tennessee Lookout. 

Rural Tennessee communities and the state’s blossoming electric vehicle industry received a substantial boost from federal cash infusions under former President Joe Biden’s administration — some of which now face an uncertain future as President Donald Trump takes the reins.

Tennessee received a combined $10.3 billion from the 2022 Inflation Reduction Act (IRA) and the 2021 Bipartisan Infrastructure Law (BIL) toward a broad array of projects including safer roadways, a new state forest, historic property preservation, railroad improvements and energy efficiency grants to help businesses and farms save thousands of dollars through equipment upgrades or solar power installation. Many programs were allocated at the state or metropolitan area level and may fund multiple projects, according to data maintained by the Biden administration.

Trump’s first actions in office included issuing an executive order commanding federal agencies to “immediately pause the disbursement of funds” under the two measures sparking uncertainty about the plethora of infrastructure and clean energy projects they support.

The White House Office of Management and Budget issued a memo the next day clarifying that the pause applies only to funding for programs supporting electric vehicles and other clean energy items that run contrary to Trump’s policy priorities.

Another OMB memo sent out Monday ordered a pause on federal grants and loans, leading to mass confusion and spurring a coalition of nonprofits to file a federal lawsuit. The White House later said the order was not a “blanket pause,” but was directed at priorities that fall outside Trump’s agenda. A federal judge temporarily blocked part of the Trump administration’s federal grant and loan freeze on Tuesday, preventing the administration from holding back funds for awards that were already granted, at least through 5 p.m. Feb. 3.

Memphis Congressman Steve Cohen was the sole Tennessee representative to sign a Jan. 27 letter to the OMB alongside dozens of other members of Congress requesting an itemized list of programs, projects and activities put on hold due to Trump’s order to pause funding. The OMB memo issued after Trump’s order did not provide sufficient clarity on “what specific funds this Administration is withholding unconstitutionally,” according to the letter, which asks for immediate transparency on which programs are receiving money and which are frozen.

“This executive order is a source of great anxiety for communities and businesses across the country that use this funding to build new roads, fix bridges, replace lead pipes, expand broadband access, strengthen infrastructure against natural disasters, and much more,” the letter states. “Work is already underway on tens of thousands of projects in both the public and private sector, but their completion depends on these funds, which were already approved by Congress and enacted into law.”

Tennessee, and electric vehicle manufacturing hubs choosing to locate in the state, have benefited from a mix of loans, grants and tax credits designed to support the growth of the American electric vehicle and battery industry. Analysts have said those prongs are intended to work together to bolster both supply and demand for electric vehicles, and rollbacks breed uncertainty about the strength of the industry in Tennessee.

Representatives for Gov. Bill Lee and Congressman David Kustoff, who represents much of West Tennessee did not respond to questions about how funding pauses or rollbacks could impact related Tennessee projects.

It’s not yet clear how much funding could be impacted by Trump’s order. Biden’s administration obligated about 84% ($97 billion) of the clean energy grants created by the IRA before Trump took office in an effort to protect grants from Trump’s promised clawbacks. Other programs like energy efficiency or electric vehicle tax credits would require action from Congress to rescind.

“For the public, we’re in a really difficult spot here to understand what this executive order means in practice,” Adie Tomer, a senior fellow at Brookings Metro, told The Tennessee Lookout. Tomer focuses on transportation and infrastructure policy at the nonprofit, nonpartisan think tank based in Washington, D.C.

Trump’s executive orders reflect his administration’s priorities, Tomer said, but many will require legislative action to enact, and halting funding without Congressional support could result in legal challenges.

That leaves one big unknown, according to Tomer:

“Is the Trump administration willing to actually stop delivering on what Congress requires them to do and force the judicial branch to get involved?”

Electric Vehicle Charger Grant Dollars on Pause

One program does appear to be in limbo: the National Electric Vehicle Infrastructure Program, which earmarked billions of dollars for electric vehicle charger installation across the United States. 

NEVI allocated $88 million to Tennessee to fund charger installation over a five-year period. The state awarded $21 million to 10 applicants in January 2024 to install 30 new charging locations along major corridors. 

Tennessee Department of Transportation Community Relations Director Beth Emmons said the department is aware of Trump’s order. While TDOT has awarded federal funding for EV charging stations, the contracting process is not yet finished, she wrote in an email.

“The President’s Executive Order calls for a review of the processes, policies, and programs associated with this funding within the next 90 days. We are still working on contract provisions and believe the timing of any decision with this funding program will be known by the time we are ready to enter into any official contract,” Emmons wrote. “We welcome the review and are eager to support appropriate investments that provide transportation options to our residents and those traveling throughout Tennessee.”

An October report on electric transportation in the Southeast showed Tennessee ranked near the top of the list for anticipated jobs and investment, but despite seeing rapid growth in the number of publicly accessible vehicle chargers since 2023, the state falls behind in chargers per person. 

The challenges that make the EV charging business more difficult to navigate have spanned multiple presidencies, said Ryan McKinnon, a spokesperson for the Charge Ahead Partnership, a coalition of businesses pushing to expand the EV charging marketplace in the U.S.

“Private businesses all over Tennessee have invested millions of dollars to participate in the NEVI program. They entered into contracts, secured property, worked with grant writers and spent years preparing for their entry into the EV charging business, all in the good faith that the federal government would meet its end of the bargain,” McKinnon wrote in an email. “No one is happy with how long it has taken NEVI to get off the ground, but to suspend the program now only hurts the private businesses that will eventually be the backbone of the EV charging marketplace.”

Where the Rubber Meets the Road

In Tennessee’s electric vehicle market, tax credits and loans for manufacturers represent the bulk of IRA incentives for EV and battery production, Tomer said.

Tax credits can only be undone by an act of Congress, but questions remain about the impact to not-yet-finalized loans.

These low-cost loans have helped shore up some of Tennessee’s biggest manufacturing projects over the last several years, including Ford’s BlueOval City and the BlueOval SK battery plant in rural West Tennessee. The Loan Programs Office recently finalized a loan of up to $9.2 billion to BlueOval SK under the IRA to build three battery plants in Tennessee and Kentucky.

Ultium Cells has an active loan of $2.5 billion for three lithium-ion battery cell manufacturing plants, including one in Spring Hill. 

Other loans are still marked as “conditional,” including a $754.8 million loan to NOVONIX Limited for a Chattanooga plant that will manufacture graphite for EV batteries. 

“Any decision point that is conditional — meaning Trump staffers now have authority over, in this case, financing moving forward — absolutely will be under threat,” Tomer said.

NOVONIX did not respond to a request for comment.

Tomer also draws a distinction between rhetoric and reality. While the IRA and BIL have faced criticism and rollback attempts, “there’s a real bipartisan constituency behind these investments,” he said.

“It becomes a very different conversation when you actually have to look in your state and say, there are places that have been dealing with a level of economic distress and headwinds for decades, some of the smaller … rural areas of the state that suddenly are getting some economic momentum, it becomes a very different proposition to say we’re going to pull back on that,” Tomer said.

Tennessee Lookout is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com.