One Big, Beautiful Own-Goal

House Republicans just pulled an all-nighter to christen their 389-page behemoth, the “One Big, Beautiful Bill,” and the title alone tells you décor matters more than engineering. Buried inside the $4.9 trillion tax-cut party favor is a “sledgehammer approach,” as environmental groups put it, that would rip out nearly every clean-energy incentive enacted in 2022’s Inflation Reduction Act.

Here’s the short version. Since the IRA passed, private capital has stampeded into solar fields, battery plants and—deep breath—nuclear projects, many of them in red districts that suddenly discovered green money spends the same as any other shade. Now the House Ways and Means Committee has voted to zero out consumer credits for electric vehicles, rooftop solar, efficient heat pumps and even mundane things like insulation—effective, quite literally, at year’s end. Business credits survive a little longer, but without customers, supply chains start to look like a “Going Out of Business” sale.

Republicans insist they’re rescuing “working families from elitist subsidies.” Translation: a used-EV credit capped at $25,000 is apparently bourgeois excess, but a new Cadillac Escalade qualifies as freedom on wheels. Meanwhile, the bill keeps Trump-era corporate tax cuts humming along—because nothing says Main Street like a 15 percent effective rate for multinational manufacturers.

Humor aside, the market implications are real. Some firms have already learned to live without Uncle Sam’s tip jar. Tesla watched its own federal credit vanish in 2019, shrugged, and proceeded to open gigafactories on three continents. When competitors who still depend on rebate-driven demand suddenly lose their sugar rush, the subsidy-independent players look downright Herculean. Expect investors to treat them as safe havens, much the way coffee addicts migrate to the lone open café during a power outage.

And if the entire clean-tech sector sells off on repeal panic? Bargain hunters will remember 2024’s AI mini-crash: quality names got trampled alongside the hype, then roared back once everyone calmed down. A similar script could play out here, minus the generative-AI poetry.

There’s also the delicious irony of Republican districts getting caught in their own crossfire. Georgia, Texas and Tennessee have spent two years hosting groundbreakings for battery plants larger than some European principalities. Those factories were banking on consumer demand juiced by—wait for it—tax credits. Yanking the carrot now means the next ribbon-cutting ceremony may be in Ontario or Bavaria, where policymakers still believe in industrial strategy that lasts longer than a political news cycle.

Senate Republicans aren’t blind to the hypocrisy. Four of them—Murkowski, Tillis, Curtis and Moran—have already sent a sheepish letter asking leadership not to vaporize the investment credits entirely. The House, however, just framed those very credits as handouts for “elites.” Intra-party knife fight, meet double-elimination tournament bracket.

That leaves corporate America in an awkward position. Auto manufacturers spent the spring cheering lower emissions targets and screaming about tariffs, only to discover their lobbyists dozed off when the actual cash register was threatened. The powerhouse National Association of Manufacturers called the bill “vital.” Translation: “We like the part where our tax rate drops; good luck with that battery plant, pal.”

Cue the Koch-funded ad blitz claiming the choice is “simple: lower taxes or green fantasies.” Yet the Joint Committee on Taxation admits killing the credits covers barely one-tenth of the bill’s cost. When the math changes, just move the goalposts—and delete the provision allowing “transferability” of credits while you’re at it. Because if some plucky startup in Kansas can monetize a credit without Goldman Sachs, what’s America coming to?

Rhodium Group’s modelers warn emissions could be 35 percent higher by 2030 and 71 percent higher by 2035 if the rollbacks stick. Translation for coastal homeowners: buy taller stilts. The House majority responds that failing to extend Trump’s cuts would raise average taxes by 22 percent next year. Perhaps—but so will rebuilding beachfront property after the next Category 4 arrives ahead of schedule.

Ultimately, the market will adapt; it always does. Capital is cowardly but opportunistic, and there’s still money to be made electrifying everything that spins, drives or chills beer. The question is whether Congress wants those paychecks signed in dollars or yuan.

My hunch? The loudest repeal-and-replace evangelists will quietly load up on subsidy-free winners while the cameras roll elsewhere. I wouldn’t be surprised if Trump’s insiders are well aware of that and are already positioning themselves accordingly.