President Donald Trump has wasted no time in upending his predecessor’s policies––from rescinding funding for EV charging infrastructure and proposing a slew of tariffs to initiating steps to revoke what he falsely calls the previous administration’s “EV mandate.”
The moves have brought uncertainty and disruption to the US automotive industry at a time when leaders are navigating the costly transition to electric vehicles.
Amid the chaos, medium-duty EV manufacturer Harbinger Motors aims to offer its customers a bit of certainty. The startup recently unveiled what it’s calling the “IRA Risk-Free Guarantee,” a program that promises price stability to customers if the commercial clean vehicle tax credit in the Inflation Reduction Act is rescinded. The 45W credit enables businesses to claim a credit of up to $40,000 on qualifying commercial vehicles.
Harbinger’s Class 5 stripped chassis model with a 140 kilowatt-hour battery capacity, for example, currently sells for $103,200.
“Buyers of this model will receive an IRA Risk-Free Guarantee credit of $12,900 at the time of purchase, bringing initial cost down to $90,300,” per a news release. “This matches the typical selling price of the equivalent Freightliner MT-45 diesel medium-duty stripped chassis, in addition to the Harbinger electric chassis offering enormous fuel and maintenance cost savings.”
If the tax credit remains in effect as of next January, the customer would owe a second payment to Harbinger equal to the discount’s value. If the provision goes away, Harbinger would waive the second payment.
Tech Brew recently spoke with John Harris, Harbinger’s CEO and co-founder, about the company’s decision to offer this guarantee and the ongoing federal policy changes.
This conversation has been edited for length and clarity.
How big a difference did the 45W credit make for your business, your customers, and your ability to offer your products at price parity with diesel?
For us, the IRA is helpful not because it’s such a significant subsidy. We view it as kind of a time shift. The cost curve for all of these big OEMs, they’re not secretive about it, they keep announcing these price increases. And we’re basically looking and saying, we are six months away from our selling price and their selling price converging with no incentives at all. And the IRA, keep in mind, is 30%. So the total amount of IRA incentive, we don’t need that to get there. And this program that we just recently announced is basically designed to say, ‘Hey, that last 15%—we’re backstopping that for you.’
What is your outlook on the future of the IRA?
At least at this moment, Congress is still the party that writes the laws. There’s a lot of appetite in the administration to get rid of it, but that isn’t where the choice is made. I think in a different environment with a more traditional majority…then it gets pretty vulnerable.
But it kind of feels like we’ve moved into a phase in the country where we’re going to have a five-seat majority in either direction, and it’s never going to be wider than that again…If you roll up Michigan, Ohio, Wisconsin, Tennessee, the big auto-producing states, you’re talking 50 or 60 seats. And all of those seats swung to the right in the last election. That’s what delivered the change that we have today.
But the result is, now you have a ton of these Republican congressmen representing districts that are entirely driven by automotive production. We’re talking hundreds of thousands of jobs. In Michigan, in particular, it’s the majority of that economy. And on the other hand, you’ve got the Trump administration attacking EV mandates––but there’s no mandate in the IRA. There’s not one line in that bill that says you have to make EVs or you have to reduce emissions. It’s purely carrot, with no stick.
And so the question is, can you convince a bunch of elected members from districts entirely dependent on automotive manufacturing to remove the biggest automotive manufacturing subsidy in the history of the United States? I just don’t see it.
What do you wish policymakers in DC understood about the impact of the IRA?
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If we look at automotive manufacturing in the US, it has become the weakest automotive manufacturing in the world. To the point where the US is no longer the best at making [internal combustion engine] vehicles, and the US is not the best at making EVs, either. And US automotive is stuck in the middle of this transition.
So if they remove this piece of legislation, they’re doing it at the worst possible time, and it will likely be the death of US automotive manufacturing as a meaningful global source. Because you’ve got companies in Germany that basically never transitioned. They said, ‘We’re not going to go do EVs; to hell with you.’ And you’ve got companies in Asia…that have gone full speed on electric manufacturing…So you’ve got people who went hard into electrification, and they’re running circles around the rest of the world, and you’ve got people who did no electrification and in a non-electrification world, they’re gonna run circles around everyone else.
And then you have the US Big Three––and they’re sort of transitioned, but they’re not far enough along to be competitive. But they’re $100 billion in. So if you pull the rug out from under them over here, then the German OEMs are going to crush them on combustion vehicles. So the problem is, we’ve taken historically the biggest driver of the US economy, automotive manufacturing, and we’ve put it on this downward roller coaster, and said, ‘You’re going to pick up as much speed as you can, because we’re coming to this jump.’ And we’re at the very bottom of the hill, and the administration is like, ‘You know what? Let’s just take the ramp out, see what happens.’
It isn’t a hard thing to forecast. We’re at the bottom of the hill and they’re going as fast as they can. And if you pull the rug out from under US manufacturing, it’s just going to crash into a wall.
But it’s not like pulling that away is going to restore competitiveness in ICE vehicles. Because if that’s something we’re going to be good at, they wouldn’t have spent the last five years putting $100 billion into EVs. I just don’t think the administration understands that we’re not like 10% of the way into transition. We’re like 80% of the way into the transition, and the Chinese are 150% of the way into the transition. So this is not a train that they can stop and turn around. And that’s what we’re hearing from the Big Three.
How do the trade policy changes affect your business and your ability to deliver this guarantee to your customers?
I don’t really have an issue with any of the specific tariff actions. Tariffs are not an economically efficient tool, but they are important policy tools. So I’m generally in agreement that if we want to get a certain sort of manufacturing to happen, that’s one of the tools we should have to use.
The biggest thing we’re seeing is that, we have a tariff, and then it’s gone, and then we have a different tariff, and it’s gone, and then we have a different tariff, and then it’s gone. We have a lot of money teed up to invest in the US in manufacturing. And we had money teed up to pull a lot of content out of China to move it into North America. We have a lot of these things that we’re sort of ready to do, and now we’re just saying, ‘Well, let’s wait a minute and see’.
This tariff action is massively reducing investment by US manufacturing companies in US manufacturing, because no one knows how to plan when there is no plan. Any of the tariffs that have been announced are fine…But because it’s changing like every 12 hours, no one knows which way to lay out their supply chain. That is the biggest negative for the industry, and I think that’s going to have a real impact on a lot of US jobs if we keep up with this current pace.