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US carmakers push for EV tax credits to be phased out

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Automakers are lobbying against Washington lawmakers ending popular electric-vehicle tax credits that President Donald Trump has railed against, pushing instead for a gradual phase-out over several years if he moves to cut them. 

General Motors Co. and Ford Motor Co. are among the carmakers and industry lobbying groups making pilgrimages to ask the Trump administration and Republican legislators to preserve some EV incentives in the Inflation Reduction Act passed under Joe Biden, according to people familiar with the effort who weren’t authorized to speak publicly on the matter.

Among the options being floated if the Trump administration moves to strike EV incentives is a three-year wind-down to allow more time for the companies to adjust their businesses, these people said.

It’s not immediately clear if Trump is receptive to the idea, or whether automakers can find enough votes among Republicans in Congress to keep EV incentives in place. But the industry is making the case that thousands of jobs now rely on electric vehicles, and that a disproportionate number of EV and battery plants are in Republican states such as Ohio, South Carolina, Georgia and Alabama, making what’s now sometimes referred to as the U.S. “Battery Belt.”

The effort shows how big auto companies are working to influence key policies beginning to take shape in Trump’s Washington that could deal a blow to their operations and bottom lines. Automakers have spent billions of dollars to build EV and battery manufacturing plants in the U.S., helped by IRA subsidies that support production and consumer demand for plug-in cars. Trump has directed his administration to consider eliminating policies that favor electric vehicles, which could put those investments at risk of being stranded should near-term federal support disappear. 

Carmakers also are looking to avert or mitigate the effects of new potential tariffs that at least one industry leader has warned would be devastating to U.S. carmakers. 

To preserve EV subsidies, carmakers are also stressing that a multiyear phase-out period would give them time to drive battery and EV costs down so they can reduce prices and sell electric vehicles without help from the federal government, the people said. Federal support also helps give domestic automakers a chance to build an American-made supply chain to better compete with China.

“We have the potential repeal of various IRA elements,” Ford Chief Executive Officer Jim Farley said Tuesday at an investor conference in New York. “We’ve already sunk capital. And many of those jobs will be at risk” if the IRA or large parts of it are repealed, he said.

Farley said he’ll meet with members of Congress this week, which he said will be his second trip to Washington in three weeks.

Tax credits

The IRA contained a 10-year extension of both consumer tax credits for EV buyers and subsidies that go directly to manufacturers for building batteries in the U.S.

Many automakers are asking to preserve as much of the IRA incentives as they can. That includes the so-called leasing loophole, which allows leased EVs to qualify for the full $7,500 tax credit that would otherwise be ineligible if purchased outright.

GM CEO Mary Barra recently met with Trump to discuss tariffs and other administrative policies that affect the auto industry. The company has pushed to apply the same sourcing standards to incentives toward leasing EVs that are currently applied to purchases, so that battery materials and production would have to be in the U.S. or come from certain trading partners, one of the people said. If GM gets its way, Asian and European automakers would have a tougher time leasing EVs.

The automakers’ campaigning for credits contrasts with Tesla Inc. CEO Elon Musk’s calls for EV subsidies to be eliminated. In the years since he’s said the federal incentives should be scrapped, Tesla cut prices of vehicles including the Model X in order to qualify. The company also promotes the tax-credit eligibility of various models on its order pages.

Any cuts or repeal of EV credits provided by the IRA would likely come in a reconciliation bill where Republicans will have to weigh the benefits of falling in line with Trump’s priorities against potential drawbacks for high-paying jobs in their states. About $167 billion has been invested to create 200,000 EV-related manufacturing jobs in 12 states, according to the American EV Jobs Alliance, an advocacy group. 

The GOP represents congressional districts with 19 of 25 major automaker battery and EV assembly plants in operation or under construction. Most of the remaining facilities in Democratic Party-represented districts are in states that supported Trump in the November election.

The concentration of EV facilities in Republican states has fueled hopes in the industry that IRA subsidies supporting battery production are more likely to survive than the consumer-facing tax credits.

Autos Drive America, which lobbies for foreign-owned carmakers, has said that preserving both the consumer credit for EVs and the manufacturing credits for domestic battery manufacturing are among its top legislative priorities for the year. Some carmakers have argued that eliminating the tax credits that bolster consumer demand will undermine the new EV and battery plants that are concentrated in Republican states.

Trump’s pledge to eliminate EV tax credits comes with a carrot for automakers: He wants to weaken Biden-era fuel efficiency rules that would effectively require half of all new car sales in 2032 to be battery-electric. Easing those rules would lessen the pressure on companies to sell more EVs.

That could in turn reduce the need for federal incentives and discounts to support EV sales, GM Chief Financial Officer Paul Jacobson said during an investor presentation on Tuesday.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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