To fully cover this topic would take 100's of thousands of words.
The only question you posed is above and it is about a future where EV's do not get a huge tax credit.
The basic answer is two-fold: not every ICE maker will go bankrupt, only the most bloated and inefficient. Any projection of 20% market share by 2030 would be in a world
with subsidies to legacy makers. Ark Invest is projecting 25% market share by 2026! That projection must be understood to be in a scenario with likely subsidies. Tesla could have well over 50% by 2030 and the more efficient makers who don't go bankrupt can pick up the slack. It might be Rivian too, we don't know yet. One thing is for certain: Cars will be a much better value and will be built with a much lower carbon footprint in a future world arrived at without subsidies! Subsidies as large as those being proposed pervert capitalism and its inherent efficiencies.
Secondly, I don't think many of the legacy makers will go broke much before 2026, even without this bill. Over the next 5 years they will crank out tens of millions of new ICE cars, many of which will be sold at a large loss near the end. These cars won't even be at their half-life by 2030. And that's without this bill, with it the results are much worse. The crime here is there will be a surplus of newer ICE cars no one will want, at least not at the cost to produce them. But they will sell for much below the cost to produce and be put into service anyway. It would be a terrible corruption of the efficiency capitalism is known for.
Here's what US auto sales look like between 1976 and 2020:
View attachment 742141
In a world without US EV subsidies, I expect new car sales to decline to 12 million/year for at least 3-4 years before rising EV production can reverse the trend.
The demand for new ICE cars will also drop off naturally (that's why the least efficient makers will go bankrupt). Newer cars last longer than old cars. They are better protected from corrosion and have more modern engines and transmissions that are built to higher tolerances. Also, looking through the decade we should see fewer cars totalled in accident, DUI is declining, tires are better than ever, the cars are more maneuverable and safer with more electronic interventions dropping the accident rate, the ratio of EV's is rapidly growing with less of them being taken out of the fleet due to blown transmissions, engines, etc. The US has been a laggard in BEV adoption and that will continue with the proposed subsidies but it would eventually reverse without subsidies so the US would get a slightly higher percentage of global EV production.
The answer to your question is that free-markets have a way of working through disruptions. Anyone claiming we couldn't get to work if legacy makers go bankrupt doesn't know what they are talking about. It's a red herring.
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