Will the Biden administration help push electric vehicles forward?
Are automakers happy that Joe Biden is going to be our next president? Well, it’s complicated.
Above: Biden stands in front of a Chevy Bolt EV (Source: Joe Biden)
From the auto industry’s perspective, the difference between the two candidates couldn’t have been simpler: Biden will work to accelerate the transition to electric vehicles, while Trump would have continued to try to hold the tech tide back.
The key word here is “try.” Many auto industry execs would love to see the whole electrification issue disappear, and continue merrily selling high-profit gas-guzzlers until the golf course beckons. However, they realize that this isn’t going to happen. The tech genie isn’t going back in the bottle, and America’s global rivals are moving ahead.
What automakers want from Washington is some semblance of stability: consistent regulations that allow them to make long-term plans. Furthermore, they understand that they’re going to have to electrify whether they want to or not, and they’d prefer to see the government shoulder part of the investment required, which is much more likely to happen under a blue administration.
So, on balance, it’s safe to say that the men and one woman in the corner offices will be happy enough to see Joe Biden in the White House. GM’s Mary Barra acknowledged the new, pro-EV mood in her congratulation message: “We look forward to working with the new administration and incoming Congress on policies that support our customers, dealers and employees, help strengthen our manufacturing presence in the United States and advance our vision of an all-electric, zero-emissions future.” (Weathervane GM had enthusiastically embraced Trump’s gutting of federal fuel economy standards, but did an about-face when Biden won the election.)
Joe Biden has described himself as a “car guy,” and owns a 1967 Corvette (according to Michigan Advance’s Rick Haglund, he and Secretary of State Colin Powell once had a drag race). He’s said he’ll be happy to drive an electric ‘Vette whenever GM develops one.
President Biden’s ability to clean up our nation’s transportation and energy systems will be constrained by political realities, as he understands perfectly well. Candidate Biden released a detailed environmental plan that included several pro-EV measures. The President’s plan will probably consist mostly of carrots (tax breaks and government investment), which stand a good chance of earning bipartisan support, rather than sticks, such as a carbon tax, or the sort of emissions-based tax on new vehicle sales that has proven effective in Norway.
Our new president will almost certainly reinstate the more stringent federal fuel economy standards that Trump watered down, and reaffirm California’s right to set its own standards. In fact, it would make even more sense to make those regulations, which 15 states already follow, the new national standard. The auto industry, which never liked the idea of having two competing standards, might well support such a move, and Biden has hinted that that’s exactly what he plans to do, setting federal fuel economy standards with the goal of eventually making 100 percent of new light- and medium-duty vehicles zero-emission. However (as Mr. Trump’s team learned, to their dismay), changing EPA regulations is a long process, involving reams of reports, months of meetings and public comment periods, and likely legal challenges, so it may take a while to see any clear progress on this front.
There are several measures that Joe will probably take right away by way of executive actions, including moving the federal government’s vehicle fleet toward 100 percent zero-emission vehicles. He has proposed to devote $400 billion to electromobility, including battery research and infrastructure investment. Biden’s “Year One Legislative Agenda” includes working with governors and mayors to deploy over 500,000 new public charging stations by the end of 2030.
President Biden is also likely to push to strengthen the existing system of federal tax credits for EV purchases, targeting it toward middle-class consumers while prioritizing vehicles made in America. Actually, the best way forward would be to replace the tax credit (which tends to benefit only high-income taxpayers) with a “cash on the hood” rebate, with a substantial chunk reserved for dealership sales staff.
Biden has also proposed a new “cash-for-clunkers” program. Let’s hope that this is truly focused on getting people to buy EVs, unlike the 2009 boondoggle, which ended up paying people to trade in their SUVs for new SUVs with slightly better gas mileage.
It won’t be all blue roses for the auto industry. Biden’s plan to undo part of Trump’s cuts to the corporate income tax rate, and his promise to strengthen the bargaining power of labor unions, will probably be less than popular with Detroit decision-makers.
Biden’s pro-EV plans will surely face substantial opposition from across the aisle (and from oil-industry-oriented lawmakers in both parties). However, as Car and Driver notes in a recent article, there’s one very good reason for Republicans to work with Biden to promote EVs, and it’s spelled J-O-B-S. For years, the fossil fuel crowd has pushed a false narrative that the transition to clean energy would be a disaster for workers. It’s true that, in some industries, a lot of jobs are going away (and it’s imperative that the new administration’s plans include provisions to support these workers by protecting their pensions and offering opportunities for retraining). However, the renewable energy and electromobility sectors are booming, and generating both blue- and white-collar positions all around the country.
There are plenty of statistics to document the fading of fossil fuels and the rising tide of clean energy employment. Here’s a telling anecdote to put a human face on the shift. In 2019, GM’s plant in Lordstown, Ohio, the former production site of the Chevy Cruze, shut down (for reasons having nothing to do with climate change or environmental regulations), idling some 5,000 workers. GM sold the plant to startup Lordstown Motors, which is building an electric pickup truck. The new company expects to have 1,500 employees by the end of 2021, and GM and LG Chem have announced plans to invest $2 billion in a battery plant in the area, which some are now calling Voltage Valley.
This is just one example of how the EV boom is creating new, high-quality jobs, many of them in red states such as Ohio. Plug In America Policy Director Katherine Stainken pointed out to Car and Driver that there is plenty of electric activity going on in red states, including Tennessee, where Nissan, VW and Cadillac are building EVs; Texas, where Tesla is building a plant to build the Cybertruck; and Georgia, where SK Innovation is building two major battery plants. “There’s a lot of new manufacturing happening around the United States for electric vehicles, and we hope that will resonate with some of the Republican senators,” Stainken said.