Fast and Furious: Will Biden’s $ 174 billion accelerate a global electric vehicle boom? | Automotive Industry News

U.S. auto industry sees President Joe Biden’s infrastructure package as accelerating a global shift to electric vehicles, with $ 174 billion on offer for charging stations, planned consumer discounts for state-made electric vehicles United and the commitment to electrify the government fleet.

The proposal, which requires congressional approval, is likely to be targeted by progressives as being too narrow in scope and by Republicans as unfairly using taxpayer funds to help the alternative energy sector while harming it. others, like the oil industry. Market researchers, oil energy advocates and other critics warn that this may not be enough to dent the sale of greenhouse gases in the United States anytime soon.

“The numbers tell the current story,” Michelle Krebs, executive analyst at Cox Automotive, who conducts market research for auto dealers. Electric vehicles made up just 2% of new car sales in 2020, while SUVs and vans made up around 70%. “However, we know there is interest in electric vehicles. Our consumer survey of upcoming electric pickup trucks has shown interest, especially among younger buyers. “

Biden’s plan allocates $ 174 billion to electric vehicles, including sales rebates and tax credits for consumers to buy American-made cars, in addition to industry incentives. The centerpiece of the plan released on Wednesday is to help build a nationwide network of half a million charging stations through grants to state and local governments and the private sector.

“Efforts that encourage larger-scale EV adoption, put in place the necessary infrastructure and facilitate consumer awareness are critical parts of expanding the EV market,” said John Bozzella, president and chief executive officer. from the leadership of the Alliance for Automotive Innovation, a trade association representing major automobile manufacturers such as Ford Motor Co., General Motors Co., Stellantis NV, Honda Motor Co. and Toyota Motor Corp.

Installing charging stations nationwide is something industry and environmental groups see as key to increasing the adoption of electric vehicles by consumers worried about being stranded on a long road trip. electric.

“Seeing chargers everywhere will make consumers feel more comfortable buying electric vehicles,” Katherine Garcia, deputy director of the Sierra Club’s Clean Transportation for All program, said in an interview.

A Tesla electric vehicle charging station outside one of the company’s showrooms in Beijing, China [File: Qilai Shen/Bloomberg]

The 500,000 charging stations are “of critical importance,” said Genevieve Cullen, president of the Electric Drive Transportation Association, which represents companies that stand to benefit from the move, such as GM, utility CenterPoint Energy Inc. and the EVgo Services LLC electric vehicle charging network. “This is the right start.”

The plan to wean American motorists off gasoline-powered cars is part of a larger $ 2.25 trillion infrastructure plan that also calls for massive spending to meet White House climate goals – such as net zero emissions in the United States by 2050. In stark contrast to former President Donald Trump, who rolled back fuel economy requirements put in place by his predecessor and called for an end to a tax credit. Key consumption tax for electric vehicles, considered to help launch the industry.

“ Green tidal wave ”

“The combination of a Biden administration and a Blue Senate paves the way for a green tidal wave in the United States, with electric vehicles as the centerpiece,” said Dan Ives, senior research analyst at shares at Wedbush Securities. Wednesday. “For the electric vehicle industry, the streets have been waiting for this day since Biden’s election.”

Shares of EV makers can come to life thanks to Biden’s plan. EV stocks rallied sharply last year, partly in anticipation of more favorable sector policies after the election, but intense investor enthusiasm had started to show signs of strain this year, as sentiment towards Risky, multiple-multiples stocks deteriorated amid rising Treasury yields.

EV shares gained in trading on Thursday. Tesla Inc. grew by more than 3% while small businesses that typically take Tesla inspiration as well, along with Workhorse Group Inc., Lordstown Motors Corp., Nikola Corp., Nio Inc., XPeng Inc. and Fisker Inc. all higher.

Some critics of Biden’s plan have questioned whether the reach would even come close to what’s needed to move consumers away from gasoline vehicles.

A Tesla Model S electric vehicle outside a dealership at the Easton Town Center Mall in Columbus, Ohio, United States [File: Luke Sharrett/Bloomberg]

The 500,000 charging stations “wouldn’t even be 50% of what’s needed in California alone,” said Tom Pyle, former Trump adviser and chairman of the American Energy Alliance, a free market advocacy group . “The idea that it would be built in the United States with jobs paid by unions is also a fantasy when you consider that the entire supply chain is based in China.”

“It’s a pipe dream built on a foundation of lies,” Pyle said.

Biden also called for the electrification of the entire federal government fleet of more than 600,000 vehicles – including the U.S. Postal Service, which recently sparked contempt among environmentalists and Democratic lawmakers for selecting the manufacturer of military trucks and d emergency Oshkosh Corp. for part amounting to $ 6 billion. contract for over 100,000 mail delivery vans through Workhorse Group.

United States vs. China

“It forces the US Postal Service into the game,” said Scott Sklar, director of sustainable energy at the Institute for Environmental and Energy Management at George Washington University. “The US government is a huge customer, which could propel the US electric vehicle industry into a world leadership position against China.”

Congress is expected in the coming months to put its own flowers on the final package – which House Speaker Nancy Pelosi has said she wants to see completed by July 4.

Among the likely candidates for inclusion is a $ 454 billion plan to get gasoline vehicles off the road by 2040, a move championed by Senate Majority Leader Chuck Schumer, as well. as the expansion of an existing consumer tax credit of $ 7,500 for the purchase of electric vehicles. .

Senator Debbie Stabenow and Representative Dan Kildee, both Democrats from Michigan, are working with the White House and Democratic leaders on a plan to remove an existing cap of 200,000 vehicles per manufacturer on the tax credit. Possible credit adjustments include making it repayable and better targeting it to middle- and low-income motorists.

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