US President Joe Biden. Picture: REUTERS/EVELYN HOCKSTEIN
US President Joe Biden. Picture: REUTERS/EVELYN HOCKSTEIN

President Joe Biden plans to call for half of all vehicles sold in the US to be capable of emissions-free driving by the end of the decade, an ambitious goal that carmakers say can only be achieved with bigger government investment in charging stations and other infrastructure.

Biden will be joined at the White House later on Thursday by representatives of Detroit carmakers and the United Automobile Workers (UAW) union as he unveils an executive order establishing the goal for half of all cars sold to be battery-electric, plug-in hybrid or fuel cell-powered by 2030, according to senior administration officials and a White House fact sheet.

Tesla  CEO Elon Musk said on Twitter the electric carmaker is not on the guest list for Thursday’s event.

“These new actions — paired with the investments in the president’s Build Back Better Agenda — will strengthen American leadership in clean cars and trucks by accelerating innovation and manufacturing in the auto sector, bolstering the auto sector domestic supply chain, and growing auto jobs with good pay and benefits,” the White House said in a statement.

Biden will also announce his administration is crafting greenhouse gas-reduction standards and fuel economy requirements for vehicles, including medium-duty and heavy-duty trucks, according to the White House.

The mandates are a centrepiece of Biden’s climate plans and mark his administration’s first major effort to use regulation to stem planet-warming greenhouse gases. Federal agencies are developing additional rules targeting methane emissions from oil wells and carbon dioxide releases from power plants, after the Trump administration relaxed requirements.

Carmakers say they are counting on the government’s help to meet the new vehicle goals, even as some environmentalists said they were not tough enough to confront ecological distress in the form of droughts, forest fires and melting arctic ice. The transportation industry accounts for the largest share of US greenhouse gas emissions, according to data from the Environmental Protection Agency (EPA).

‘A dramatic shift’

“This represents a dramatic shift from the US market today that can be achieved only with the timely deployment of the full suite of electrification policies committed to by the administration,” Ford Motor, General Motors (GM) and Stellantis said in a joint statement. “Our recent product, technology, and investment announcements highlight our collective commitment to be leaders in the US transition to electric vehicles.”

UAW president Ray Curry said in a statement released by the White House that the effort is needed to “build the vehicles of the future”. Electric vehicles represented only 2% of passenger-car sales in 2020, according to an analysis by BloombergNEF.

“We are falling behind China and Europe as manufacturers pour billions into growing their markets and expanding their manufacturing,” Curry said. “We need to make investments here in the US.”

American car manufacturers have announced plans to invest billions in producing carbon-neutral fleets. GM, for instance, has vowed to sell only zero-emissions models by 2035. Ford said it expects 40% of its global vehicle volume to be all-electric by 2030 and Stellantis has said it is targeting more than 70% of sales in Europe and over 40% in the US to be “low-emission vehicles” — meaning either electric or hybrid — by 2030.

Biden in the spring asked Congress for $15bn in spending to build a coast-to-coast network of 500,000 charging stations. He would get just half of that money in the bipartisan infrastructure package the Senate rolled out on Sunday.

Government data estimates there are about 41,000 charging stations now available to the public in the US.

“To get this done right, you are looking at between $20bn and $30bn over the next 10 years,” said Joe Britton, executive director of the Zero Emission Transportation Association, which has said 4.5-million chargers would be needed by the time the US transitions to all-electric vehicle sales.

The $7.5bn included in the Senate infrastructure bill is enough to pay for about 735,000 chargers, if they are a mix of 90% level 2 chargers, which use the same voltage as a household dryer, and 10% level 3 chargers, which can charge a car in 15-20 minutes but are considerably more expensive, Britton said.

More could be built if there is a federal cost-share with states, he added.

More support

The Alliance for Automotive Innovation, which represents carmakers, said in a statement that additional government support is needed to reduce greenhouse gas emissions “while maintaining a vital US auto manufacturing sector and the millions of jobs it supports”.

Some environmental groups, such as the Natural Resources Defense Council (NRDC), are optimistic the nation will “have the plugs we need to electrify our vehicles”.

“Private companies have already installed more than 100,000 public charging stations in the US and investor-owned utilities are investing $3bn to help deploy charging infrastructure for cars, trucks, and buses,” said Max Baumhefner, a senior attorney at the council. “With new federal investments and breakthroughs in battery technology, range anxiety should soon go the way of the horse-drawn carriage.”

The fuel economy and emissions requirements proposed by the US transportation department and EPA would strengthen mandates eased by the Trump administration — and, over time, mark a return to a more stringent path charted by former president Barack Obama in 2012.

The White House estimates that the standards, coupled with the vehicle sales goals, will put the country on track to cut emissions from new vehicles by 60% in 2030 compared with 2020.

Environmentalists’ doubts

Some environmentalists said the proposed rules would yield fewer actual reductions in planet-warming pollution than the Obama plan, especially in the near term, as the administration seeks to make up for lost time.

Biden’s proposal “delivers less carbon pollution reductions than the Obama-era standards and includes unfortunate loopholes that undercut progress”, said Simon Mui, deputy director for clean vehicles and fuels at the NRDC.

“But longer-term, the administration is right that at least half of all new vehicle sales must be electric by 2030,” Mui said. “EPA must now move expeditiously to put strong standards in place to ensure automakers deliver on that goal while also slashing pollution from gasoline and diesel vehicles. Anything less puts our health and climate at unnecessary risk.”

Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign, was sceptical the plan would achieve the necessary results.

“Today’s proposal relies on unenforceable voluntary commitments from unreliable carmakers to make up to 50% of their fleets electric by 2030,” Becker said. “These are the companies that tore up the agreement they made with President Obama to cut pollution, so why would anyone trust them now?”

Bloomberg News. More stories like this are available on bloomberg.com

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