We have already seen what a Trump reign looks like for the domestic industry, following his election in 2016, which saw his own take on restoring the country’s automotive presence, in part by threatening automakers not to build factories anywhere other than the US and creating friction among some of the largest vehicle manufacturers in the world.
Now officially sworn in, Auto Futures looks at what a Biden Presidency means for the country and its turbulent automotive industry.
A key focus for the 46th U.S. President is, of course, a drastic change in the country’s environmental policy, explicitly labelling climate change as “an existential threat.” Ultimately, he wants to rejoin the Paris Climate Accord, after Trump’s decision to withdraw from the agreement, and cut greenhouse gases up to 28% by 2025, based on 2005 levels.
In addition to this, he is proposing a $1.7 trillion federal investment over the next 10 years in green technologies research, to help the US reach net zero emissions by 2050. This investment will of course affect the automotive industry, which is a significant contributor to global greenhouse gas emissions.
Many within the industry hope that a Biden Presidency will be enough to help the U.S. catch up with other regions around the world and help achieve the overall 2030 goals through clean energy and transport.
Supporting the EV Revolution
Biden’s plan includes a much more stringent fuel economy standard; something that was initially put in place by former President Barack Obama in 2012 before being removed during the Trump campaign.
The initial rule was that automakers had to reduce carbon dioxide emissions by 3.5% annually from 2017 to 2021 and 5% per year from 2022 to 2025. However, Trump lowered reductions to 1.5% year-over-year to 2026. In addition, he also removed California’s waiver to set the state’s own stricter zero-emissions standards which caused problems between automakers operating in the US.
Despite Trump’s actions saving some companies over $1 billion in annual compliance costs, it created a toxic environment for automakers within the country.
With a Biden Presidency, the automotive industry within the US looks to be shifting its focus back to the environmental goals on the world stage, with EVs spearheading this change. In fact, even Trump showed some support for EVs in recent debates.
With a promise that $400 billion will be invested into clean energy, including battery technology and general R&D, EVs should see a sharp increase due to getting more efficient, cheaper and, most importantly, more accessible due to governmental support.
With infrastructure playing a colossal role in EV adoption rates, Biden will help states build approximately half a million new charging stations by the end of 2030, an astonishing improvement over the country’s current offering of under 90,000 charging stations.
Getting Americans in EVs
Biden hopes that through this approach, the US can catch up with regions such as Europe, which is far ahead currently with much better support and EV offerings. To put this into context, Europe currently has over 200,000 charging stations, eclipsing the current number in the US.
Quite simply, the US needs to follow suit, introducing new incentives that will get consumers in EVs and catch up with other continents for both future environmental and business benefits.
Biden will introduce new tax credits, creating more attractively priced EVs through a new $7,500 subsidy for the first 200,000 vehicles sold by a manufacturer. Similar to countries like the UK and France, this will help support electrification during the transitional phrase, bridging the gap until we see the mass roll-out of EVs in the US.
Another difference to Europe is that the US needs more EV offerings, from both traditional automakers and new startups ready to shake up the market. Tesla has done a lot for EVs on the world stage, but more companies need to be assisted to create an exciting market for consumers.
That is not to say that there is a lack of exciting new automotive brands in the US; you have the likes of Rivian, Lucid Motors, Karma Automotive, Nikola, among others. The problem is that they were not being supported by policy changes, which has stagnated the adoption of these EVs.
This should all change with a Biden Presidency, with trade shares looking healthy again for these startups and highly-attractive benefits for battery makers such as LG Chem and Panasonic which dominate the global EV market. Many analysts believe that lithium and battery stocks hold the potential for impressive gains for investors once these policies are officially announced.
One thing is for certain, a Biden Presidency is favourable for all involved in the modern automotive industry. Experts predict that US EV sales will surpass four million by 2030, with hundreds of new models and billions in R&D investment.
Deloitte expects that by 2030 China will hold 49% of the global EV market, Europe will account for 27%, and the US will hold 14%. Despite still someway behind at this point, it shows that the region is going in the right direction. Looking beyond 2030, the Biden campaign could prove to be the key springboard to future transport opportunities for businesses and consumers within the US. There is a lot to do, but it’s a start.
Keyword: What a Joe Biden Presidency Means For The U.S. Automotive Industry