President Biden’s ZEV goal signals industry’s direction


WASHINGTON — When President Joe Biden set a nonbinding target last August for half of all new vehicles sold in the U.S. to be zero emission by 2030, major automakers backed the goal with a caveat: They can’t do it alone.

While automakers including Ford Motor Co., General Motors and Stellantis — whose executives stood beside the president outside the White House for the announcement — are going along with, or even aspiring to exceed, the president’s vision, they’ve also warned that meeting the aggressive goal will require more support.

“The auto industry has stepped up. … But all levels of government will need to do their part for this challenge to succeed,” John Bozzella, CEO of the Alliance for Automotive Innovation, said last year in response to the ZEV goal, which encompasses battery-electric, fuel cell and plug-in hybrid vehicles.

That means efforts from the Biden administration and policymakers to put forth measures that can foster greater consumer adoption of those vehicles, such as purchase incentives, charging infrastructure, R&D investments and incentives to boost domestic EV manufacturing and supply chains.

The future of Biden’s Build Back Better agenda — a centerpiece of his economic and climate plans that included more funding for EVs that could help prop up the sales goal — remains unclear after facing opposition from key swing vote Sen. Joe Manchin, a Democrat from coal-producing West Virginia.

A series of issues ranging from Russia’s deadly invasion of Ukraine to soaring inflation, gun violence, the debate over abortion rights and lingering effects of the COVID-19 pandemic also have hampered further congressional action on the climate agenda.

To be sure, Biden’s ZEV goal is just one piece of a larger strategy by the president and his administration to fulfill campaign promises to address climate change, reduce dependence on foreign-sourced fossil fuels and transition the U.S. to a clean-energy future, industry experts say.

“While a goal is not a mandate — it’s not a guarantee — it does send the right signal to investors, to other policymakers, that the objective and the goals and the policies of the federal government are going to aim to accelerate the deployment of EVs,” said Nick Nigro, founder of EV research group Atlas Public Policy.

“To that end,” he continued, “it’s an important signal, and the data show that it’s working in that we’re seeing considerable new investments in manufacturing and deploying EVs since that goal was announced.”

Biden also wants the U.S. to achieve at least a 50 percent drop in greenhouse gas emissions below 2005 levels by 2030 — an effort that supports his goal of having a carbon pollution-free power sector by 2035 and net-zero emissions by 2050.

Under the Paris climate agreement — which the U.S. rejoined under Biden — countries also are tasked with pursuing actions, such as reducing emissions, to limit the rise of global average temperatures to 1.5 degrees Celsius.

To do so, the U.S. says the global market share of ZEVs also “must reach at least 50 percent of new light-duty vehicle sales by 2030,” according to a White House fact sheet released in June.

The transportation sector is the largest source of carbon emissions in the U.S. But with the ZEV goal and other regulatory actions, the administration said the strategy can greatly slash those emissions and help accelerate the industry’s transformation to electrification.

“Climate and other environmental issues are at the core of trying to accelerate the deployment of EVs, and reducing emissions is certainly a pillar of the president’s policy,” Nigro said. “As equally strong a pillar, at this point, is economic opportunity of the U.S. regaining that leadership position in the deployment and the manufacturing and designing of these vehicles.”

Still, other countries — most notably, China — are ahead of the U.S. in promoting EV deployment and infrastructure as well as the sourcing of key minerals for lithium ion batteries.

The $1 trillion infrastructure law signed by the president in November includes $7.5 billion to help build 500,000 EV charging stations across the U.S. by 2030 and $65 billion for upgrades to the nation’s electric grid.

That pales in comparison to Biden’s initial framework unveiled last March, which called for $174 billion to boost EVs, including a reported $100 billion in consumer rebates and $15 billion to build the nation’s charging network.

“We can have any numerical goal that a policymaker wants to put out there — whether it’s 50 percent, 100 percent or somewhere in between,” said Levi McAllister, head of the EV and energy commodity trading and compliance working groups at law firm Morgan Lewis.

“But if consumers who actually purchase and drive the cars don’t feel comfortable that they have a way to reliably … charge them, then it doesn’t really matter what your goal is,” he said. “You’re going to struggle to beat it.”

By 2030, the auto industry will have invested half a trillion dollars in electrification, according to the Alliance for Automotive Innovation, which represents many of the automakers aiming for between 40 and 50 percent annual U.S. sales volume of ZEVs in that time frame.

“Look at how much money these companies are putting into it,” said Brett Smith, director of technology at the Center for Automotive Research in Ann Arbor, Mich. “They want this to work because if it doesn’t, they’re in a lot of trouble for a lot of reasons.”

Automakers also realize they can’t force it to work, said Smith, noting the need for great products that consumers want to buy, cash-on-the-hood incentives and reliable EV charging infrastructure. “It’s not up to them as to whether this succeeds.”

EVs, while on the rise, still make up only a sliver of the new-vehicle market in the U.S. Between January and April, new EV registrations rose 53 percent, according to data provided by Experian to the Automotive News Research & Data Center. EV share of the light-vehicle market increased to 4.4 percent from 2.3 percent in the year-earlier period.
Last month, the CEOs of GM, Ford, Stellantis and Toyota jointly urged congressional leaders to lift the 200,000-vehicle-per-automaker cap on the current $7,500 tax credit for consumers buying eligible EVs. GM and Tesla have reached the threshold, and Toyota is expecteted to reach the EV sales limit this year.

“Congress still has work to do,” Nigro said. “But the incentives on vehicles that are currently penalizing the early leaders in EVs need to be reformed if we’re going to really keep on the trajectory we’re on now, and that’s only going to come with an act of Congress.”

Products You May Like

Articles You May Like

Junkyard Rescue T-37 Pontiac!—Roadkill Preview Ep. 98
Parking Lot Engine Swap: More Power for the Draguar!—Roadkill Preview Episode 96
Behind the Scenes at HOT ROD Magazine! HOT ROD Unlimited Episode 30
First Test: 2011 Saab 9-5

Leave a Reply

Your email address will not be published. Required fields are marked *