U.S. Automakers Pledge Huge Increase in Electric Vehicles

Declaring the U.S. must “move fast” to win the world’s carmaking future, President Joe Biden on Thursday announced a commitment from the auto industry to produce electric vehicles for as much as half of U.S. sales by the end of the decade.

Biden also wants automakers to raise gas mileage and cut tailpipe pollution between now and model year 2026. That would mark a significant step toward meeting his pledge to cut emissions and battle climate change as he pushes a history-making shift in the U.S. from internal combustion engines to battery-powered vehicles.

He urged that the components needed to make that sweeping change — from batteries to semiconductors — be made in the United States, too, aiming for both industry and union support for the environmental effort, with the promise of new jobs and billions in federal electric vehicle investments.

Pointing to electric vehicles parked on the White House South Lawn, the president declared them a “vision of the future that is now beginning to happen.”

“The question is whether we lead or fall behind in the race for the future,” he said, “Folks, the rest of the world is moving ahead. We have to catch up.”

Earlier Thursday, the administration announced there would be new mileage and anti-pollution standards from the Environmental Protection Agency and Transportation Department, part of Biden’s goal to cut U.S. greenhouse gas emissions in half by 2030. It said the auto industry had agreed to a target that 40% to 50% of new vehicle sales be electric by 2030.

Both the regulatory standards and the automakers’ voluntary target were included in an executive order that Biden signed as a gathering of auto industry leaders and lawmakers applauded.

The standards, which must go through the regulatory process, would reverse fuel economy and anti-pollution rollbacks done under President Donald Trump. At that time, the mileage increases were reduced to 1.5% annually through model year 2026.

The new standards would cut greenhouse gas emissions and raise fuel economy by 10% over the Trump rules in car model year 2023. They would get 5% stronger in each model year through 2026, according to an EPA statement. That’s about a 25% increase over four years.

The EPA said that by 2026, the proposed standards would be the toughest greenhouse emissions rules in U.S. history.

Still, it remains to be seen how quickly consumers will be willing to embrace higher-mileage, lower-emission vehicles over less fuel-efficient SUVs, currently the industry’s top sellers. The 2030 EV targets ultimately are nonbinding, and the industry stresses that billions of dollars in electric-vehicle investments in legislation pending in Congress will be vital to meeting those goals.

Only 2.2% of new vehicle sales were fully electric vehicles through June, according to Edmunds.com estimates. That’s up from 1.4% at the same time last year.

Transportation is the single biggest U.S. contributor to climate change.

The deal with automakers defines electric vehicles as plug-in hybrids, fully electric vehicles and those powered by hydrogen fuel cells.

Several automakers already have announced electric vehicle sales goals similar to those in the deal with the government. Last week Ford’s CEO said his company expects 40% of its global sales to be fully electric by 2030.

General Motors has said it aspires to sell only electric passenger vehicles by 2035. Stellantis, formerly Fiat Chrysler, also pledged over 40% electrified vehicles by 2030.

General Motors, Stellantis and Ford said in a joint statement that their recent electric-vehicle commitments show they want to lead the U.S. in the transition from combustion vehicles.

They said such a “dramatic shift” from the U.S. market today can only happen with policies that include incentives for electric vehicle purchases, adequate government funding for charging stations and money to expand electric vehicle manufacturing and the parts supply chain.

The United Auto Workers union, which has voiced concerns about being too hasty with an EV transition because of the potential impact on industry jobs, did not commit to endorsing the 40% to 50% EV target. But UAW said it stands behind the president to “support his ambition not just to grow electric vehicles but also our capacity to produce them domestically with good wages and benefits.”

Biden on Thursday repeatedly extolled the virtues of American union workers and said that the challenges of climate change could present an opportunity for “good paying union jobs.”

Under a shift from internal combustion to electric power, jobs that now involve making pistons, fuel injectors and mufflers will be supplanted by the assembly of lithium-ion battery packs, electric motors and heavy-duty wiring harnesses.

Many of those components are now built overseas, including in China. Biden has made the development of a U.S. electric vehicle supply chain a key part of his plan to create more auto industry jobs.

In a bipartisan infrastructure bill awaiting Senate passage, there is $7.5 billion for grants to build charging stations, about half of what Biden originally proposed. He wanted $15 billion for 500,000 stations, plus money for tax credits and rebates to entice people into buying electric vehicles.