Automakers push for federal help on cusp of 'transformative moment'
The leading industry advocate for automakers selling vehicles in the United States called Tuesday for policymakers to help the industry capitalize on what they frame as a pivotal moment in technological history.
The industry says it is on the precipice of a global explosion in automated and electrified vehicle technology, according to a new report from the Alliance for Automotive Innovation, which represents automakers producing the majority of cars and trucks in the U.S.
"We really are at a transformative moment in the auto industry here in the United States," said John Bozzella, CEO of the Alliance. But "this future is not certain. Policy and industry working together can accelerate that future. If we don't effectively work together, we also run the risk of seeing our competitiveness and our economic security ceded to other nations."
The policy platform puts forward proposals for multiple steps in the auto production chain for a "comprehensive" approach that addresses everything from research and development to consumer incentives.
The auto industry was hit hard by the pandemic, and early projections estimated the industry might not be able to recover pre-pandemic sales numbers for years after the virus was over. But Detroit automakers reported record earnings this fall despite the uncertainty.
Still, the Alliance said the industry will struggle with reduced sales, which it argues will “drive companies to curtail key investments.”
The group proposed the federal government help out with research and development incentives by avoiding “overly restrictive export control policies" that would prevent automakers from exporting technology to other markets and by expanding “access to capital” over the next several years. That could include added state or federal tax credits for auto companies that can then use those savings for investments, Bozzella said.
As it did in a report earlier this month, the Alliance again pushed for policies that would make it easier for automakers to roll out self-driving vehicles on a mass scale, primarily changing regulations that require adherence to safety standards meant for vehicles with human drivers.
That’s crucial for the U.S. to be a contender in the automated vehicle market in the future, they argue, as China and the European Union leap ahead on the technology.
China also leads in battery manufacturing, which the Alliance warns could create “long-term economic security risks” because U.S. supply chains are so reliant on internal combustion engines. Revamping existing facilities to make new technologies takes time and money, the latter of which the federal government can help with, they argue.
The Alliance recommends the U.S. helps develop training programs to ensure workers can transition to new manufacturing and supply chain jobs in an industry producing more EVs and AVs. Studies on how and whether new technologies might affect workers — and whether “potential compensatory measures are appropriate” — would also help, they write.
They also argued it’s time for the electric vehicle market to go beyond seeking affordability for consumers — one of the major goals as manufacturers have worked to scale up their EV fleets — to convenience, in which customers understand and can shop for EVs with the same know-how as tailpipe vehicles.
IHS Markit predicted there will be 130 models available to U.S. consumers in six years, as the industry spends hundreds of billions of dollars on EVs.
U.S. officials can drive EV adoption by expanding consumer incentives like tax credits or even free public parking for EVs; investing in charging infrastructure to reduce customer anxiety about how far they can drive and to make it easier for people in urban areas, apartment complexes and low-income communities to access chargers; buying EVs for government fleets; and improving the electric grid to better support affordable home charging, the group said.
"When you look at reducing greenhouse gas emissions, the big opportunity for making huge progress in the next decade," Bozzella said, which will require the industry engaging in long-, mid- and short-term collaboration with all levels of government.
President-elect Joe Biden has said he's committed to some of the goals the Alliance put forward in its report, such as charging infrastructure improvements and government EV purchases. But it remains to be seen who will control the U.S. Senate in 2021, with an outstanding Senate race in Georgia set to determine the majority in early January.
But Bozzella said he's confident the proposals will have bipartisan appeal.
"We are on the cusp of a transformative moment, and now is the time to outline the key steps that get us through that transformation and ensure that the U.S. is a global leader in the development, manufacture, and sale of these technologies not only here but around the world."