Trade groups, UAW push Biden to boost EV investment, incentives
Detroit — Trade groups representing major automakers, their suppliers and the United Auto Workers are asking President Joe Biden for a "comprehensive plan" on electric vehicles, more investment and expanded tax incentives for EV purchases.
"This bold, comprehensive strategy is required to establish the U.S. as a leader in the next generation of clean transportation innovation. Efforts that incentivize wider-scale EV adoption, build out the necessary infrastructure, and facilitate consumer awareness are essential components to EV market expansion," the Alliance for Automotive Innovation, the Motor & Equipment Manufacturers Association and the UAW wrote Biden in a six-page letter dated Monday.
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News of the letter comes a day before the president is set to unveil plans for a $3 trillion infrastructure package in Pittsburgh. The Biden administration did not immediately return a request for comment on the groups' requests Tuesday.
The letter outlines how the auto industry expects the transition to EVs to be subsidized by American taxpayers, with automakers already pledging billions of dollars to get plants transitioned to build battery-powered vehicles and launch new EVs.
"The scale of this transformation is extraordinary," Alliance for Automotive Innovation President John Bozzella said on a call Tuesday, noting that automakers and suppliers will spend $250 billion on this by 2023.
"The other aspect of this is if you look at the return on capital right now, you're seeing a tremendous amount of investment, but 2% of vehicle sales in the United States are EVs right now. To get to substantially larger percentages, it's going to take an enormous transformation."
Infrastructure investment, among other government assistance, is needed for this transformation, Bozzella added.
Experts like Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, agree that government investment is needed so the U.S. will remain competitive globally: "By dropping the ball and not investing in EVs, we're slipping behind the rest of the world.
"The need is there ... and now's the time to ask for federal money only because the administration is looking for ways to inspire the markets and the industries."
Auto companies have historically not gotten themselves involved with the fueling side of the business. When it comes to charging, Tesla Inc. has created its own set of charging stations throughout the country. General Motors Co. is partnering with the public fast-charging network EVgo to install more charging stations. Ford Motor Co. worked with Greenlots and Electrify America to expand charging infrastructure, and Stellantis NV just recently said it was working with Electrify America.
Sam Abuelsamid, principal research analyst leading Guidehouse Insights' E-Mobility solution, said it is important to have a standardized charging network: "You want to have incentives to avoid proprietary networks because when you fragment the network like that, that just makes it harder for everybody."
In the letter, the Alliance, MEMA and the UAW write that EV charging and hydrogen fuel cell refueling needs to be more convenient for consumers. Available charging stations, they write, will reduce range anxiety and increase consumer awareness.
The three also recommended policies for:
- Expanding and extending federal tax credits for EVs, and extending the fuel cell vehicle tax credit;
- Providing more R&D investment to reduce costs and improve batteries, fuel cells and hydrogen fuel generation;
- Directing the secretary of energy and secretary of transportation to develop and fund programs for consumer awareness, EV adoption and to show infrastructure availability;
- Setting "ambitious" federal fleet EV requirements.
The union and trade groups also offer recommendations "to encourage and incentivize investment by manufacturers and suppliers," including increasing investment in the Domestic Manufacturing Conversion Grant Program to spur "the domestic manufacture of batteries, power electronics, electric motors, and other technologies in zero emission vehicles."
The letter notes that Chinese chemical companies made about 80% of the world’s battery raw materials. n a separate statement, UAW President Rory Gamble noted how automakers starting battery production in the U.S. are often doing so by creating joint ventures. GM, for example, is building a battery cell manufacturing plant in northeast Ohio with South Korean battery manufacturer LG Chem.
The $15-to-$17 an hour wage at the joint venture plant will be lower than what GM pays its auto assembly workers. By the end of the four-year UAW/GM 2019 contract, hourly GM workers will make $32.32 an hour.
"The investments we make in EV transition should not result in increased outsourcing or erosion of job quality in the industry through joint ventures," Gamble wrote in a statement. "We need policies that promote domestic manufacturing and quality union jobs here in the United States through this investment."
Biden wants to convert more than 645,000 federal vehicles to run on batteries. He campaigned on a promise to roll out half a million electric vehicle charging stations across the U.S. and suggested the transition will create more than 1 million new jobs.
He's also said he would support other incentives for EV adoption, including additional consumer tax incentives and federal investment in research and development.
Incentives are needed more on the lower end of the market for the many people who decide to buy used vehicles over new, Abeulsamid said. Replacing the existing vehicle fleet would have "a real environmental impact."
Staff writer Riley Beggin contributed.