Detroit Three, UAW in talks with White House to set EV sales goals

Riley Beggin
The Detroit News

Washington — The Detroit automakers and the United Auto Workers are in discussions with officials in the Biden White House as it aims to broker a voluntary agreement to dramatically increase electric vehicle sales over the next decade. 

The White House is seeking to get General Motors Co., Ford Motor Co., Stellantis NV and the union to commit to 40% to 50% electrified vehicle sales by 2030, according to three sources with direct knowledge of the negotiations.

The group has not agreed upon a firm target, the sources said, though the administration hopes to announce the goal alongside updated emissions and mileage standards early next week. UAW spokesman Brian Rothenberg said: "We're still in discussions, but there's no agreement at all."

The administration is keen to project a unified front, with the industry supporting its goals to ramp up electrification and reach carbon neutrality economy-wide by 2050. How the industry acts in the coming years — and whether consumers take up the new electrified vehicles — will determine whether the administration reaches those goals, as the transportation sector is still the largest emitter of greenhouse gases in the country. 

The discussions come as some of the world's leading governments move aggressively to phase out gas- and diesel-powered vehicles. The European Union has proposed banning the sale of gas engines by 2035. In the United States, California and Massachusetts have committed to the same goal, and 11 other states have considered following suit.

President Joe Biden has resisted calls from environmentalists and the governors of 12 U.S. states to implement a similar policy federally. Currently, only around 2% of all new vehicle sales in the United States are electric vehicles. 

Biden's original $2.3 trillion infrastructure plan called for $174 billion to "win" the global electric vehicle market, which is currently dominated by Europe and China. Some of that funding, including $15 billion for charging stations and electric buses, is included in the bipartisan plan being drafted in Congress.

The rest, EV advocates hope, will be included in a partisan reconciliation bill that Democrats hope to pass with their narrow majorities alongside the bipartisan package. The negotiations over both packages remain in flux. 

But the end result of those proposals will be fundamental to the industry's ability to sign on publicly to an electrified vehicle sales goal, sources said. Funding for charging stations, grants for retooling factories and tax credits to make EVs more affordable will make it easier for automakers to reach the goal, as "range anxiety" and vehicle cost remain the biggest barriers to adoption among consumers.

The White House did not respond to a request for comment on the discussions. A spokesperson for GM said they do not have an agreement to announce, a spokesperson for Ford noted the company's pre-existing goal of 40% global EV sales by 2030, and a spokesperson for Stellantis declined to comment.

Rush to green

Right now, there are only around 43,000 public electric vehicle charging stations in the U.S., according to the Department of Energy. Just over 5,000 of those are DC Fast chargers, which can charge an EV to 80% in less than an hour and most closely mirror the experience of fueling up at a gas station (though that speed isn't yet possible with existing technology).

Each of the automakers already has made moves to significantly ramp up EV production in the coming years with goals that are close to what the White House is seeking.

Ford has said it expects 40% of its global sales to be electric vehicles by 2030 and said on a recent earnings call that consumer demand for EVs has outpaced expectation. GM aims to have all of its new light-duty vehicles be zero emission by 2035. Stellantis announced recently it is targeting over 40% of sales in the U.S. to be electrified by 2030.

The UAW has said it supports electrification, and it has a close ally in the administration, which is pushing for protections for unions in the transition. However, union leaders have urged caution on the rush to EVs, raising concerns about consumer adoption and potential job losses under the new technology. 

Environmental groups, which are seeking more stringent standards that would push the industry to electric, and labor leaders have been in discussions for months on how to shape policy that works for them both.

"It’s not the environment or jobs, it’s both," said Rep. Debbie Dingell, D-Dearborn, who first organized the discussions. "Everybody’s working very hard to keep the industry at the forefront of the global market, to protect jobs and to transition to cleaner technology."

New standards ahead

The administration hopes to announce the goal alongside new mileage and emissions standards that are expected to be released early next week, sources said. Former President Donald Trump loosened standards while in office, and industry, labor and environmental leaders all expected the Biden administration to reverse course, though how far the new rules would go has remained speculative.

The Associated Press reported on Tuesday that those standards would implement the California framework, which increases mileage standards and cuts emissions by 3.7% annually, beginning with model year 2023. In 2025, the requirements would increase to the Obama standards of 5% annual increases in efficiency and an even higher increase beginning in 2026. 

However, not all sources agreed that's what's coming. Most automakers prefer the California standards, while environmental groups have pushed for standards beyond the Obama-era requirements in order to make up for added emissions under the Trump administration, when mileage requirements were reduced to 1.5% increases annually.

The auto industry was divided over emissions standards under Trump, who banned California from setting its own emissions standards, which it has done for decades under an exemption in the Clean Air Act.

Five companies — Ford, Volkswagen AG, BMW AG, Honda Motor Co. and Volvo Cars Ltd. — sided with California and agreed to the state's increased standards. GM, Stellantis (then Fiat Chrysler NV), Toyota Motor Corp. and other smaller automakers sided with the Trump administration, though all three dropped out of the suit after Biden was elected.

Twitter: @rbeggin