U.S. President Joe Biden will sign an executive order on Thursday aimed at making half of all new vehicles sold in 2030 zero-emissions vehicles and will propose new vehicle emission rules to cut pollution through 2026, the White House said.
Biden’s goal, which is not legally binding, won the support of major U.S. and foreign automakers that warned it would require billions of dollars in government funding.
“We have got to act,” U.S. Transportation Secretary Pete Buttigieg said in a CNBC interview. “This goal of getting half of our new vehicles to be electric within the decade is going to be urgently needed for us to meet the imperative of climate in our time.”
General Motors Co., Ford Motor Co. and Chrysler-parent Stellantis NV, in a joint statement, said they aspired “to achieve sales of 40-50 per cent of annual U.S. volumes of electric vehicles … by 2030.”
Reuters reported the planned automaker announcement on Tuesday.
Biden’s 50 per cent goal and the automakers’ 40-50 per cent aspiration includes battery electric, fuel cell and plug-in hybrid vehicles that also have a gasoline engine.
Biden has repeatedly resisted calls from many Democrats to set a binding requirement for EV adoption or to follow California and some countries in setting 2035 as a date to phase out the sale of new gasoline-powered light duty vehicles in the face of opposition by the United Auto Workers (UAW) union.
UAW president Ray Curry noted the EV goal but said it was focused “on preserving the wages and benefits that have been the heart and soul of the American middle class.”
New schedule for revised standards
Biden’s executive order sets a schedule for developing new emissions standards through at least 2030 for light duty vehicles and as early as 2027 for larger vehicles.
Dan Becker, director of the Safe Climate Transport Campaign, said the plan “relies on unenforceable voluntary commitments from unreliable car makers…. Voluntary pledges by auto companies make a New Year’s weight loss resolution look like a legally binding contract.”
Biden plans a White House event with automakers on Thursday. It was not immediately clear which companies would attend the event, and the White House did not immediately respond to a request for comment.
Tesla Inc. chief executive Elon Musk, whose company makes electric vehicles, tweeted early on Thursday: “Seems odd that Tesla wasn’t invited.”
Buttigieg, asked about Tesla on CNBC, had no direct comment but said the move to EV was focused on the entire market.
Government incentives needed: automakers
The Detroit 3 automakers said the aggressive EV sales goals can only be met with billions of dollars in government incentives, including consumer subsidies, EV charging networks as well as “investments in R&D and incentives to expand the electric vehicle manufacturing and supply chains in the United States.”
Hyundai said it supports the 2030 40-50 per cent EV sales goal. Toyota said in a statement the goal was “great for the environment” and that it would “do our part.”
Meanwhile, U.S. regulators plan to propose revising former president Donald Trump’s March 2020 rollback of fuel economy standards. Trump required 1.5 per cent annual increases in efficiency through 2026, well below the five per cent yearly boosts set in 2012 by former president Barack Obama’s administration.
Biden’s proposed rules, which cover 2023 to 2026, are expected to be similar in overall vehicle emissions reductions to California’s 2019 deal with some automakers that aims to improve fuel economy 3.7 per cent annually through 2026, sources told Reuters.
The new standards would be “ambitious, aggressive but they’re also feasible,” Buttigieg told CNBC, but gave no other details.
BMW, Honda, Volkswagen, Ford and Volvo Cars — which previously struck the California deal — said in a joint statement they support the administration’s electric vehicle goal but that the federal government must take “bold action … to build consumer demand.”
Consulting firm AlixPartners in June said investments in electric vehicles by 2025 could total $330 billion US. Electric vehicles now represent about two per cent of total global vehicle sales, and will be about 24 per cent of total sales by 2030, it forecast.
Biden has called for $174 billion US in government spending to boost EVs, including $100 billion US in consumer incentives. A bipartisan Senate infrastructure bill includes $7.5 billion US for EV charging stations but no money for new consumer incentives.