What the new Biden administration means for future of electric vehicles


Biden has indicated that changes are likely to come thick and fast under his administration.

As the son of a dealership manager, Biden has long ties back to the automotive industry and consumer experience. And — although it is somewhat controversial among automakers — he has committed to rejoining the Paris climate accord, which will require the industry and Washington to recommit to stronger emissions-reduction targets. He also is expected to make extensive use of executive orders to impose stricter environmental standards and to push policies that encourage the uptake of electric vehicles. For starters, those measures could include toughening fuel-economy requirements, expanding tax credits for EV purchases and transitioning the public vehicle fleet to electric from gasoline. His plans have called for installing 500,000 vehicle-charging stations, up from only 27,000 currently.

The U.S. auto industry as a whole is much better prepared today to adapt to this shift. When the Obama administration finalized in 2012 its agreement with big automakers on new fuel-economy standards, it received a mixed reception within the broader industry. While welcoming the clarity, initial optimism frayed as the major technical challenges of achieving the 54.5 mpg standards with internal combustion engines by 2025 became clearer.

This time around, technological barriers have largely been surmounted and there’s industry consensus that the global momentum toward a low-emission, electric future is inevitable.

GM alone plans to introduce 30 new electric models globally by 2025, having announced in November a $7 billion expansion of its EV investment plan.

The big challenge for the industry now will be figuring out how to transition to new models while so much capital is still tied up in old technologies. Automaker and supplier factories will look radically different by 2030, reflecting the reality that EVs need vastly different and fewer parts than current vehicles.

Suppliers will have to perform a balancing act to channel capital, strategic energy and talent into areas that won’t necessarily be making money straight away. The pressure on today’s midmarket suppliers will only increase, and many either won’t exist or will be transformed dramatically in 10 years’ time.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *