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Axios
Biden’s plan to replace government fleet with electric vehicles won’t be easy
President Biden’s plan to replace the government fleet of 650,000 cars and trucks with electric vehicles assembled in the United States by unionized workers is easier said than done. Why it matters: The populist “Buy American” message sounds great, but the vehicles Biden wants are still several years away, and his buying criteria would require a costly overhaul of automakers’ manufacturing strategies, let alone a reversal of fortunes for organizers of labor long thwarted by Tesla and other non-union companies Support safe, smart and sane journalism. Sign up for Axios newsletters here Reality Check: Right now, not a single model fits the president’s criteria: battery-powered, made in America, by unionized workers. * Tesla produces the vast majority of electric vehicles in the United States, and all of its models contain at least 55% American-made parts, according to federal data. But Tesla does not have a union, and CEO Elon Musk has broken federal labor laws. * General Motors’ Chevrolet Bolt is the only electric vehicle built in the United States by unions. But it is mainly made with parts imported from Korea. Only 24% of the content is considered national. * The Nissan Leaf, another popular electric vehicle, is made in Tennessee. But the factory is not unionized and only 35% of the parts are national. “Made in America” itself is confusing, as the current rules governing “domestic” content include parts made in the United States and Canada. * Under the American Automobile Labeling Act, passed in 1992, every car must be labeled with where it was assembled, the percentage of U.S. and Canadian equipment combined, and the country where the vehicle was assembled. engine and transmission were built. * The recently adopted trade agreement between the United States, Mexico and Canada adds another layer of rules on the origin of parts. Biden wants to change the whole system to determine if a federal vehicle is “American.” * Today the government requires federal vehicles to have at least 50% of their components made in America, but loopholes allow more valuable parts like engines or steel to be made elsewhere, Biden told the journalists Monday. * He wants a higher threshold and stricter rules that would directly benefit American workers. Be smart: Anything is doable, but certainly not during Biden’s four-year tenure. * “It just doesn’t fit,” said Joe Langley, forecast analyst for IHS Markit. “The product is still a few years away.” * And replacing 650,000 federal vehicles with electric vehicles would require increased U.S. investment across the entire supply chain, including electric motors, batteries and vehicles – which will take time, said Langley. * Union leaders are happy Biden is focused on the future of the industry. “He sees new technologies as a way to develop our industry and our economy,” a United Auto Workers spokesperson told Axios. Part of this investment is already underway. GM, for example, is overhauling several factories to produce electric vehicles in Tennessee and Michigan. Ford will build its next e-Transit van in Missouri. * But GM, Ford and Stellantis (the newly merged FiatChrysler and Peugeot) recently pledged to build more EVs at union factories in Canada. * And Ford is stepping up production of its highly anticipated Mustang Mach-E in Mexico. What to watch: There could be some surprise winners from Biden’s plan. * A handful of well-funded EV startups such as Lordstown Motors, Rivian, and Workhorse are developing plug-in utility vehicles such as vans and trucks – items often needed in government fleets. * “It could put the wind in the sails of many new startups,” Langley said. Be smart: sign up for America’s most influential newsletter for FREE.
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