Auto industry aims for Biden's EV sales goal

TRAVERSE CITY, Mich.—Eight years. Billions of dollars invested. One lofty goal.

And lots and lots of questions.

Just about one year ago, President Biden articulated an auto industry moonshot. By 2030, he said, half of the new vehicles sold in the U.S. would be electric vehicles.

And, while there is no doubt that the U.S. automotive industry has embraced electric vehicle technology, questions still linger.

Is Biden's goal achievable? And, given where the industry is today, just how far does it have to go to get there?

Moreover, what kind of investment will this take, and what should we be investing in?

During a discussion hosted Aug. 2 as part of the Center for Automotive Research's Management Briefing Seminars, a panel of experts representing automotive OEMs, suppliers, government agencies and non-profit organizations tackled all of those questions.

The short answer, panelists said, is yes. The longer answer: Yes. But, it's complicated.

"We, at DOE, we're of the mindset that we could get to 50 percent if we do this together," said Michael Berube, deputy assistant secretary for sustainable transportation at the U.S. Department of Energy. "This is all three of us (government, business, labor) holding each other accountable to doing the things we have to do: policy investment, R&D, investment by the industry, (and) business models."

Stephanie Searle, director of the fuels program and the U.S. region for the non-profit International Council on Clean Transportation, agrees with Berube. The U.S. automotive industry certainly is capable—and appears to have the drive—to roll out the millions of electrified vehicles it needs to match or even outpace the number of internal combustion engine vehicles sold in 2030.

The key, she said, will be policy.

The electric vehicle market share in the U.S. is right around the 4-5 percent mark, well below the pace-setting regions of China (15 percent) and the European Union (19 percent). The difference maker, Searle said, has been policy—incentivizing the purchase of EVs and disincentivizing ICE.

Without these, hitting a 50-percent market share by 2030 won't be easy.

"There is a long way to go, and there is a risk here that we could be falling behind in terms of market share globally if the U.S. continues to lag so far behind the other countries," Searle said. "So we really need to catch up, and that means more investment by the industry for both vehicle production and charging infrastructure, and we need policies to support both of those sides."

The good news, according to John Bozzella, president and CEO of the Alliance for Automotive Innovation, is that when it comes to achieving Biden's goal, OEMs are all in. They have promised to deliver a range of new electric vehicles across all segments to meet the consumer demands.

Today, there are 79 electrified models—that is battery electric, hybrid plug-ins and hydrogen fuel cell vehicles—available in the U.S. By mid-decade, Bozzella said, that will climb to 130.

And General Motors is among those auto makers pushing to get as many of those EVs on the road as possible.

"We have committed to having capacity for 1 million EVs by 2025," said Jonathan Weinberger, General Motors' chief advocate and director of global transportation technology policy. "… We want to make (owning an EV) as easy as possible. And we want to make the accessibility of EVs as easy as possible, too."

For GM—and others—to make more EVs and make them more affordable for consumers, they will need a lot of support. And that, Weinberger said, goes back to policy.

"We need to see, again at the federal and state level, policies that enable us to be competitive, but they can't be overly burdensome," Weinberger said.

OEMs need the policy support to make it to the 2030 goal, but they also need investment support, specifically for things like infrastructure upgrades and supply chain reinforcement.

"It is an enormous capital investment to shift from internal combustion engines to an electric vehicle market," Bozzella said. "If you can see where we are today … you can see that this is an incredibly ambitious and challenging goal."

Where we are today, is far from the 50-percent threshold. Electric vehicles—BEVs, HEVs and HFCVs—account for just about 5.5 percent of the overall market share, Bozzella said. To achieve a 50-percent share in the next seven or so years, "a lot has to change."

That change requires investments from suppliers—to boost production of critical components like microchips and batteries—as well as state and local governments that back expansion of a charging infrastructure.

"One could argue that the challenges that we faced with regard to the availability of chip fabrication in the United States is, in some ways, a precursor for the EV supply chain," Bozzella said. "In other words, do we have a resilient supply chain (with) access to raw materials and components to be able to produce (batteries or microchips) here in the United States to be able to reach levels of 50 percent by the end of the decade?"

As of right now, no. But there are signs of hope.

According to data from the Alliance for Automotive Innovation, auto makers and their battery partners have invested $94.2 billion to expand production. Battery plant capacity is set to grow by 403 percent by 2025.

Berube is one who chooses to remain optimistic. Afterall, he said, the government has made significant strides in the last several years. Not only has it organized 17 federal departments around this single vision of exponentially expanding the number of EVs sold, it has passed legislation to provide needed funding.

"The infrastructure law last year, it is not an accident that there was $6 billion in that specifically for battery supply chain," Berube said. "I think we have the strategy in place, I think we have the funding to start executing it."

And in the end, it is all of those steps forward—the investments from business, the support of the government and the demand from consumers—that gives Berube hope that the U.S. will meet its goal.

"The reason I say, yes, we are going to make it, is when I look across industry. I look across the supply chain, state governments, local governments—all of the pieces are in place, the competitive forces are aligning to get there," he said.

" … We have (to) lay that plan out, every step, and there may be 1,000 steps between here and the end point," Berube added. "We just have to lay them out, knock them down, keep pushing and doing all those things. But I see that all the pieces are in place, and I think that we are definitely going to get there."