WASHINGTON—President Biden is looking to make all U.S. government vehicles electric—an ambitious plan that underscores his administration's interest in mitigating climate change and bolstering U.S. manufacturing through electrification.
So far, there has been resounding support for Biden's order from industry leaders, policy makers and lobbyists. But there are some questions as to how realistic it is to manufacture these EVs in the U.S., and what the implications are for the industry.
In last month's executive order, one in a flurry of orders signed during his first days in office, Biden calls for electrifying the entire federal fleet—more than 645,000 cars and trucks in 2019, according to the U.S. General Services Administration.
The order did not specify a timeline or logistics for executing the rollout. The GSA reports that just more than 3,200 federal vehicles now are electric.
The order vaguely pointed to spurring the creation of well-paying union jobs but was not a mandate that all federal electric vehicles be union-made. Biden's order did, however, stress the importance of buying American-made vehicles, following a separate executive order supporting U.S. manufacturing issued days earlier.
The industry long has been preparing for something of this scale, said Martin French, a longtime supplier executive who is now a consultant with Berylls Strategy Advisors.
"What should be celebrated is the vindication of a lot of the investment that the OEMs have been making in the last few years," French told Automotive News. "You've only got to Google 'GM' or 'Ford' or some of the startups to have a look at the investment that's going into the repurposing of old powertrain plants."
Many say the president's order has positive implications for environmental sustainability, the U.S. supply chain and broader EV adoption.
Ben Prochazka, national director of the nonpartisan group Electrification Coalition, said that Biden's directive will "prime the pump for private-sector fleets and the consumer market."
"The federal fleet is a heavyweight customer with immense purchasing power," Prochazka said in a statement. "This announcement sends a clear signal to industry and the markets that there's no turning back—it's time to take electric vehicle production, charging infrastructure development and charging equipment manufacturing to the next level."
The administration is "recognizing the opportunity EVs present to create jobs, advance American competitiveness and decarbonize the U.S. economy," said Joe Britton, executive director of electric vehicle advocacy coalition Zero Emission Transportation Association.
It's "sending a strong market and policy signal, while catalyzing the transportation electrification sector and advancing the critical secondary market for EVs," he said in a statement.
Robbie Diamond, CEO of Securing America's Future Energy, also supports the directive. "We cannot have a thriving domestic supply chain if there is no demand, and this order is a signal of intent toward creating tomorrow's EV industry here in the United States," he said in a statement.
"This announcement recognizes the need for America to compete with her biggest strategic rival across the entire supply chain, so we do not become reliant upon policy decisions made in Beijing for the materials, components and vehicles we will rely on," he said.
Biden is not the first president to make wide-ranging promises related to electric vehicles; former President Obama vowed in 2008 that there would be 1 million plug-in electric vehicles on the roads by 2015—a promise that went unfulfilled.
Biden's promise, though, capitalizes on changes since then and forces other pieces of the electrification puzzle to come together, French said.
"You've got to do something upfront that starts the ball rolling," he said. The Biden administration has "a great chance now to say we've got this mission statement. How does it now really trickle down from a federal level to a state level and really start shaping up for infrastructure, utility companies?
"I believe there will be some massive momentum to come out of this."
Also, "because there's commercial vehicles, there's military vehicles, postal service vehicles, delivery vehicles as well as fleet, there's room for everybody to have a slice of the pie," French said.
After all, auto makers and suppliers are pumping millions of dollars into manufacturing electric vehicles domestically—Ford Motor Co., General Motors and Tesla in particular—as are EV startups such as Rivian.
Suppliers also are ramping up: One example is BorgWarner, which acquired Delphi last year in a move to position the two companies for the shift toward electrification.
Perhaps most vocal has been GM, which has set a goal to sell only EVs by 2035. GM pointed to recent plant investments—including $2.2 billion in Detroit-Hamtramck Assembly, $2 billion in Spring Hill, Tenn., and $300 million in Orion, Mich.
We "think that adding EVs to government fleets and the needed infrastructure to support them is a great way to get more EVs on the road as we work towards a zero-emission, all-electric future," a GM spokeswoman said of Biden's announcement.
It's important to note the changeover won't happen overnight.
"Auto makers generally have been announcing and acting on hundreds of billions of dollars of commitments to retool, but it does take time. There have been announcements for new manufacturing that is still coming, and that's the case in the charging equipment sector as well as it is the vehicle," said Jonathan Levy, chief commercial officer at charging network provider EVgo. "The capacity is coming. It comes to a question of how quickly and how flexible."
"As we think about the manufacturing capacity, it's going to continue to grow, but there's enough out there today to at least get started," Levy added. "How do we make sure that we're keeping that supply chain robust and also not limiting it with too many restrictions, and making sure that we can build out at the scale that's needed?
"Your plan needs to be aggressive and you need to start now. That's going to be a big challenge for the Biden administration."
As the government approaches this directive, it should accept a slightly higher total cost of ownership for the electric vehicle than its gasoline-powered alternative and take a holistic approach to procurement, said Nick Nigro, founder of EV research group Atlas Public Policy, which has studied the electrification potential for publicly owned vehicles.
One benefit of Biden's order is the electrification of U.S. Postal Service vehicles. Given how consumer-facing these vehicles are, this has potential to raise consumer awareness.
Still, "Going to electric is a huge transition, and there's a lot that needs to happen within a fleet to be able to accommodate that, particularly around the infrastructure side of things," Nigro said.
"We're not ready to ship 200,000 electric trucks today, but within the time frame of actually doing the purchase and acquisition, sending that signal to the market to get ready for it because the demand is going to be there, that's critically important," Nigro added.