WASHINGTON—Two of the Biden administration's biggest policy goals are taking shape, and the U.S. auto industry is right in the middle.
With a pair of executive orders signed Jan. 25 and 27, President Biden laid the foundation for his administration's climate policy and emphasized the value of American jobs and U.S.-made products in the process.
With the Made in America executive order signed Jan. 25, he called on the U.S. government to lean into green automotive technology and prioritize purchases of American-made cars with U.S.-made components.
In remarks given ahead of that signing, Biden pledged to expand U.S. contracts to include more small- and minority-owned businesses, while also focusing on U.S-made electric vehicles.
"The federal government," Biden said, "also owns an enormous fleet of vehicles, which we're going to replace with clean, electric vehicles made right here in America by American workers, creating millions of jobs—a million auto worker jobs in clean energy—and vehicles that are net-zero emissions."
Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, said the move could boost the auto industry, which already had pivoted to invest heavily in electric vehicle technology.
"The auto industry has wondered, 'if I build it, will they come? Will the consumer be there?' " Dziczek said. "Well, the federal government is lining up, saying 'we are a big consumer, and we are here.' "
The federal government, Dziczek said, has about 650,000 fleet vehicles. How many of those are light vehicles is hard to tell, but the potential impact of an investment like the one Biden proposed is substantial.
The EV purchase pledge supercharges what had been a narrow focus for the U.S. government. In 2019, for instance, the federal government purchased 50,000 new vehicles across its agencies as well as the military and postal service. Of those, just 167 were EVs.
Moreover, the federal government's leadership on the purchase of EVs could encourage state, local and municipal governments to follow suit, Dziczek said.
Biden's executive order also prioritized U.S.-made vehicles containing U.S.-made parts, which is worth noting, Dziczek said.
"I think a critical thing about the (executive order) is he didn't just say he wanted to buy electric vehicles and transform fleets," Dziczek said. "He said he wanted to buy electric vehicles that had at least 50 percent of their content made in the U.S. by workers who have a choice to join a union."
Biden's executive order also is well-timed because North America is poised for an unprecedented EV boom. Factors impacting technology, manufacturing and demand are coming together to create a new era for the automotive industry in terms of EV rollouts.
"We don't make that many EVs in North America, but we are about to make a helluva lot of more," Dziczek said. "Three times as many models are going to be made in North America."
GM shifts gears
Just as the Biden Administration articulated its goals for climate, jobs and infrastructure, General Motors Co. signaled that it's prepared to lead the way on development and production of electric vehicles.
The auto maker said Jan. 28 that it will discontinue production of gasoline-powered light vehicles to focus exclusively on battery-powered light vehicles beginning in 2035. The ultimate goal is to achieve carbon neutrality by 2040, the company said.