A certain school of thought holds long-term targets as meaningless, as the people making them will no longer be in their job by the time they are proved right or wrong. That’s especially the case for a two-term limited U.S. president. But when it comes to Joe Biden and electric vehicles, it hardly matters whether his new target for 2030 pans out. The objective is to just put one’s foot on the gas.
Biden is calling for half of U.S. vehicle sales to be electrified by the end of the decade. Last year, EVs made up 2% of the market. Bloomberg NEF’s latest long-term outlook has them taking about a third of U.S. sales by 2030. So you might say JFK’s moonshot speech was less ambitious.
As Biden notes in the announcement, though, incumbent automakers such as Ford Motor Co. and General Motors Co. have already set EV targets roughly in the 50% ballpark. As with so much else to do with the green elements of Biden’s agenda, this is about capitalizing on an existing wave of money targeting cleantech. Consider: Tesla Inc. did much of the heavy lifting getting EVs to 2% of the market and invested roughly $23 billion over the past decade doing so 1 . Now just five of the world’s biggest automakers — Ford, Daimler AG, GM, Stellantis NV and Volkswagen AG — have committed to invest $33 billion per year.
That is globally, of course, but the U.S. will take a big chunk of that. With its high-income population, driving culture and predilection for suburban homes (with garages), the U.S. ticks many boxes for EV makers — all except, until recently, political commitment to a transition.
That commitment isn’t rock solid, of course. Biden’s target is just that, and the incentives to get there — such as federal funding for public vehicle chargers — have been shrunk in the bipartisan infrastructure proposal. Delivering real money, as well as associated funding for the necessary upgrades to the electricity grid, depends on the much bigger mooted reconciliation package.
…(by Liam Denning of bloomberg.com)