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  • Writer's pictureEdward Lehman

Major Reforms Loom for U.S. Car Industry

President Joe Biden is pushing to get his $2 trillion USD infrastructure and jobs package in an effort to reshape the American economy, which, if approved would rank as one of the largest federal efforts to curb the United States’ greenhouse gas emissions and advance the president’s goal to put the country on a path to net-zero carbon emissions by 2050.

Among other things, the plan calls for a massive investment in America's roadways, railways and bridges, with an added a focus on clean energy. That includes a proposed $174 billion USD — or about 28 percent of the transportation portion — on electric vehicles (EV), with a network of 500,000 electric vehicle stations, using EVs in bus fleets, and replacing the federal government's fleet of diesel transit vehicles with EVs.

The Biden administration plan calls for setting aside money to retool factories and boost domestic supply of materials, tax incentives for EV buyers, and grant and incentive programs for charging infrastructure.

But one of the biggest hurdles to the new plan is that currently plug-in vehicles — which include EVs and hybrid electric vehicles with traditional engines — only accounted for about two percent of the more than 17 million new vehicles sold domestically in 2019.

There simply aren’t enough EV drivers to make it a viable business ... yet.

The first area that will help switch the U.S. economy to more EV usage is the conversion of buses.

The U.S. has more than 475,000 school buses and 65,000 transit buses — nearly all running on diesel fuel — but it is estimated 50 percent of all new North American-built buses in 2025 will be electric.

The second step is statewide support, providing a multi-pronged approach to phasing out traditional vehicles and consumers adopting EVs.

The governors of a dozen U.S. states —California, New York, Massachusetts, North Carolina, Connecticut, Hawaii, Maine, New Jersey, New Mexico, Oregon, Washington State and Rhode Island — recently called on the Biden administration to back ending sales of new gasoline-powered vehicles by 2035.

California is the leader of this push, which separately announced in late 2020 that the state planned to end sales of new gas-powered passenger vehicles by 2035.

While automakers like General Motors and Volkswagen are heavily investing in improving performance and lowering prices of EVs to catch up to other companies such as Tesla, nearly all EV producers are far less interested in building, owning and/or operating their own charging networks.

The third aspect to realizing a switch to EVs in the U.S. is constructing a charging network to accommodate the expected growth of EVs.

There are about 41,400 EV charging stations in the U.S., according to the Department of Energy. That compares with more than 136,400 gas stations.

But building a network of chargers is far more complex than it sounds. It takes a mix of private-public partnerships that can involve local municipalities, businesses, and utility companies, as well as automakers and an emerging group of EV charging companies.

The EV shift in the U.S. will necessitate an entire universe of charging infrastructure that is easy to use and accessible for different scenarios.

A pillar of AmChamUS is the support of the autonomous vehicles (AVs) and unmanned aerial systems (UAS) technology industries, which have the potential to help strengthen the competitiveness of the U.S. economy.

Concomitant with AVs and UAS technologies is the EV industry, which given the scope of infrastructure changes that will necessitate U.S. consumers switching to an EV-based transportation system, would significantly contribute to job growth and overall economic prosperity.


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