Biden Wants 40% of American Car Sales With Plugs by 2030. Is It Possible?

It’s only 9 years to 2030—could 40% of U.S. vehicle sales be battery electric by then? It’s the behind-the-scenes goal of the Biden administration, and as much of his agenda it’s a stretch goal. 

The target may sound relatively modest, but cars and trucks with plugs have stubbornly remained at around 2% of sales in the U.S. For the first half of 2021, the figure was 2.2%. Add in hybrids and the sale of “electrified” vehicles is at 7.8% in the first quarter of 2021 (up from 4.8% in the same quarter last year). 

There are now more than 1.1 million on American roads, but that has to be seen against much more robust adoption around the world. Globally, 11 million are driving around, with 10 million of them cars and the rest trucks. Around the world, EV registrations were up 41% in 2020—a challenging year for the industry. There are 370 EVs on world markets, and consumer spending on them was up 50% to $120 billion in 2020.

Biden’s approach is to convince U.S. automakers to make the 40% pledge for their companies. They’ve already made fairly impressive commitments, though not that specific one. Here’s the rundown:

• With the longtime leadership of family member Bill Ford, the company has long been an environmental leader—though it’s been forced to defer some of its more ambitious plans by the high take rate of big SUVs. The new F-150 Lightning is a game-changer, and Ford says it will invest $30 billion in EVs by 2025 and go carbon neutral by 2050. It hasn’t made a no-gas-cars pledge, but it’s already on the record as supporting Biden’s numbers on a global basis: it expects to be at 40% EVs around the world by 2030. Given how much stronger sales are abroad, 40% in the U.S. is a big jump. Ford sold 10,364 battery cars and hybrids in the U.S. last May, led by 1,945 Mustang Mach-E sales. 
• General Motors says it will stop selling gas and diesel vehicles after 2035, though it admits the goal is “aspirational.” But the Cadillac division has made a firm commitment by 2030 and will introduce no more new models with internal-combustion drivetrains. GM sold 202,488 EVs in 2020, but many of those were in China.
• Stellantis is ramping up under its new European partners. It’s planning for 40% of its American fleet to be electric by approximately 2025—ahead of Biden. At that point, the company said, 70% of European sales will be plug-friendly. Stellantis is aiming to sell 400,000 plug-in cars internationally in 2021. 

The automakers’ statements are more along the lines of what they expect to happen by certain dates. That’s a bit different from a firm commitment. Since this is a negotiation, the automakers want some carrots—specifically, beefed-up incentives for EV purchases. The United Auto Workers are involved in the discussions. 

It should be pointed out that it’s difficult to mandate actual sales. Automakers can set goals, and offer good EVs at attractive prices (with subsidies, if available), but the public still has to make the commitment to buy them. 

Right now, automakers can tie into a federal $7,500 income tax credit, but it’s capped at 200,000 total sales so General Motors and Tesla are already out of the running. The problem is that Biden can’t just unilaterally remove the 200,000 cap or increase the credit. Moves like that need Congressional approval. And Congress is a bit iffy at the moment—it just slashed $15 billion in EV subsidies for new charging outlets to $7.5 billion as part of the infrastructure bill. There are 43,000 charging stations nationwide now, with 106,000 individual outlets, the Department of Energy reports. 

Biden has some maneuvering room. He’s revived the Advanced Technology Vehicle Manufacturing (ATVM) loan program, which was established in 2007 but remained quiet all through the Trump and part of the Obama administrations. It still has $17.7 billion in already appropriated money to loan. A strong new team is in place to make the loans. 

Biden can also impose strong fuel economy standards like those that existed during the Obama years. He’s planning to announce the specifics of the new program soon, but early indications are that it aligns with the California approach and critics have already said that isn’t strong enough. More on that soon.

These are skirmishes in a long war, and although automakers are developing EVs on their own, a federal commitment is undoubtedly very helpful in meeting imminent targets. Bloomberg Green reports that the $7.5 billion in the infrastructure bill is “still just a fraction of the $87 billion analysts and environmentalists say is needed this decade to swiftly electrify the nation’s cars and trucks that will require reliable access to electrons.”