What a Biden Presidency means to the auto industry … and to you


When Donald Trump was elected President four years ago, MotorTrend wrote a critical analysis of what the Trump administration would mean for our mode of transportation. Republican-minded readers dared me to discuss this subject in a similarly critical manner the next time a Democrat is in the Oval Office. I will not let you down.

“Corvette Joe” Biden is President of the United States, and like all new CEOs of America, he has a list of goals, including how Americans should move around the country. But just like George HW Bush was puzzled by a supermarket scanner, Biden’s four-decade Beltway residence and Amtrak shuttle service left him ill-equipped to control the realities of the future of traffic. And progressive Democrats ride shotguns, one gaudy initiative after another.

Biden is expected to reverse Trump’s easing of emissions and fuel consumption regulations and reinstate stricter Obama-era standards. He has expressed his support for the 16 states that follow the California Air Resources Board bylaws. Automakers don’t want to be on the wrong side of climate change and will play ball despite some additional costs. You will prefer to be part of Biden’s pledged 1 million new infrastructure and clean technology jobs. That is all noble and good. Cleaning up car emissions is a quick way to improve our air quality.

In terms of electric vehicles and the general public, Democrats fought off Trump’s attempts to remove the $ 7,500 tax credit on the purchase of ZEV. This was an example of how Trump struggled with himself – he hated the kale green touchy feelies of electric vehicles and possibly eliminated a tax break for the mostly wealthy people who bought Teslas. In the end, the credits remained.

Now Biden wants to extend these tax credits. These are the winners of government selections (which it does all the time) instead of letting the free market dictate – but for now at least the tax credit will benefit cheaper EV buyers as cheaper nameplates reach dealerships.

Biden also wants to push for at least 500,000 more EV charging stations to make it easier for Americans to access electrics if EV purchase prices drop (we mean he means 500,000 charging ports since America has only 168,000 gas stations according to the fuel economy. Gov) . The Department of Energy estimates that each quick charger costs an average of $ 20,000 to install. Add that up, that’s $ 10 billion. Guess who pays for it? You are, Mr and Mrs, taxpayers.

But this is where the fantasy really deviates from reality. California Governor Gavin Newsom has accepted all New passenger cars sold in the state will be zero emissions by 2035. A similar plan for all Americans is working its way through Congress.

That’s absurd. First of all, pay attention to the word “sold”, as the legislature cannot force citizens to do so to buy emission-free vehicles. Finally, “freedom” includes freedom of choice, although Biden’s proposed “Cash for Clunkers” program to replace gas burners with electric vehicles could sweeten the pot (with taxpayers’ money). Still, there can be a significant percentage of Americans who will believe, “You can have the keys to my hellcat if you can get it out of my cold, dead hands.”

As a result, people will hold onto their gas-powered cars for longer and longer instead of buying government-mandated electric vehicles. Unless buyers can have price, performance, and refill time parity for an electric equivalent of a Honda Civic or Ford Esce, there is no demand. Dealer lots are filled with unsold inventory. Plant management slows down and stops. The last thing Democrats want to do is honk the United Auto Workers union. So expect these mandates to be lifted unless technological advances and the availability of raw materials provide cables and affordable electric vehicles in time to meet these goals.

More worryingly, electric vehicles represented only 1.8% of the total vehicle market in 2020. Subtract the trendy enclaves near San Francisco, Los Angeles, Seattle, Boston, and New York City and there are virtually no EV sales.

Some theorize that the rise of electric vehicles could follow that of PCs or smartphones, where mass adoption followed trend-setters as daily prices became affordable. But computers and smartphones were an incremental technology – they didn’t try to replace something that already existed and did the job perfectly. However, given the financial commitments some automakers have to electric vehicles, they are rising in anticipation of mass adoption.

With major traffic problems, Biden’s appointment of Pete Buttigieg as Secretary of Transportation appears to be another case of political repayment. What does the mayor of a university town with 100,000 inhabitants really know about interstate traffic? Aside from Buttigieg’s infrastructure-rich campaign promise, we’ll find out soon. Biden must also fill key department head roles with subject matter experts such as an NHTSA administrator – a vacancy since August 2019, and even then he was an “acting” head of the agency.

Speaking of Buttigieg, but away from the idea of ​​cars as a means of transport, the new DOT secretary has started upgrading Amtrak to the equivalent of the European high-speed rail. While HSR has benefits in certain areas, it also costs around $ 200 million per mile at least to build in California’s example. Amtrak’s own estimates of replacing the existing northeast corridor with HSR are even more expensive – as it requires bespoke tracks that are not shared with cargo. Even with good California math, it would cost $ 4.4 to just replicate Amtrak’s existing 22,000-mile network trillion.

Look, this is less about transport policy than about choice. In the 2022 and 2024 election campaigns, a $ 4 trillion tax hike to allow latte-sweating, brie-sniffing coastal elites to zoom around in electric vehicles or drive quickly between Silicon Beach and Silicon Valley could be a wedge problem in major electoral states like Georgia and Texas be . If an Atlanta or Dallas voter thinks California and New York are taking money out of their paperback, and that’s up to the Democrats, they will vote differently.

It’s been more than 10 years since President Obama’s $ 8 billion bullet train giveaway. So far, little has been done but funding think tanks, buying a few parcels of land, and shoveling a few shovels of earth. But the Democrats are ready to double down, with lots of zeros at the end.

When you add it all up, Republicans will enjoy those “coastal elite” tax or deficit hikes when the elections take place – and you can get out of the Democratic Senate. It is Realpolitik in action, and that’s what really drives America.

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