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What a Biden Presidency Means for the Auto Industry and You

When Donald Trump was elected president four years ago, MotorTrend wrote a critical analysis of what the Trump administration would mean for our way of transport. Republican-leaning readers dared me to deliberate this issue in a similarly critical manner the next time a Democrat resided in the Oval Office. I shall not disappoint. Corvette Joe Biden is president of the United States , and like all new CEOs of America, he has a list of goals, including how he wants Americans to get around the country. But just like George H.W. Bush being mystified by a supermarket scanner, Bidens four-decade Beltway residency and Amtrak commute has made him ill-equipped to navigate the realities of transportations future. And progressive Democrats are riding shotgun, one gaudy initiative at a time. https://www.instagram.com/p/CHCLClxqEZS/ Biden is expected to reverse Trumps emissions and fuel economy regulation relaxations, reinstating stricter Obama-era standards, and has expressed support for the 16 states that follow the California Air Resources Board statutes. Automakers dont want to be on the wrong side of climate change and will play ball, despite some added costs. Theyll appreciate being part of Bidens pledged 1 million new jobs from infrastructure and clean tech . This is all noble and good. Cleaning auto emissions is a fast way to improve our air quality. However, Biden has taken the next step beyond rejoining the Paris Agreement, pledging to make the U.S. government vehicle fleet all-electric by 2030. This is more of a paper proclamation, as there are plenty of loopholes to keep internal combustion vehicles where necessary. As for EVs and the general public, Democrats fended off Trump's attempts to squash the $7,500 ZEV-purchase tax credit. This was an instance of Trump fighting with himselfhating the kale-green touchy-feelies of EVs while also potentially removing a tax break for the mostly rich folks who bought Teslas. In the end, the credits stayed. https://www.instagram.com/p/CLe-CD_Htse/ Now Biden wants to extend these tax credits. This is government picking winners (which it does all the time), rather than letting the free market dictatebut at least now the tax credit will benefit purchasers of lower-priced EVs as more affordable nameplates reach dealerships. Biden also wants to push for at least 500,000 more EV charging stations to make electrics more accessible to Americans as EV purchase prices come down (we think he means 500,000 charging ports, as there are only 168,000 gasoline service stations in America, according to fueleconomy.gov). Still, each fast-charger costs an average of $20,000 to install,according to Department of Energy estimates. Add it up, that's $10 billion. Guess who's paying for that? You are, Mr. and Mrs. Taxpayer. But heres where fantasy really diverges from reality. California Governor Gavin Newsom has pledged all new passenger vehicles sold in the state will be zero-emission by 2035. A similar plan for all Americans is working its way through Congress. This is preposterous. First, note the word sold, as lawmakers cannot force citizens to buy zero-emission vehicles. After all, freedom includes freedom of choice, though Bidens proposed cash for clunkers program to exchange gas burners for EVs could sweeten the pot (with taxpayer dollars). Still, there may be a significant percentage of Americans who will believe, You can have the keys to my Hellcat when you pry them from my cold dead hands. As a result, people will hang on to their gas-powered cars longer and longer, rather than buy government-mandated EVs. Unless shoppers can have price, performance, and fill-up-time parity for an electric equivalent to a gas Honda Civic or Ford Escape, there wont be demand. Dealership lots will be filled with unsold inventory. Factory lines will slow and stop. The last thing Democrats want to do is honk off the United Auto Workers union, so expect these mandates to get defanged unless tech advances and raw materials availability deliver capable, affordable EVs in time to meet these targets. More worrisome, EVs represented a mere 1.8% sliver of the overall vehicle market in 2020. Subtract the trendy, monied enclaves near San Francisco, Los Angeles, Seattle, Boston, and New York City, and EV sales are virtually nonexistent. Some theorize the rise of EVs could follow that of personal computers or smartphones, where mass acceptance followed the trendsetters when everyday prices became affordable. But computers and smartphones were an incremental technologythey weren't trying to replace something that already existed and did the job perfectly well. Still, given certain automakers budgetary commitments to EVs, they are certainly ramping up in anticipation of mass acceptance. Still, to require such a stratospheric ramp up of EV market share means Americans will have to start surrendering the keys to their 275 million gas-powered Camrys, Explorers, and, yes, Silverados, to embrace the electric future. Subsidies are a start, but government cannot mandate consumer choice. --> As for larger transport issues, Bidens naming of Pete Buttigieg as Secretary of Transportation appears to be another case of political payback. What does a mayor of a college town of 100,000 people really know about interstate transportation? Buttigiegs infrastructure-laden campaign promises aside, well soon find out. Biden also needs to fill crucial department-head roles with subject-matter experts, such as an NHTSA administratora vacant position since August 2019, and even then, it was an acting head of the agency. Speaking of Buttigieg but getting away from the idea of cars as transport, the new DOT secretary has started pushing to upgrade Amtrak to the equivalent of European high-speed rail. While HSR has merits in certain applications, it also costs about $200 million per mile to build , at least in Californias example. Amtraks own estimates to replace its existing Northeast Corridor with HSR is even more expensivebecause it requires bespoke tracks not shared with freight. Even with the cheaper California math, to merely replicate Amtraks existing 22,000-mile network would cost $4.4 trillion . Look, this is not so much about transportation policy as electability. Come 2022 and 2024 campaign time, a $4 trillion tax hike so latte-swilling, Brie-sniffing coastal elites can zoom around in EVs or take fast rail between Silicon Beach and Silicon Valley could be a wedge issue in crucial electoral states like Georgia and Texas. If a voter in Atlanta or Dallas thinks that California and New York are taking money from his pocketbook, and it's because of the Democrats, theyll vote the other way. It's been 10-plus years since President Obama's $8 billion high-speed rail giveaway. So far, barely anything has been accomplished other than to give funding to think tanks, buy a few parcels of land, and turn a few shovelsful of dirt. But Democrats are ready to double down, with lots of zeros on the end. Add all of this up, and Republicans will feast on these coastal elite tax or deficit increases come election timeand you can say goodbye to the Democrat-led Senate. Its realpolitik in action, and thats what really drives America. The post What a Biden Presidency Means for the Auto Industry and You appeared first on MotorTrend .

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