How the Biden Administration Seeks to Encourage U.S. EV Adoption
EVs have been top of mind for President Joe Biden and his administration, both during his campaign and after taking office. His environmental and economic agenda calls for greater EV adoption, expanded national charging infrastructure, and reduced greenhouse gas (GHG) emissions.
In addition to encouraging EVs at the government level, the president has also pushed for transitioning the nation’s 500,000 school bus fleet to American-made, zero-emission versions within five years, as part of recommendations made by the Biden-Sanders Unity Task Force.
To incentivize a broad national shift to electric vehicles, Biden seeks to:
- Electrify the entire federal fleet
- Set new fuel economy standards for vehicles
- Install a half-million public charging stations nationwide
- Restore the full federal EV tax credit
Biden’s EV-Focused Executive Orders
On Jan. 27, 2021, President Biden signed several executive actions to address climate change with the goal of protecting human health, cleaning the environment, and positioning America as a leader in the future of clean energy1. As part of this objective, Biden said his administration would build 500,000 new electric vehicle charging stations nationwide as a part of the plan to modernize the country’s highway systems.
He said, “We see American consumers switching to electric vehicles through rebates and incentives, and the residents of our cities and towns breathing cleaner air, and fewer kids living with asthma and dying from it.”
Biden added that the federal government’s large vehicle fleet was also ripe for electrification. “With today’s executive order ... we’re going to harness the purchasing power of the federal government to buy clean, zero-emission vehicles that are made and sourced by union workers right here in America,” he said.
Under his executive order on Tackling the Climate Crisis at Home and Abroad, Biden asked his newly formed National Climate Task Force to leverage all available procurement authorities to implement clean and zero-emission vehicles for federal, state, local and tribal government fleets, including the U.S. Postal Service. The plan also requires the task force to ensure union jobs are created to manufacture the new government EVs.
Biden’s Climate Change Plan: EV Initiatives
As part of Biden’s Plan for Climate Change and Environmental Justice, the administration identified transportation-based GHG emissions as the fastest-growing source of U.S. climate pollution. The nation’s transportation sector is responsible for approximately 28% of total GHG, according to the U.S. Environmental Protection Agency2. To address this problem, Biden wants to build on standards set by the Clean Air Act and put in place new fuel economy standards with the goal of 100% electrified light- and medium-duty vehicles, as well as yearly heavy-duty vehicle improvements.
The plan also goes as far as encouraging American-based EV production by seeking to add “new targeted incentives for manufacturers to build or retool factories to assemble zero-emission vehicles, parts, and associated infrastructure here at home.”3
Federal EV Tax Credit Expansion
Biden has identified the lack of charging stations and coordination across various government levels as a key barrier to deploying more EVs and other GHG-reducing vehicles. To help encourage EV adoption, the president said he plans to restore the full electric vehicle tax credit to encourage EV purchases, with a special focus on middle-class consumers.
The current tax credit system benefits expire after the first 200,000 vehicles are sold by the manufacturer. Under Biden’s plan, the system would increase its cap to 600,000, which proponents say could generate over 7.5 million new EV sales, compared to 2.2 million under the current system.4 In addition, the initiative would reduce the maximum credit of $7,500 to $7,000, partially due to the higher volume of awarded credits.5 Those federal EV rebate extensions were included in the 2020 federal spending bill but were cut by the White House.
What Do Biden’s Climate Change Priorities Mean for the EV Industry?
In large measure, implementation of the ambitious goals set forth by the administration for transportation electrification will require congressional action to provide necessary funding or otherwise to impose new federal regulations. However, recent executive actions demonstrate that electrification will be a key administration priority in upcoming legislation including any infrastructure bill.
According to Dr. Michael Schwartz, energy policy professional and eTransEnergy’s executive advisor, “The availability of tax credits and other forms of federal subsidies will promote sustainable EV adoption across all vehicle segments by reducing up-front costs and driving down the technology cost curve for both EVs and infrastructure; we have seen this impact unfold previously in renewable energy. Particularly for fleet operators, it is now timely to develop actionable plans for scaled EV deployment.”
While the expanded tax credit is a step in the right direction, vehicle incentives are not sufficient at this time, added Schwartz. “There are significant barriers to adoption which also need to be addressed to provide a seamless charging experience reflecting sustainability and resiliency factors. The entire EV ecosphere must be advanced, developed, and deployed,” he said.
The administration’s push for EV adoption should drive the sector “sky high,” according to Schwartz, who added that he expects a significant transition within the next two decades with new ICE vehicles only filling the gaps with duty cycle applications not compatible with EVs. Moving forward, Schwartz said the U.S. needs an “industrial” policy for transportation electrification to address EV assets created from rare components and materials, such as with batteries, electric grid modernization, and customer-centric EV infrastructure, while keeping sustainability and resiliency considerations in mind.
If your business, school or municipality is looking to electrify its fleet, eTransEnergy has the experience and end-to-end electrification solutions needed to help ensure a seamless and cost-effective transition. Reach out to our team of EV professionals.
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