Investing in American Electric Vehicle Production

President Joe Biden has allocated $174 billion from his extensive infrastructure initiative to develop domestic supply chains specifically for electric vehicles. This action underscores the necessity for U.S. automotive companies to achieve global competitiveness and secure a greater portion of the expanding EV market.

A Comprehensive Infrastructure Plan

This substantial funding represents a key component of Biden’s broader $2 trillion infrastructure proposal, encompassing investments across numerous sectors. The official plan Fact Sheet references China on six occasions.

One such reference highlights the considerable scale of the Chinese EV market, which currently surpasses the U.S. domestic market by approximately two-thirds. Notably, Foxconn, a primary supplier for Apple, indicated in February its exploration of EV production at its facilities in Wisconsin.

This consideration followed a preliminary agreement to manufacture an EV for Fisker, a startup company that transitioned to a SPAC (Special Purpose Acquisition Company).

Incentivizing EV Adoption

To encourage consumer adoption of domestically produced electric vehicles, President Biden intends to implement sales rebates and tax incentives. The specific details regarding the amount of these incentives are still pending release.

Currently, consumers are eligible for a $7,500 federal tax credit for EV purchases. However, this credit is not accessible to automakers who have already sold over 200,000 electric cars.

For example, prospective Tesla buyers are currently ineligible. It remains uncertain whether the proposed new tax credit will modify or eliminate this existing sales cap for automotive manufacturers.

Expanding Charging Infrastructure

The infrastructure plan also prioritizes the development of a nationwide EV charging network, aiming for 500,000 charging stations by the year 2030. Recent research conducted by Consumer Reports reveals that limited access to public charging stations is a significant deterrent for potential EV buyers.

Modernizing Public Transit

Beyond passenger vehicles, Biden’s administration plans to allocate funds towards modernizing public transportation. This includes replacing 50,000 diesel transit vehicles with electric alternatives.

Furthermore, the initiative seeks to electrify a minimum of 20% of the nation’s school bus fleet, through a newly established program overseen by the Environmental Protection Agency.

Focus on American Jobs

A central tenet of the plan is the creation of well-compensated employment opportunities for American workers. However, legislative approval from Congress is still required before the plan can be enacted into law.