President Joe Biden announced on Monday that the U.S. federal government will transition its entire fleet of automobiles, trucks, and SUVs to electric vehicles produced domestically within the United States. This initiative is connected to a larger pledge to generate one million new employment opportunities within the American automotive sector and its associated supply networks.

Should this commitment come to fruition, it could significantly benefit U.S. vehicle manufacturers, especially those with a diverse range of vehicles including passenger cars, commercial vans, and light-duty trucks.

President Biden shared these remarks before formally signing the Made in America executive order, which establishes more stringent regulations concerning the federal government’s procurement procedures. Existing “buy American” provisions require a specific percentage of a product’s components to be manufactured in the U.S. to qualify for a federal contract.

The President stated that this order will eliminate existing loopholes and work to increase the acquisition of products created within the United States. The executive order raises the required percentage of domestic content and the price advantage given to domestically produced goods – effectively defining the price difference within which the government can procure a product from a non-U.S. supplier. It also revises the criteria used to determine whether a product is sufficiently manufactured in America.

During his address, President Biden specifically highlighted the application of the buy American directive to the federal government’s extensive vehicle fleet.

“The federal government possesses a substantial fleet of vehicles, and we are committed to replacing them with clean, electric vehicles manufactured here in America by American workers, thereby creating millions of jobs – a million jobs within the auto industry.”

This presents a considerable opportunity. In 2019, the U.S. government operated a fleet exceeding 645,000 vehicles, according to the most recent data from the General Services Agency. This total included approximately 224,000 passenger vehicles and over 412,000 trucks.

“GSA is dedicated to identifying ways to utilize the federal government’s purchasing and leasing capabilities to address the climate crisis, including making the federal fleet more environmentally friendly,” a GSA representative communicated to TechCrunch via email. “GSA currently oversees more than 224,000 passenger vehicles to support the Federal Government’s operations. By adopting clean energy vehicle technologies, GSA will contribute to the President’s climate objectives while collaborating with the American automotive manufacturing industry to ensure these next-generation vehicles are built in America by American workers.”

Successfully implementing this directive will not be without challenges. A significant portion of these federal vehicles are leased, which could potentially delay the transition based on the terms of existing contracts. Additional hurdles include the availability of charging infrastructure and sufficient supply. Furthermore, while not explicitly mandated, President Biden has repeatedly expressed his support for automotive jobs that are unionized.

Tesla is currently the leading U.S. manufacturer of electric vehicles. However, the company’s lack of union representation and the relatively high cost of its vehicles – even the more affordable Model 3 – could present obstacles.

While Ford and GM may not currently have a large inventory of electric vehicles, they both operate unionized facilities and are making substantial investments to broaden their range of EV offerings.

GM recently established a new business division focused on providing commercial clients with a comprehensive ecosystem of electric and connected products, as part of a $27 billion initiative to become a leading electric vehicle manufacturer. This new division, known as BrightDrop, will initially offer two primary products: an electric van, the EV600, with an estimated range of 250 miles, and an electric pallet, the EP1.

GM has announced plans to introduce 30 new electric vehicles to the global market by 2025. The automaker stated that over two-thirds of these launches will be available in North America, and every GM brand – including Cadillac, GMC, Chevrolet, and Buick – will be represented.

Meanwhile, Ford unveiled a customizable all-electric cargo van, the E-Transit, in November as part of its $11.5 billion investment in electrification. Ford has primarily concentrated its electrification efforts on the consumer market, particularly with the Mustang Mach-E. The E-Transit, which will be manufactured at its Kansas City Assembly Plant in Claycomo, Missouri, is targeted towards the commercial sector.

A growing number of new EV companies are also emerging, including Rivian, Lordstown Motors, and Fisker. Rivian is anticipated to begin production and delivery of its electric pickup truck in July, followed by its all-electric SUV. Rivian is also developing and assembling electric vans for Amazon.

President Biden’s commitment to transforming the fleet aligns with pledges made throughout his campaign. He promised to “utilize all available tools of the federal government,” including procurement power, research and development, tax policies, trade regulations, and investment strategies, to position the U.S. as the global leader in the production of electric vehicles, as well as their components and materials.