Biden’s Economic Plan for EVs and Tesla

Last Updated on April 14, 2021

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In the fact sheet released on March 31 presenting President Joe Biden’s plan, several important initiatives were outlined that will improve the country’s infrastructure for electric vehicles, paving the way to compete with China, and incentivizing the manufacture and purchase of electric vehicles.

According to Energy.gov, electric vehicles reduce emissions that contribute to climate change and smog, as fewer vehicles relying on gas fill roads and send harmful exhaust into the atmosphere. EVs improve the health of the public and reduce ecological damage, and charging vehicles with solar or wind power minimizes, even more, the threat fossil fuel emissions place on the planet.

Despite the benefit of EVs, the U.S. market share of plug-in EV sales is a third of the Chinese EV market. Business Wire reports that the “1.3 million EVs sold in China in 2020 represented 41% of global EV sales” while US EV sales only represent 2.4% of global sales in 2020. That gap showcases a very real dilemma within the United States’ support of electric vehicles, indicating a need for change. Thanks to Biden’s revitalization plan, it will.

Biden is proposing a $174 billion investment, which will be used to incentivize automakers to utilize domestic supply chains, American workers for battery manufacture, and retooling factories to compete on the global market. The budget will also work to give a point-of-sale rebate to consumers of EVs and tax incentives (as long as the EVs are American-made). This plan directly counteracts recent history that has looked to foreign powers for manufacturing. According to the fact sheet, “public domestic investment as a share of the economy has fallen by more than 40 percent since the 1960s.” The plan is a two-pronged approach, dealing with America’s economic and environmental crises.

An article by Barrons speculates that a lot of the $174 billion budget will end up building a stronger infrastructure for EVs, such as finding solutions for charging the vehicles. This means creating more available charging stations, especially those charged by solar and wind power. The fact sheet claims that the budget will work towards establishing grant and incentive programs for the private sector, alongside state and local governments, to ensure that infrastructure is ready and available for EV owners. The plan seeks to have 500,000 EV chargers by 2030.

The plan does not stop at EVs for private use, however, as the fact sheet indicates that 50,000 diesel transit vehicles will be replaced by electric options, and 20 percent of U.S. yellow school buses will be clean, electric counterparts to the traditional gas-powered buses.

The main issue with EVs is that they may just add to the environmental problems and even cause many more unless renewable energy is the main source of charge. If fossil fuel electricity is what powers the proposed 500,000 charging stations, the problem has just been recircuited back into the U.S. environment. Unfortunately, the fact sheet does not explain how the country will improve its solar and wind power. If the charging stations are going to rely on fossil fuel energy, then all this does is slightly reduce ecological footprints, but doesn’t solve the drastic problem.

Overall, the plan does outline a promising tactic to increase EV sales in the United States, creating an internal economy as well. In 2020, only 300,000 plug-in EVs were sold, while over 3.4 million cars were sold in total. That doesn’t include a combination of car and light truck sales, which was between 14 and 15 million. Biden’s plan looks to counter this obvious problem and make electric the more desired vehicle. In essence, the plan looks like it will do just that.