For much of his campaign, President Joe Biden used his pulpit to advocate the switch to electric vehicles, and now he appears to be putting federal money where his mouth is.
The president said Monday that the federal government will be strictly adhering to a century-old rule requiring the purchase of materials, equipment and goods to be made from American companies whenever possible, not-so-subtly shading the Trump administration for allowing for too much flexibility with that mandate.
This news is music to the ears – and potentially dollars in the coffers – of U.S. automakers that produce electric vehicles, like Tesla and General Motors, and soon Ford as well as other nascent EV makers, such as Rivian, Lordstown Motors, Lucid Motors and more.
In 2018, the federal government spent nearly $300 million on “foreign engines and on vehicles instead of buying American vehicles and engines from American companies, putting Americans to work,” Biden said during the announcement.
This mandate provides Biden the chance to make good on another campaign promise to convert the U.S. government fleet to electric vehicles. It’s uncertain if that means just battery electrics or a mix of plug-ins as well as hybrids. How long it will take to complete the switch isn’t known either.
The U.S. government fleet had 645,000 vehicles in 2019, the U.S. Postal Service accounting for 35% of that total. Those government cars, trucks and utility vehicles rolled up 4.5 billion miles and consumed 375 million gallons of gasoline and diesel fuel, according to the General Services Administration.
Although the idea of the federal government coming with its big checkbook at the ready seems ideal, both sides face a real dilemma in the near term: what’s available?
“The current offerings are pretty slim, but the industry’s about to unleash an avalanche of new product, and a lot of it built in North America,” Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, told CNBC. “Just about every U.S. plant is going to have a hybrid or electric product.”
If Biden were to begin purchasing EVs to drive right now, he’d be limited to the Tesla line-up and the Chevrolet Bolt EV, but even those can’t be purchased in large numbers — especially Tesla vehicles. However, there are some offerings in the near future – by the end of this year and early 2022 – that could prove to be viable for government use, especially vehicles like Rivian’s new delivery van, Ford’s Transit EV and down the road GM’s BrightDrop delivery truck.
Other agencies will be in the market for pickups and SUVs, which opens up possibilities for the just-mentioned trio above, as well as Lordstown, Bollinger Motors, Tesla and others.
In fact, the post office was in the market for an electric delivery truck to replace its past-its-prime model from Northrup Grumman, but pushed back the deadline for official bids last year due to the COVID-19 pandemic.
The USPS was looking to replace as many as 200,000 vehicles with the new bid. Since Amazon, which is working with Rivian on the new electric van, relies on the post office to handle so many of its deliveries, there may be some synergies there.
In the meantime, Biden is also working on another goal of creating 1 million new jobs for the auto industry and electric vehicles are the centerpiece of that effort.
“I don’t buy for one second that the vitality of the American manufacturing is a thing of the past,” Biden said. “That means we are going to use taxpayers’ money to rebuild America. We’ll buy American products and support American jobs, union jobs.”
In addition to a potential “cash for clunkers” style plan to encourage an increase in EV sales, he’s looking to help alleviate some of the anxiety about charging by pledging to have more than 550,000 new charging stations in place in the next decade.