President Joe Biden will set a new national target for the adoption of electric vehicles on Thursday, calling for them to represent 40% to 50% of all new auto sales by 2030, according to senior administration officials.
The target is expected to be supported by companies such as General Motors, Ford Motor, Stellantis (formerly Fiat Chrysler) and other automakers. Executives from each of the Detroit automakers are scheduled to attend an event Thursday at the White House.
The Biden administration also is expected to announce proposed federal fuel economy and emission standards through the 2026 model-year that build on California’s tougher regulations, the officials said. The proposed standards are subject to a public comment period and final approval.
While automakers have increasingly been supportive of EVs, they’ve been mixed on near-term fuel economy standards, as they attempt to rake in profits from traditional vehicles to fund electric models. EVs have historically been unprofitable or produce lower profit margins.
It’s unclear how many automakers will support Biden’s fuel economy standards. Automakers such as Ford, Honda Motor and Volkswagen previously agreed to California’s tougher standards, which the Trump administration adamantly opposed
Some smaller brands such as Volvo plan to go all-electric by 2030, while Stellantis and Ford have announced goals in-line with Biden’s order of at least 40% EVs by then. GM earlier this year announced an “aspiration” to exclusively offer all-electric and fuel-cell vehicles by 2035.
“Today, Ford, GM and Stellantis announce their shared aspiration to achieve sales of 40-50% of annual U.S. volumes of electric vehicles (battery electric, fuel cell and plug-in hybrid vehicles) by 2030 in order to move the nation closer to a zero-emissions future consistent with Paris climate goals,” the automakers said in a joint statement. “We look forward to working with the Biden Administration, Congress and state and local governments to enact policies that will enable these ambitious objectives.”
Jessica Caldwell, executive director of insights at auto insights firm Edmunds, said the EV sales goal isn’t “particularly over ambitious” but it will ultimately depend on regulations and consumer adoption, which remains low.
“Automakers are all making aggressive plays in this category,” Caldwell said. “However, what we’ve seen over the past five years or so is these targets tend to be moving targets, not solid targets. All of it is more fluid than actual plan.”
A previous goal of the Obama administration to sell 1 million EVs from 2012-2015 fell far short of expectations. In January 2016, Reuters reported only about 400,000 electric cars had been sold.
The U.S. is the third-largest market for EVs in the world. While total new car sales were down by 23% in 2020 to about 14.6 million units, sales of all-electric vehicles fell by 11% to 295,000 units, according to IHS Markit.
Senior administration officials with the Biden administration touted the adoption of EVs and executive order as a job stimulator for American manufacturing. They said the new actions will support Biden’s “Build Back Better Agenda” and the bipartisan infrastructure deal.
Officials with the United Auto Workers, which represents hourly union workers at the Detroit automakers, have not been so convinced of EVs spurring American jobs.
A 2018 study by the union found that mass adoption of EVs could cost the UAW 35,000 jobs, but officials have said that number could be less now. EVs require far fewer parts than those with internal combustion engines, which means potentially fewer factory assembly jobs. A lot of the parts for EVs are made outside of the U.S. or at domestic plants where workers are paid far lower wages than traditional assembly jobs.
In May, IHS Markit forecast U.S. all-electric sales to be between 25% and 30% of new vehicles in 2030 and 45% to 50% by 2035.