Auto industry urges Biden to back comprehensive EV plan

Major automakers, parts companies and the United Auto Workers (UAW) union urged US President Joe Biden to support a "comprehensive plan" on electric vehicles and called for hefty government tax credits and numerous other financial incentives.

The requests, made in a six-page letter dated March 29, come as Biden is set to unveil on Wednesday a $3 trillion or more infrastructure proposal that could include significant support for manufacturing and charging electric vehicles (EVs).

The letter from the UAW and two major auto industry trade groups noted there are currently only 1.5 million EVs out of 278 million registered passenger US vehicles.

"We need a comprehensive plan that takes the present market realities into consideration," said the letter, which was seen by Reuters. "Neither the current trajectory of consumer adoption of EVs, nor existing levels of federal support for supply- and demand-side policies, is sufficient to meet our goal of a net-zero carbon transportation future."

The White House did not immediately comment on the letter.

John Bozzella, who heads the Alliance for Automobile Innovation that represents General Motors, Toyota , Volkswagen and others, noted EVs account for just 2% of US sales today.

"To fully transition is going to require an enormous effort across the economy in every sector," said Bozzella who signed the letter along with Motor & Equipment Manufacturers Association CEO Bill Long.

Some lawmakers and others are worried about the impact of the shift to EVs on auto jobs.

United Auto Workers Union President Rory Gamble, who also signed the letter, said in a separate statement to Reuters "workers will disproportionately suffer if we do not get it right. The reality is that we have a long way to go in terms of battery technology, refueling infrastructure and, importantly market demand in order to successfully make this transition."

Incentives

The letter urged Biden to back significant government tax incentives and subsidies for manufacturing and buying EVs and boosting federal government fleet EV purchases.

It called for government grants to automakers and suppliers "to reequip, expand, and establish facilities" for EVs and components and to "accelerate the domestic manufacture of batteries, power electronics (and) electric motors."

The letter encouraged developing "US- based supplies of critical minerals (extraction, processing, recycling), battery and fuel cell manufacturing" and new government efforts to boost hydrogen fuel-cell vehicles.

As a candidate, Biden pledged to invest $2 trillion in infrastructure spending, including fixing highways, bridges and airports; encouraging fuel-efficient vehicle manufacturing and installing 500,000 EV charging stations.

The letter noted there are currently 100,000 public charging outlets nationwide.

Some Democrats in Congress want Biden to follow California and set a target date to end gas-powered passenger car sales. California plans to end those sales in 2035.

Last week, a group of 71 US House Democrats urged Biden to set tough emissions rules to ensure that 60% of new passenger cars and trucks sold are zero-emission by 2030, while 10 US senators urged Biden "to set a date by which new sales of fossil fuel vehicles will end entirely."

Biden is currently reviewing the Trump administration's 2020 decision to roll back Obama-administration vehicle emissions standards.