Biden's plan to replace government fleet with electric vehicles won't be so easy
President Biden's plan to replace the government's fleet of 650,000 cars and trucks with electric vehicles assembled by union workers in the United States is easier said than done.
Why It Matters: The populist “Buy American” message sounds good, but the vehicles Biden wants are a few years away and his purchase criteria would require an expensive overhaul of automakers' manufacturing strategies, let alone a fortune reversal handicapped for work organizers at Tesla and other non-union companies.
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Reality Check: Not a single model currently meets the President's criteria: battery-powered, made in America, by union workers.
Tesla makes the vast majority of electric vehicles in the U.S., and all models contain at least 55% American-made parts, according to federal data. But Tesla doesn't have a union, and CEO Elon Musk has broken federal labor laws.
General Motors' Chevrolet Bolt is the only US-built electric vehicle made by union workers. But it is mainly made with parts imported from Korea. Only 24% of the content is considered domestic.
The Nissan Leaf, another popular EV, is made in Tennessee. But the factory is not unionized and only 35% of the parts are domestic.
"Made in America" itself is confusing because the current rules for "domestic" content include parts that were made in both the US and Canada.
According to the American Automobile Labeling Act, passed in 1992, every car must have a label indicating where the car was assembled, what percentage of the equipment came from the US and Canada, and in which country the engine and transmission were built were.
The recently passed trade agreement between the US, Mexico, and Canada adds another level of rules on where parts come from.
Biden wants to change the entire system to determine if a federal vehicle is "American".
Today, the government requires federal vehicles to have at least 50 percent of their components made in America, but loopholes allow the most valuable parts, like engines or steel, to be made elsewhere, Biden told reporters Monday.
He wants a higher threshold and stricter rules that American workers would benefit directly from.
Be smart: it's all doable, but definitely not within Biden's four-year tenure.
"It just doesn't match," said Joe Langley, predictive analyst at IHS Markit. "The product is still a few years away."
And replacing 650,000 federal vehicles with electric vehicles would require increasing U.S. investment across the supply chain, including electric motors, batteries, and vehicles - all of which will take time, Langley said.
Union leaders are happy that Biden is focused on the future of the industry. "He sees new technologies as a way to expand our industry and our economy," a United Auto Workers spokesman told Axios.
Part of this investment is already taking place. For example, GM is overhauling several factories to make electric vehicles in Tennessee and Michigan. Ford will manufacture its upcoming e-transit van in Missouri.
But GM, Ford and Stellantis (the recently merged FiatChrysler and Peugeot) have only recently committed to building more electric vehicles in union factories in Canada.
And Ford is increasing production of its much anticipated Mustang Mach-E in Mexico.
What to See: There might be some surprise winners from Biden's plan.
A handful of well-funded EV startups like Lordstown Motors, Rivian and Workhorse are developing plug-in utility vehicles like vans and trucks - things that are often needed in government fleets.
"This could put the wind in a lot of new startups," said Langley.
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