Biden Pursues Boost in Electric Vehicle Sales: Analyzing the Viability of His Proposal

The Biden administration has unveiled ambitious plans to encourage the transition from gas-burning vehicles to electric vehicles (EVs) as part of its climate change initiatives. This shift, if successful, could significantly reduce carbon emissions and reshape the automotive industry.

Currently, only 0.36% of the 279 million vehicles on U.S. roads are fully electric, with 2020 seeing just 2% of the 14.5 million new vehicles sold being electric. However, the Biden administration aims to change this by spending $174 billion over eight years on EVs, including incentives for consumers, grants to build charging stations, and funding for U.S. supply chains for battery parts and minerals.

One of the key incentives proposed is a tax credit of up to $7,500 for those who buy new EVs. This credit, reminiscent of the 2009 "Cash for Clunkers" program, is aimed at boosting sales and making EVs more affordable for consumers. Senate Majority Leader Chuck Schumer of New York has also proposed large discounts for those who buy American-made EVs.

For used EV buyers, a tax credit of at least $1,250 is on the table. The Democrats on the House Ways and Means Committee are backing a bill that raises the electric vehicle sales cap for tax credits to 600,000. These incentives, if implemented, could help elevate EV sales from the projected 358,000 this year to over 1 million by 2023 and up to 4 million by 2030, according to predictions by Schuster.

The shift towards EVs is not without challenges. Despite battery costs declining, EVs are still more expensive than combustion vehicles. The Alliance for Automotive Innovation, an industry group, is urging the government to help address this issue. If Biden's plan succeeds and EV sales take off, shortages of computer chips, metals used to build batteries, and a lack of battery factory capacity could leave the industry falling behind buyer demand for a couple of years.

The benefits of this transition are clear. If every new vehicle sold were battery-powered, it would take about 15 years to replace the entire fleet. Each EV sold does cut emissions, although it could take a couple of years for an EV to reach that point if coal is used to generate power to recharge the vehicle.

President Joe Biden's plans for EVs are a significant step towards reducing carbon emissions and combating climate change. With the proposed incentives and investments, the U.S. could see a significant increase in EV sales, reshaping the automotive industry and paving the way for a cleaner, greener future.

On a related note, LMC Automotive predicts that 22 new electric models will hit the market this year, signalling a growing interest and commitment towards EVs from automakers. The electric vehicle revolution is underway, and it seems the U.S. is ready to embrace it.

Biden Pursues Boost in Electric Vehicle Sales: Analyzing the Viability of His Proposal