President Biden’s initial executive actions and policy priorities are focused on a range of critically important issues to the auto industry. Biden has proposed an ambitious federal response to the COVID-19 pandemic and economic recovery efforts and seeks to address the issues of racial equity, worker rights, and climate change in nearly every aspect of government policy.

During the campaign, Biden pledged to create a million new jobs in the American auto industry, supply chains, and infrastructure. Recently, the President spoke about the link between climate change and jobs:

When I think of climate change, I think of — and the answers to it — I think of jobs. A key plank of our Build Back Better Recovery Plan is building a modern, resilient climate infrastructure and clean energy future that will create millions of good-paying union jobs — not 7, 8, 10, 12 dollars an hour, but prevailing wage and benefits.

—President Biden, Remarks on 27 January 2021

President Biden also strongly supports the industry’s shift toward electrification, and his early Executive Orders reflect his goal of a U.S.-built, union-made, electrified vehicle future.

• On Day One of his Administration, the United States rejoined the Paris Climate Agreement.
• The President signed EO 13990: Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis. This Order:
  • Directs an agency review to establish “ambitious, job-creating fuel economy standards.” The review of the “The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program is expected by April 2021. The review of the Rule for Model Years 2021-2026 Passenger Cars and Light Trucks is due by July 2021. This Executive Order directs agencies to consider the views of “representatives from labor unions, States, and industry” in considering action to suspend, revise, or rescind the 2021-2026 fuel economy rule issued in April 2020.
  • Establishes the Interagency Working Group on the Social Cost of Carbon (SCC). The group must issue interim estimates of the social cost of carbon, nitrous oxide, and methane within 30 days of 20 January 2021. The Working Group must issue final estimates of these social costs by January 2022 and recommend revised methods for calculating these costs by June 2022.
• Biden issued EO 14008: Executive Order on Tackling the Climate Crisis at Home and Abroad that, among other actions, establishes the White House Office of Domestic Climate Policy and an interagency National Climate Task Force. This Order also establishes a Federal Clean Electricity and Vehicle Procurement Strategy that aims to move the United States to a carbon pollution-free electricity sector by 2035 and turn over the Federal, State, local, and Tribal government fleets to clean and zero-emission vehicles. Additionally, the plan is supposed to ensure the retention and creation of union jobs to manufacture the vehicles and run and maintain clean and zero-emission fleets. This Order also directs the Office of Management and Budget to eliminate fossil fuel subsidies from future Federal budgets.

During the campaign, President Biden also pledged to invest in 550,000 electric vehicle chargers, provide expanded consumer incentives for middle-class Americans to buy U.S.-built electric vehicles, strengthen U.S. supply chains for critical technologies and raw materials, and set new fuel economy and greenhouse gas emissions regulations for model years 2026 and beyond.

The Biden Administration sees climate change as an existential threat. The President wants to accelerate the industry’s planned transition to electrification using “carrots” in the form of planned investments in clean energy, charging infrastructure, EV and battery R&D, U.S. manufacturing, and EV purchase incentives, and “sticks” in the form of more stringent fuel economy and greenhouse gas emissions regulations. This Administration has also sent a strong signal that achieving the country’s climate goals must also achieve their goals for “Made in America” and expanded labor rights. Automakers and suppliers will likely see these three goals—climate change, increased domestic manufacturing, and worker rights—embodied in future Federal government grants, loans, and contracting opportunities.

 

 

In the weeks to come, CAR will review how Biden’s labor, trade, and infrastructure policy priorities may impact the auto industry.