January 30th, 2021 by Johnna Crider
President Biden aims to help Tesla, GM, Ford, and other automakers sell more electric vehicles (EVs), which is crucial if we want to reduce the impact of greenhouse gases in our atmosphere. These gases largely come from the transportation industry, and by replacing diesel and gas vehicles with battery-electric vehicles, we can cut them out while taking a major step toward cleaner air.
CNBC noted five ways that President Biden could impact these companies — especially Tesla and GM. I’m going to list those five ways here and share my own thoughts about them.
1. Corporate Average Fuel Economy (CAFE) Standards
These standards were designed to encourage automakers to increase the fuel efficiency of their vehicles. By doing this, they reduce our nation’s dependence on fossil fuels. Unfortunately, President Trump rolled back the standards set during the Obama administration.
Originally, automakers were supposed to increase their fleets’ fuel efficiency by 5% annually between 2021 and 2026. President Trump rolled that back to an incredibly low 1.5%. CNBC noted that Biden made a promise to “establish ambitious fuel economy standards” and to also work with environmental groups, automakers, and other parties who are involved.
The article also emphasized that if these standards are reestablished and/or increased with a focus geared toward EVs, it could become the driving force that encourages automakers to move faster at transitioning to all-electric vehicles. I fully agree with that and believe that even though Trump did considerable damage during his term in regards to air pollution and blocking innovation, President Biden will most likely remove that block while increasing the pace.
2. Cash for Clunkers
The article mentioned that President Biden supports a “cash for clunkers” rebate program which would encourage Americans to upgrade their old vehicles for new EVs. President Obama launched the Car Allowance Rebate System (CARS), which included a credit of up to $4,500 for those trading in older vehicles for new and more fuel-efficient ones. This program aimed to stimulate the economy during the Great Recession in 2009. A new version of this with an EV focus from Biden would help accelerate the transition.
I think a cash for clunkers program is critical if we as a nation want to take the adoption of electric vehicles seriously. One thing I would like to see is this applied to used vehicles as well. For example, selling an older car to buy a used EV. Why? Simply because many people are struggling and the idea of buying a brand new vehicle is daunting.
3. Tax Credits
Currently, anyone buying an EV, or even a plug-in hybrid, can get a federal tax credit of up to $7,500 unless they are buying from Tesla or GM. Remember last year when Trump killed the EV tax credit extension? That was for both Tesla and GM, who have hit the threshold of 200,000 EV sales and had their credits (which go directly to consumers) phased out, the only automakers to do so in America.
Republicans in Congress and the White House didn’t want consumers to benefit from the credit, because they believed that it benefitted “rich Californians and Tesla.” This is really sad, because it showed that the previous administration didn’t support its own economy — something we saw over the course of 2020 as millions of Americans became unemployed, hundreds of thousands died as a result of a pandemic, and the Republican-controlled government did almost nothing to help.
I think that President Biden could modernize the EV tax credit to not only benefit Tesla and others automakers selling EVs, but also perhaps increase the amount given depending on the income of the person buying an EV. For example, if someone is purchasing a Nissan Leaf and only makes $36,000 a year, increasing the credit from $7,500 to $9,000 would help and would encourage more sales of the Nissan Leaf.
That is just an example, but the point is to encourage those who are in the market for a car but have a smaller budget to choose an EV that is in their range over an ICE vehicle. It would definitely help push the transition from ICEVs to EVs and encourage automakers to focus more on EVs.
4. Infrastructure
President Biden has promised a $400 billion public investment in clean energy. Part of this plan will include government spending to support EVs with an aim of having 500,000 new EV charging outlets by the end of 2030.
By installing Superchargers for its vehicles, Tesla established the backbone of its own success. Superchargers, if you will, are the bone structure of Tesla’s success for its EVs. Although Tesla owners mostly charge at home or at work, the idea of a Supercharger nearby not only gives one the confidence of being able to charge anytime, anywhere — the network makes it possible to easily take road trips. This is not as easy for those who own EVs made by other brands.
Yes, there are charging stations for other EVs, but each company has its own pricing and these stations are not as commonplace as Tesla Superchargers.
A stronger EV infrastructure for everyone will help reduce range anxiety and some of the FUD surrounding EVs while supporting those who make the switch.
5. Stimulus
CNBC noted that the U.S. government has subsidized companies through loans and tax breaks many, many times. Tesla borrowed $465 million back in 2010. The loan was from the Energy Department’s Advanced Technology Vehicle Manufacturing program in January of 2010. In 2013, Tesla repaid the loan back with interest — nine years before the repayment of the loan was due.
I want to add something here regarding stimulus. I think that a special stimulus program for families in the market for a car — new or used — should be created. To qualify for stimulus aid in buying the car, the vehicle would have to be an EV. For a used car, it would have to be either an EV or an extremely low-fuel-efficiency vehicle. It is important to help people who are struggling to switch from using older cars that are much worse for the environment to get EVs.
Also, instead of seeing cars as a luxury item, which for me is how I was taught to see them, we should focus on education of why it is important to buy an EV rather than an ICE vehicle.
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About the Author
Johnna Crider is a Baton Rouge artist, gem and mineral collector, member of the International Gem Society, and a Tesla shareholder who believes in Elon Musk and Tesla. Elon Musk advised her in 2018 to “Believe in Good.” Tesla is one of many good things to believe in. You can find Johnna on Twitter at all hours of the day & night.
