US to set electric-vehicle sales goal of 50% by 2030

General Motors Co., Ford Motor Co., and Chrysler maker Stellantis NV said their commitment hinges on federal funding for manufacturing and supply-chain research and development, purchase incentives and a national electric-vehicle charging network.

Leaders of those companies and the United Auto Workers are set to attend a White House event Thursday afternoon, where administration officials will also announce tougher fuel-efficiency standards.

The fleet standard was set at an average 54.5 miles per gallon under the Obama administration, but cut to 40 mpg by former president Donald Trump.

The shift to electric vehicles will help auto makers reach those higher fuel-efficiency standards. But in a joint statement, the companies said the voluntary targets for electric-vehicle sales “can be achieved only with the timely deployment of the full suite of electrification policies committed to" by the administration in the roughly $1 trillion infrastructure plan now moving through the Senate and related initiatives.

The Senate infrastructure spending bill allots $7.5 billion in grants for states and municipalities to build out vehicle charging stations. That amount is half of the sum that President Biden pushed for in March when he set a goal of 500,000 public chargers by 2030. The U.S. has roughly 110,000 public charging stations now.

The bipartisan Senate proposal also includes more than $6 billion in grants for battery production, development and recycling.

The proposal doesn’t include a key item that the industry has pushed for: additional tax credits for people who purchase electric vehicles. The administration is still working with Congress on the consumer-side tax credits, White House economic adviser Susan Helper said earlier this week.

Electric-vehicles sales made up about 3% of the total U.S. market in May and June, according to industry data. The auto makers said their commitment was to have electric, fuel-cell and plug-in hybrid vehicles account for 40% to 50% of sales by 2030, saying the action “represents a dramatic shift from the U.S. market today."

Biden administration officials, however, said the president plans to sign an executive order setting a voluntary target of 50%.

Wall Street analysts said that the large-scale shift to electrification is likely to weigh on profits for legacy auto makers over the next few years.

“The chances this industry can smoothly ‘pass the baton’ from ICE to EV without a major disruption in margins is remote," Morgan Stanley analyst Adam Jonas wrote in a Thursday note, referring to internal combustion engines.

A notable absence from the White House ceremony will be Elon Musk, chief executive of Tesla Inc., which sold the vast majority of all-electric vehicles in the U.S. over the past few years.

“Seems odd Tesla wasn’t invited," Mr. Musk wrote in an overnight tweet.

Administration officials declined to comment on Tesla’s absence.

One possible explanation, analysts say, is that Tesla is a nonunion shop. The Detroit auto makers attending the White House event have production workforces represented by the UAW.

“The president has said from Day One that he is interested in promoting good union auto jobs, and there’s only three auto makers that have unionized workforces," said Kristin Dziczek, a senior vice president at the Center for Automotive Research.

In a statement released by the White House, UAW President Ray Curry said the president’s initiatives will “bring more certainty and better planning for the auto industry and UAW member future jobs."

Consumers have begun warming to electric vehicles, and auto manufacturers are laying heavy bets on the new technology.

“This industry’s going to spend $330 billion over the next five years on electrification alone," said John Bozzella, president of the Alliance for Automotive Innovation, the lobbying group for auto makers and suppliers, at a conference Wednesday. “Even in Washington, D.C., that is real money."

Many of these investments are going toward converting plants to make electric vehicles or building battery factories. GM plans to open battery plants in Ohio and Tennessee as part of its joint venture with Korean battery company LG Chem.

The speed with which U.S. auto makers pivot to electric-vehicle manufacturing could shake up the auto labor force. Engines built for electric vehicles don’t require as much labor. Several major auto makers have pulled back investment in developing new gasoline engines.

Some environmentalists say the voluntary targets don’t go far enough in transitioning to electric vehicles, saying stronger measures are needed to curb greenhouse=gas emissions that contribute to climate change.

The plan “relies on unenforceable voluntary commitments from unreliable car makers," said Dan Becker, a longtime environmental advocate for clean transportation now serving as director of the Safe Climate Transport Campaign of the Center for Biological Diversity, a nonprofit environmental advocacy group. “These are the companies that tore up the agreement they made with President Obama to cut pollution, so why would anyone trust them now?"

Other auto makers joined in supporting the administration’s efforts. In a joint statement released by the White House, BMW AG, Honda Motor Co., Volkswagen AG and Volvo AB said they “remain committed to leading the industry in fighting against climate change."

“That’s why we support the Administration’s goal of reaching an electric vehicle future and applaud President Biden’s leadership on reducing emissions and investing in critical infrastructure to achieve these reductions," the statement said.

A senior administration official told reporters that the electric-vehicle sales goal represents an ambitious step in making the U.S. automotive industry a leader in electric vehicles.

“A decade ago, we were talking about reaching around 50 miles per gallon of gasoline in 15 years," the official said. “Today for new autos, we are talking about reaching around 50% of vehicles that don’t require even one gallon of gasoline to go a mile in less than a decade. This is a paradigm shift."

This story has been published from a wire agency feed without modifications to the text