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Biden’s goal is to sell well, but will his plan work?

DETROIT (AP) – Hanging tax credits and discounts in the fight against climate change. President Biden wants you to replace your gas-burning car, truck or SUV with a zero-emission electric car.

Some buyers find his offer convincing. But Biden’s goal is frightening. Even if Congress approves its $ 2.3 trillion infrastructure program, with its encouragement, it would take many years to replace enough internal combustion engines with EVs to cause huge damage to the throttle emissions.

There are currently about 279 million vehicles on the road in the United States. The proportion of all-electric, according to IHS Markit, is 0.36%. Of the 14.5 million new vehicles sold last year, 2% were all electric.

Even if every new car sold had a battery that no one could have imagined, it would take about 15 years to get the whole fleet out. Moreover, cars built in the last two decades last much longer than previous cars, so buyers keep them longer. The average U.S. vehicle has been on the road for about 12 years.

Studies show that every electrician sold reduces emissions. But it can take several years for an EV to reach that point if coal is used to charge a car. This was stated by Bruce Belzowski, a retired transport researcher at the University of Michigan who runs a company researching the future of the automotive industry.

“If you do not start somewhere, you will never get anywhere,” said Belzowski. “Every electric car you sell will be purely positive for the environment.”

The Biden administration did not specify how much car buyers would receive from their vehicles. But it plans to spend $ 174 billion on power plants over eight years. That figure includes incentives for consumers, grants to build a $ 500,000 refueling station, և money to make batteries, զարգ to develop US supply chains for minerals.

“We’re going to provide tax incentives and point-of-sale discounts to all American families,” Biden said Wednesday.

The biggest boost is likely to be the expansion of the electric vehicle tax credit, now $ 7,500, which is gradually being phased out after the automaker sells 200,000-battery electric vehicles. Tesla և General Motors exceeded the limit. Nissan is approaching.

Biden’s program summary had no numbers. House Democrats’s Committee on Roads և Means, however, support the bill, which would raise the threshold to 600,000. The bill also includes a tax credit of at least $ 1,250 for those who buy a used BS.

FFF Schuster, head of global forecasting at LMC Automotive, an industrial consulting firm, said either the administration did not yet have clear figures or deliberately left them out while negotiations were under way between the automotive industry and Congress’ environmental groups.

“They know that some level of compromise is needed,” he said.

The value and size of the values ​​were also not presented in detail. But New York Senate Majority Leader Chuck Schumer has offered big discounts to those who buy American-made power plants. A possible repeat of the 2009 Cash for Clankers program, which offered a $ 4,500 discount for people shopping for less efficient vehicles.

Recharges և charging stations address two main reasons why many consumers are wary of switching to electric vehicles, Schuster said. Together, he predicts that incentives will help increase EV sales this year from about 358,000 by 2023 to 1 million և by 2030 to 4 million.

If Biden’s plan succeeds, և selling power supplies, computer chips, metals used to build batteries և the lack of capacity of the battery plant could leave the industry behind buyers for at least a few years, Schuster said.

David Kirsch, a professor of strategy and entrepreneurship at the University of Maryland, says Biden’s plan is not really a turning point in turning consumers into electric cars.

“There will be some good changes that will happen because of the scale of this investment, they should not be minimized,” Kirsch said. “I think electrification is the same, it was coming”

Indeed, the industry was already spending billions to develop EVs. LMC Automotive reports that 22 new electric models will be released this year. A 2018 study by Alix Partners has shown that the global auto industry will spend $ 255 billion on EVs by 2023.

At the same time, for the “Alliance for Automotive Innovation”, an industry group representing General Motors, Ford, Toyota – the largest automakers, wrote in a letter to Biden that despite the reduction in battery costs, EVs are even more expensive are more than burning cars. The group, which is joined by the United Auto Workers Union and the Parts Supply Association, is urging the government to help resolve the dispute. It seeks tax credits, research costs, and requirements to replace the federal navy with electric vehicles.

Even with such increased costs, people will generally drive fewer cars in the future, as many companies will be able to combine work with home-office work as a result of the epidemic. That will make some people even more reluctant to change their cars, Schuster said.

Kirsch says that no matter how effective Biden’s plan is in tackling climate change, spending on fleet and infrastructure upgrades is long overdue.

“What we are doing is making long-term deferred investments,” he said.

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