By on March 30, 2021

With President Biden planning to announce an infrastructure proposal that could easily exceed $2 trillion, the automotive industry has come to the realization that some of that money could be used to make its job easier. Following Tesla’s attempt at charming the federal government into making carbon credits more valuable, automotive lobbies, supplier groups, and the United Auto Workers (UAW) union have issued a joint letter asking for financial assistance.

Addressed to the president and congress, the document makes numerous requests for help with electric vehicle adoption rates. Industry groups would like to see Biden sign onto significant government tax incentives and subsidies for both buying and manufacturing electric vehicles. But this isn’t limited to passenger cars, they also want tax dollars used to help offset the prices corporations pay on commercial EVs intended for fleet use. Government grants would likewise be set aside for organizations that retool facilities for electric cars, while federal entities make a vow to buy up new fleets that aren’t reliant on liquid fuel. 

The letter — available for your perusal here — was signed by Alliance for Automobile Innovation CEO/President John Bozzella, UAW President Rory Gamble, and Motor & Equipment Manufacturers Association CEO/President Bill Long.

One of the biggest issues among its authors was the low number of EVs currently on American roadways. Despite 4-wheeled electrics having technically been around since 1832, the letter notes that only about 1.5 million of the 278 million passenger cars registered in the United States are battery-driven. They felt that could be improved via the aforementioned subsidies and a comprehensive federal education program designed to sway the public perception.

While we’re not particularly enthralled with the idea of the state advertising for automakers that it’s also funneling money into, there were some more reasonable suggestions. The document makes mention of the importance of the U.S. finding ways to procure, process, and recycle the materials necessary for battery production — noting that most of that work is currently being done in Asia. It also acknowledges the charging infrastructure isn’t currently at a point where all drivers can realistically expect to use EVs without making huge compromises regardless of where they live. The letter estimated that there are currently 100,000 public charging outlets nationwide and speculated that figure would need to surpass the 500,000 Biden proposed while campaigning for there to be mainstream acceptance. Obviously, the lobbying groups would like to see the Biden infrastructure plan spending some of the money set aside for bridges and roadways on setting up a more robust charging network.

But the UAW, which saw its leadership signing onto the general premise of the letter, has signaled fears that mishandling EV promotion could ultimately cost American jobs. This has been happening with unions operating in Europe as well since many are under the impression that jobs will be lost as electrification becomes more dominant. EVs require fewer moving parts to build and, with so much of the battery work being done in other regions, some unions have become very worried.

Interestingly, the document sent to the White House and congressional leadership blatantly states that the market is lagging behind their desired results. But it posits that the problem can be socially engineered — ultimately providing an opportunity for the nation to enhance its global competitiveness and economic security.

“Neither the current trajectory of consumer adoption of EVs, nor existing levels of federal support for supply- and demand-side policies, is sufficient to meet our goal of a net-zero carbon transportation future,” read the letter.

Biden is expected to release his infrastructure plan (which many are now claiming will exceed $3 trillion) on Wednesday.

[Image: Whitehouse.gov]

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36 Comments on “Automotive Industry Begs U.S. Government for Money...”


  • avatar
    Cicero

    Billions or trillions (is there really a difference anymore?) in taxpayer money will be spent to develop and promote a technology that can’t turn a profit because nobody wants to buy it.

    I’m not sure whether to have more contempt for the rent-seeking sleazes with their hands out or a federal government that is run by criminals and idiots.

    • 0 avatar
      ThomasSchiffer

      This is precisely how I feel about the EU[SSR] and our eternal Dear Leader Merkel. Well said.

      • 0 avatar

        She is just the part of the plan of destruction of Western civilization. There are a lot of conspiracy theories in blogosphere but the demise of Roman Empire is the fact so history has to repeat itself again. And this time the Roman Empire is US and its European allies.

        • 0 avatar
          slavuta

          ILO,

          are you saying US is western Roman empire and EU is Eastern Roman empire. Russians are Goths and Central Americans are Sueves?

          • 0 avatar

            No, Eastern Roman empire is Russia – 3rd Rome. Rome originally was a Republic established by ethnic Romans. They had unwritten constitution that they followed. Then Rome become global power with diversified population most of which were not ethnic Romans but freeloader all over the world. Constitution was thrown away a money and legion’s loyalty decided everything. Guess on which side billionaires and Legions in Washington are.

        • 0 avatar
          slavuta

          Fair enough. And totally comparable.

    • 0 avatar
      brn

      Trillion is such a large number that people can’t really comprehend it. I know I can’t. Now if we break it down, that comes to about $13,500 per taxpayer. All you taxpayers, can I get $13,500 every time the feds want to spend a couple of trillion? That $1400 check doesn’t provide very much bang for the buck now does it?

    • 0 avatar
      slavuta

      What technology, what development? This is straight Solindra way. Money being print, why not grab some if you can.

      With PPP, you could open a business that does nothing. Hire employees that do nothing and ask for money. People did this.

  • avatar
    28-Cars-Later

    Clown World Overdrive.

  • avatar
    dusterdude

    I know there is an etiquette policy , so I’ll just say are you &@$”@& kidding me ??!!

  • avatar
    Kendahl

    Biden said the feds were going to switch their fleet over to electric. That should be enough pork for the auto manufacturing industry. Where we need to spend major money is repair of dilapidated roads and bridges.

  • avatar
    Master Baiter

    According to the IPCC, climate change will only lower worldwide GDP by 2% (from what it would have been otherwise) by 2075. So, what the hell are we doing here?

  • avatar
    jmo

    China is offering its auto industry and consumers thousands of dollars in incentives per unit and a million other things to make sure China’s industry stays on top of EVs. You’re asking a lot of American industry to compete against China without subsidies of their own….

    In an ideal world neither China or the US would offer subsidies. But if they do our domestic manufacturing will suffer without an equal level of support.

    For all the arm chair libertarians it’s fine to not have subsidies in your libertarian utopia. But if America is going to compete with the world as it exists, we need to play the game. The CCP isn’t going to let up any time soon.

  • avatar
    Chocolatedeath

    They had me until the social engineering thing. So basically they are either going to create an artificial need for a product or go the way of Apple and….well create an artificial need for a feature.

    I can imagine the conversations now. Ford: we have stopped selling the Fusion due to only selling less than 5k this year. We had to stop selling it cause noone was buying it. Ford: we are also going to stop selling the Edge in 3 years due to poor sales and not being able to sale more than 110k in 2020. We will replace both with electric SUV things with compromised ranges.

    IMO if the US wants to sell more EV’s then give a high output charger in the households that buy them and the OEMs should pay for it not the gov. If the gov wants to continue the 7k tax credit I am ok with that but the OEMs should be responsible for something financially other than showing up.

  • avatar
    Freddie

    If we accept the premise that consumers need to be nudged into buying eco-friendly vehicles…

    Then instead of dictating and subsidizing a particular technology, simply impose a sliding scale tax or rebate based on EPA MPG. For example, pick 30 mpg as the neutral point, taxes on vehicles below 30 MPG would finance rebates for vehicles above 30 mpg.

    • 0 avatar
      SPPPP

      This would be a good idea! But where is the massive bureaucracy, the control by fiat, the opportunity for fascist public-private cash grabs? Without those, how would it ever pass?

  • avatar
    Steve Biro

    Who pays for the chargers away from people’s homes? That’s another good area to push the money. A whole lot of people don’t own houses and apartment and condo parking lots can’t accomodate many chargers even if every space has one.

  • avatar
    SCE to AUX

    No more.

    This is what the American Recovery and Reinvestment Act (ARRA) of 2009 was supposed to achieve, which launched the $7500 Federal subsidies for EVs.

    Every mfr has had opportunity to make use of this for *12 years*. Market acceptance and product offerings are growing nicely.

    So, would Tesla and GM be brought back into the fold of another consumer handout? That would be pretty unfair, as their 200k sales thresholds under the 2009 law have sunsetted.

    • 0 avatar
      Chocolatedeath

      I personally still am not sold on EVs and I agree with you about being unfair but hear me out. What if they did the ARRA for everyone again but with three caveats.
      1. Tesla and GM only get 100k more sales each
      2. Everyone else gets an extra 100k more sales on top of whatever they have left.
      3. Only on vehicles that cost less than 45k and can go atleast 275 miles on a single charge.
      I know the last one is a stretch but its what I came up with.

      • 0 avatar
        SCE to AUX

        @Chocolatedeath:

        Those aren’t terrible ideas if the government wants to keep the party going. Having leased two EVs since 2012, I’ve benefited from the subsidy two times, with the mfr applying the discount to my lease, with no tax impact for me. (Nissan, then Hyundai).

        Still, I’m politically opposed to the subsidy. The basic problem is that mfrs want someone else to pay the billions for their EV programs, while they’ve dawdled for the last decade. A second problem is that – for many good reasons – Americans have been slow to warm up to EVs.

        • 0 avatar
          Chocolatedeath

          For me its less political and more I just dont like large corporations getting welfare from the gov and then complain that their profits are down but give out dividends and raises to the highest paid.

    • 0 avatar
      Oberkanone

      Infrastructure tax on EV is appropriate. Mechanism to pay for usage of roads and other related infrastructure is necessity.
      End the $7500 subsidy.

  • avatar
    DC Bruce

    This reminds me of nothing so much as the government’s response to the so-called “Arab oil embargo” of the mid-1970s. Instead of allowing “rationing by price” the government responded with a flurry of mandates purportedly to reduce aggregate demand for petroleum, including (1) CAFE, (2) the 55 mph maximum highway speed limit, and (3) an extraordinarily complicated system of price controls on domestically-produced crude oil. The result was a series of gasoline shortages (featuring rationing by making people queue up for gasoline, odd-day, even day permission to buy gasoline (based on your license plate number), lost productivity (from slower highway travel) and so on. All this because the government wanted to “protect” people from high gasoline prices. Eventually, the system of price controls was scrapped; thereafter more non-OPEC production came on line and, by the mid-1980s, the price of crude oil collapsed. CAFE was allowed to be circumvented by the “light truck” exception, which lead to the death of station wagons (a “car”) and the rise of mini-vans and SUVs (“light trucks).

    It is not surprising that few people want to buy vehicles that are (1) relatively more expensive than gasoline-powered vehicles and (2) quite definitely less useful than petroleum-powered vehicles. Moreover, no one has done an honest calculation of the cost of constructing a charging infrastructure necessary to power an electrified vehicle fleet, including charging stations, generating capacity and transmission lines.

    So, of course “the government” is going to pay for it because no one else in his/her right mind would.

    Ah, yes, the Chinese are doing it; therefore we should. Has there ever been an example of a planned economy that has been a long-term success?

    • 0 avatar
      jmo

      “thereafter more non-OPEC production came on line ”

      I don’t think that’s entirely correct. To my knowledge what happened was Reagan convinced the King of Saudi Arabia to pump like crazy to win the Cold War. The only thing holding up the Soviet economy was their oil and gas sales to the west. When prices collapsed so did their economy and the Soviet Union began to disintegrate.

      • 0 avatar
        28-Cars-Later

        This is accurate and also the Soviets suffered Chernobyl later in the same year.

        • 0 avatar
          slavuta

          “This is accurate and also the Soviets suffered Chernobyl later in the same year.”

          which year was that? Well, I know. 1986. That year my mother was put in charge of local radiation control because she worked at Kiev nuclear energy institute.
          There were 5.5 years between Chernobyl and breakup of USSR. I don’t understand your point.

          • 0 avatar
            28-Cars-Later

            Both the economic impact of selling oil for dollars and the near simultaneous occurrence of what was then the greatest industrial disaster of all time would put serious strain on any economy.

      • 0 avatar
        slavuta

        jmo,

        I know that this is a very popular theory that is written into western books – that USSR collapsed due to economy and oil prices. This is simply a false narrative. Soviet Union lived in its own financial world, disconnected from the world currency. Yes they needed some dollars for certain things but generally, could carry on till today. In fact, this is west who was not happy not to have USSR into their dollar world. Imagine all the profits that could be made if soviets had to pay for everything in dollars.

        USSR broke because inflight between Yeltsin and Gorbachev. On March 17th was 30th anniversary of the general referendum, in which people of the USSR voted to keep the union. Half year later it was illegally broken apart. There were few republics that were represented by separatists but most wanted to stay in the union only for Boris Yeltsin telling them to go away. There is a very good chance that if Yeltsin wasn’t a president of Russia in 1991, the USSR would still be there, even though, slightly modified.

    • 0 avatar
      slavuta

      “Has there ever been an example of a planned economy that has been a long-term success?”

      well. China?

  • avatar
    Jeff S

    I was in college during the Arab Oil Embargo in 1973. Many people were trading in their late model land yachts for VW bugs, Pintos, Vegas, Toyotas, and Datsuns. The price of large American cars plummeted on the used car market and many dealers refused to take them in on trades. Had a professor with a 1972 Pontiac Safari wagon that he paid $8k new that was optioned with everything and he was only offered $500 so he put it in his barn and bought a 1973 Mercury Comet. Six months later there was no embargo and the price of the land yachts went back up. People panicked about not having enough gas to go to work and it was a pain to get up early to wait in line to hopefully get gas before the station ran out. As soon as the embargo was up my professor started driving that Pontiac again.

    The Iranian crisis of 1979 in many ways was worse. I waited for hours at a Shell self service station to fill up my car. I started to ride my bike that I bought and used in college during the Arab Oil Embargo and take the bus to work. The company I worked for would pay people to wait in line to fill up their company cars. One lady I worked with bought a diesel VW Rabbit that got over 40 mpgs and saved her IH Travelall to tow her boat. She had 2 sons and would take them boating.

    The lesson I learned that if I don’t need a larger vehicle then don’t buy one and if you currently have a larger vehicle that is not that old then keep it because you take a huge depreciation hit. It takes years to recover the difference in fuel savings and you might not ever recover the loss in value of the vehicle that you traded in especially if it is not that old. The lady I worked with was smart to buy the diesel VW Rabbit for commuting to work and for running errands and to keep the Traveall that she needed for towing her boat.

  • avatar
    cdrmike

    People have voted themselves out of a free market economy (or at least, as close as we could manage to one) and into some gubment run social experiment, chock full of the feels. The historical record is not favorable.

    • 0 avatar
      SCE to AUX

      ^^ This. The Ds and Rs compete to see who can provide the most handouts to their constituents – individual and corporate – and there seems to be little difference year after year.

      Don’t even think about touching Social Security – it will *never* run out of money.

      Now we count the “one-time” spending (or is it “stimulus”?) bills by the trillions instead of billions. I’m 57; my kids and their kids and their kids will be paying for this stuff forever. “No” is a foreign concept in government today.

  • avatar
    JEFFSHADOW

    Just let me know when there is a hydrogen engine for my 1974 Toronado. I am fine with the government using my tax dollars to re-invent the 455!

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