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 European Automobile Manufacturers’ Association (ACEA) is demanding the EU install more electric vehicle charging stations in a letter co-signed with Transport & Environment (T&E) and the European Consumer Organization (BEUC). This marks the hundredth time (rough estimate) an auto lobbying entity has tried to pressure the government into spending a fortune to drastically alter the European infrastructure to support the planned glut of EVs.
But it might be a fair request. Regulatory actions have effectively forced the industry into a corner and it now seems giddy at the prospect of an electrified world. The only real downside is that the charging infrastructure and power grids aren’t ready. ACEA estimates that the EU will need to build one million public charging points by 2024, with hopes of seeing three million installed before 2030.
Let’s see how feasible that is before it’s tried in our neck of the woods.
Germany is eager to see the United States abolish trade barriers implemented by President Donald Trump now that it looks like Joe Biden has won the 2020 election. While that could all be undone by the sudden influx of legal actions taken by the Trump campaign as presumptive evidence of election impropriety streams in, Germany would still like to get the ball rolling on trade with the Democrats.
The nation’s automotive industry is petitioning leadership in the U.S. and European Union to align technical/regulatory standards and minimize the existing trade barriers. The German Association of the Automotive Industry (Verband der Automobilindustrie) or VDA has already endorsed the proposal with the lobby group’s president confirming its position in a recent webcast hosted by the Frankfurt business media club ICFW (Internationale Club Frankfurter Wirtschaftsjournalisten).
While the United States has enacted some laws governing autonomous vehicles, the framework is pretty loose. Automakers have a cap on the number of test vehicles they’re allowed to field. They also have to get permission from the National Highway Traffic Safety Administration, but safety reporting is basically voluntary — and there’s plenty of conflict with existing safety standards.
A House Energy and Commerce subcommittee hearing held Tuesday sought to address the issue by gathering input from an array of sources, some of which had conflicting goals. And yet it appears that a consensus has miraculously been reached on Capitol Hill. All sides want more laws passed governing autonomous vehicles, albeit for various reasons. Consumer groups want assurances that AVs will remain safe and service as many people as possible; industry groups want a clearcut regulatory framework they can use to gradually shift test mules into products with more intellectual property protection and less red tape.
Of all the things that automakers hate, losing money has to hold a permanent place at the top of the list. If you aren’t making money, you can’t keep building cars — and if you aren’t building cars then you’re not much of an automaker. Following that almost irresponsibly oversimplified logic, it’s no wonder the industry has been hesitant to endorse President Trump’s suggestion that the United States may need to enact new import tariffs.
While seemingly eager eager to provide manufacturers with the tools to get things done, the current administration clearly wants it done in America — and isn’t above punishing those who refuse to reciprocate. As a result, lobbyists have begun putting in some overtime.
There’s been quite a bit of the old “he said, she said” as the global trade war between developed nations coalesces. Germany has not covered U.S. President Donald Trump’s trade policy favorably, not that it has much reason to. His new tariffs on imported steel and aluminum has tested relationships with numerous countries and, while it isn’t the biggest exporter of metal to the United States, Germany has something to lose. Likewise, proposed duties on passenger vehicles have sincerely rubbed Deutschland the wrong way.
However, the issue was further complicated this week after a gossipy report surfaced claiming Trump told French President Emmanuel Macron in April that he would continue hampering the European auto manufacturers until there are no Mercedes-Benz vehicles driving in America.
There was a mighty blowback against the Trump administration’s suggestion to elevate tariffs to as much as 25 percent on all foreign-built passenger vehicles.
Already reeling from fresh import fees on aluminum and steel, Europe expressed its collective distaste on new taxes while Japan vowed to plead a strong case for itself. Meanwhile, prominent politicians and two of the largest automotive trade groups in the country came forward to condemn the plan, stating it was “confident that vehicle imports do not pose a national security risk” to the United States.
While the administration has already launched its investigation to determine whether vehicle and auto part importers threaten the industry’s health and ability to develop advanced technologies, the government noted that a second opinion wouldn’t hurt. Announced on Tuesday in the Federal Register, the the Commerce Department will allot two days in July for public comments on the matter.
President Trump announced a security investigation into auto imports last week, tasking Commerce Secretary Wilbur Ross with the job. His goal will be to determine what effects imported vehicles have on the national security of the United States under Section 232 of the Trade Expansion Act of 1962 — which sounds like a monumental and rather complex task.
Basically, Ross will examine whether or not the U.S. can get away with escalating automotive tariffs. That’s a touchy subject, considering how contentious global trade has become in recent months. Worse yet, the 80-year-old commerce secretary will have to continue promoting American businesses and industries outside its borders while deciding on an issue few trade partners will be happy with.
Automakers aren’t thrilled either. After Trump announced the investigation, the Association of Global Automakers and Alliance of Automobile Manufacturers both said they didn’t believe vehicle imports posed a national security risk. “To our knowledge, no one is asking for this protection. If these tariffs are imposed, consumers are going to take a big hit,” said John Bozella, President of Global Automakers, in a statement. “This course of action will undermine the health and competitiveness of the U.S. auto industry.”