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Biden announces ambitious EV goal

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On August 5, U.S. President Joe Biden announced a national goal of having half of all vehicles sold in the U.S. be emissions-free by 2030. Although not legally binding and fairly ambitious, the goal received support from several automakers such as General Motors, Ford Motor Co. and Stellantis.

Fast Facts:

  • The executive order sets a target for electric vehicles, hydrogen-fuel cell and plug-in hybrid vehicles to make up 50% of U.S. sales by 2030. 
  • EPA simultaneously proposed new rules that would require auto makers to achieve a fleetwide average fuel-efficiency equivalent of 52 miles per gallon by the 2026 model year. 
  • Biden pushed for a goal of 500,000 public chargers by 2030, currently there are 110,000 public charging outlets. 
  • More than $6 billion in grants has been allocated for battery production, development and recycling. 
  • Biden also called for $174 billion in government spending to boost EVs, including $100 billion in consumer incentives.

Aimed to help the administration address climate change, this goal sets a new schedule for developing new emissions standards through at least 2030 for light duty vehicles. Currently, 32% of all U.S. cars sold in 2030 are expected to be fully electric, with another 4.2% expected to be plug-in hybrids.

The new regulations also mandate a fleet-wide vehicle mileage of 52 miles per gallon by 2026, which would result in a 10% reduction in vehicle emissions in 2023, and 5% further emissions reduction each year through 2026. The Transportation Department said these new standards would increase fuel efficiency by eight percent annually, saving drivers “hundreds of billions of dollars on gas, reduce pollution and help counter the climate crisis.”  

According to the administration, changing Americans’ mindsets about car ownership could be a big challenge. Currently, EV sales account for only three percent of sales due to higher upfront costs and limits of range. Some steps experts predict the administration will take to alleviate the challenge around consumer buy-in include offering tax incentives at point-of-sale and a national network of charging stations. 

However, this new plan to build additional charging stations raises challenges concerning convenience, accessibility and power grid stress points. Right now, around 80% of car charging happens at home. According to research firm IHS Markit, “widespread fast charging in the U.S. is still a decade-plus off, even using the most enthusiastic forecasts.” 

Another concern is that these rules are purely voluntary, meaning automakers could still backtrack on their commitments if they wanted. Union workers are also fearful of job losses, and auto dealers don’t want to undervalue or displace the work that goes into traditional engines as well. 

Carmakers with electrification goals:

Despite these challenges, these new regulations and goals with the support from car makers and consumers will be necessary in achieving a carbon-free economy by 2050. “The future of the American auto industry is electric,” Biden said, but will the other key players involved fully get on board this time around?

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Jasmine Kim
Jasmine Kim

Jasmine is a licensed insurance agent and The Zebra’s newsroom content writer. With a background in B2B content writing and journalism, she reports on breaking news, trends, mergers and acquisitions, and financial reports related to the insurance industry.