Biden Administration Aims to Have 50 Percent of Car Sales Be Electric by 2030

President Biden Mack truck plant speech
U.S. President Joe Biden speaks at Mack Truck Lehigh Valley Operations on July 28, 2021 in Macungie, Pennsylvania. Michael M. Santiago/Getty Images

President Joe Biden will sign a new executive order today that aims to change consumer buying behavior when it comes to purchasing vehicles. The order is a commitment to having half of all new vehicles sold by 2030 be zero-emission models.

The federal government's definition of zero-emission vehicles extends to plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs). Traditional hybrids and newer mid-hybrid technology are not counted toward the 50-percent total. The order extends to light-, medium- and heavy-duty vehicles.

Senior administration officials describe the move as a "paradigm shift" that aims to kick off the development of long-term fuel efficiency. The aim of the move is to deliver cost savings to consumers, mitigate negative effects on the environment, decrease pollution, fairly distribute environmental benefits and burdens and make headway against climate change.

According to the officials, the change from internal combustion engine vehicles to electrified and electric models will help the United States become more competitive with China, the largest electrified vehicle market in the world with 44 percent of the total electric vehicle sales. The U.S. represents just 17 percent and Europe accounts for about 31 percent.

A June 2021 study by Pew Research found that just seven percent of U.S. adults said that they currently have an electric or hybrid vehicle. Thirty-nine percent said that they were very or somewhat likely to seriously consider buying an electric vehicle the next time they go new model shopping.

According to the International Energy Agency, there were three times as many electric vehicles registered in the U.S. in 2020 as there were in 2016 (1.8 million). There were fewer than 300,000 BEVs on the road in 2016. Last year, there were 1.1 million. Most of those are Teslas.

The bulk of electric vehicle registrations are on the West Coast of the U.S. where progressive regulations and incentives have been utilized to push electric vehicle ownership. The executive order is underpinned by much of the same framework already adopted by the State of California regarding electric vehicle adoption.

In April, President Biden announced a new target for the United States to achieve a 50 to 52 percent reduction in greenhouse gas pollution compared to 2005 levels by 2030.

This latest move by the administration is designed to sync with the planned $7.5 billion of funding for electric vehicle charging stations that is part of the $1.2 trillion bipartisan infrastructure deal. The legislation also includes $6 billion in funding to retool factories in preparation for mass electric vehicle adoption.

The nearly 3,000-page bill is another facet of Biden's Build Back Better initiative, which also focuses on investing in union jobs as a measure that goes hand-in-hand with combating climate change.

One of the president's first actions when he took office in January 2021 was to cancel the permit for the building of the Keystone XL pipeline, citing climate change concerns. That union jobs-killing move was highly criticized by administration opponents who latched onto comments made by United States Special Presidential Envoy for Climate and former Secretary fo State John Kerry that suggested those laid off pipeline workers would be able to easily transition their skills into getting solar industry jobs.

In addition to the executive order, President Biden has instructed the Environmental Protection Agency (EPA) and Department of Transportation to propose new rule making surrounding the advancement of fuel efficiency standards in the auto industry. This is an effort to change what a senior administration official called "harmful rollbacks" of Corporate Average Fuel Economy (CAFE) standards put into place by the Trump Administration.

The Biden White House estimates that their planned CAFE changes would result in $140 billion in net benefits, save $200 billion in gas, reduce two million metric tons of carbon pollution and save the average vehicle owner $900 over the life of the vehicle.

BMW, Ford, Honda, Volkswagen and Volvo Cars released a joint statement today in support of the administration's new actions that reads, "We were proud to stand with California to establish progressive new greenhouse gas regulations, and we 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.

"While the California framework companies are driving towards 40 to 50 percent of our sales being EVs in the next nine years, bold action from our partners in the federal government is crucial to build consumer demand for electric vehicles and put us on track to achieve the global commitments of the Paris Climate Agreement. That includes a strong nationwide greenhouse gas emissions standard, continued investments in charging infrastructure, and broad consumer incentives for all electric vehicle purchases."

Ford, General Motors and Stellantis also applauded today's moves in a statement of support saying, "Our recent product, technology and investment announcements highlight our collective commitment to be leaders in the U.S. transition to electric vehicles. This represents a dramatic shift from the U.S. market today that can be achieved only with the timely deployment of the full suite of electrification policies committed to by the Administration in the Build Back Better Plan, including purchase incentives, a comprehensive charging network of sufficient density to support the millions of vehicles these targets represent, investments in R&D, and incentives to expand the electric vehicle manufacturing and supply chains in the United States.

"With the UAW at our side in transforming the workforce and partnering with us on this journey, we believe we can strengthen continued American leadership in clean transportation technology through electric vehicle innovation and manufacturing. We look forward to working with the Biden Administration, Congress and state and local governments to enact policies that will enable these ambitious objectives."