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What Biden means for the auto industry, from dirty jobs to clean air

“Biden has already said he will consult the industry. If he follows through and really listens, it will be a welcome change,” said one auto industry expert.
North American International Auto Show Features Latest Car Models
Joe Biden sits in a Dodge vehicle as he tours the 2017 North American International Auto Show on Jan. 10, 2017 in Detroit.Bill Pugliano / Getty Images file

President-elect Joe Biden played a central role as vice president during the Obama administration, pulling together a task force that is widely credited with saving General Motors and the then-Chrysler, along with as many as 1 million American automotive jobs. Looking forward, the fast-evolving transportation industry is expected to play a central role in Biden's plan for economic recovery.

Biden has already signaled his goal of addressing a number of issues central to the auto industry — including trade, infrastructure, and electric and autonomous vehicles — that will reshape the transportation world in the years ahead.

One of his key campaign promises calls for the creation of 1 million new jobs, in everything from new and improved roads to EV charging stations.

Biden’s win could especially benefit companies who focus on green and emission-free technologies.

"Traditional automakers with largely union workforces would likely be among the biggest winners from tax incentives that would further stimulate the production and consumption of EVs," Garrett Nelson, a senior automotive analyst with CFRA Research, wrote in a research note.

Electrified vehicles will play an increasingly critical role in the industry, with dozens of new all-electric models, from the Ford Mustang Mach-E to the Tesla Cybertruck, due out over the next two years.

Biden’s support for clean energy and, in particular, electrified vehicles, is one area in which he and President Donald Trump have most sharply disagreed. The Trump administration has been indifferent, at most, to cleaner vehicles, rejecting mostly Democratic calls to expand the $7,500 federal EV incentives and even suggesting the current program should be eliminated.

Biden supports an expansion, something Nelson sees as “the most impactful part of his (transportation) plan.” Biden also wants to create a nationwide charging infrastructure to address so-called “range anxiety,” one of the key obstacles to widespread public acceptance of plug-based vehicles. There currently are 27,021 charging stations, according to the U.S. Department of Energy, largely along the coasts. Biden envisions 500,000, spread across every part of the country.

Biden has indicated his intentions of rejoining the Paris climate accord, which Trump dropped, and is expected to reverse other moves made under the soon-ending administration. That includes a rollback of the Corporate Average Fuel Economy standards set in place under Obama.

Clean energy was central to Biden’s campaign and his promise to fund renewable sources like solar and wind would make charging stations more likely to deliver zero-emission energy.

Underscoring his environmental stand, Mary Nichols is reportedly under consideration to be Biden's pick to lead the Environmental Protection Agency. She currently heads the California Air Resources Board that has pushed through tough emissions standards and rules calling for rapid growth in EV sales.

Biden and Trump do agree on some issues, notably the importance of trade and manufacturing. How they address those issues is another matter. Early on, Trump said trade wars are “easy to win,” launching a series of disputes with key trade partners from Canada to China. He has scored some successes, including a NAFTA replacement. But the dispute with China remains unresolved and has had serious consequences.

For the auto industry, that has meant higher costs for imported parts, while also reducing the export of U.S.-made vehicles to China. If anything, the dispute has led manufacturers like BMW, Ford and others to shift some vehicle production from the U.S. to Asia.

Trump promised a surge of new factory construction, something that largely hasn’t happened, noted the Economic Policy Institute in an August study reporting “nearly 1,800 factories have disappeared under Trump.” The study also found a loss of manufacturing jobs accelerating due to the pandemic.

Biden promises to resolve the ongoing trade disputes — though he also has said fairer trade with China is essential. His call for massive growth in transportation jobs helped him win over some of the Midwest blue-collar workers who went for Trump in 2016, with Michigan and Wisconsin helping secure a Biden victory in the presidential election. He will have to deliver, political observers caution, to retain their loyalty.

But that could prove far more difficult than Biden and Democrats had hoped, with Republicans poised to retain control of the Senate and reducing their minority status in the House of Representatives. GOP leaders have been cool to his call for investing $400 billion in clean energy and innovation over the next decade, even with the goal of creating 10 million jobs.

“Yes, he’s (promised) a lot but there will be a lot of checks if the Senate remains Republican,” said Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor, Michigan. While some analysts are warning of full-on gridlock, Bailo is a bit more optimistic. “There are some Republicans coming out in favor of energy and transportation initiatives,” she added, though Biden likely won’t get as much as he would with a Democratic-controlled Senate.

Traditionally, automakers have leaned towards the GOP, in line with that party’s traditional pro-business stand. Relations have been strained under Trump by the president’s frequent Twitter and campaign attacks on various manufacturers, notably Ford and General Motors.

There is a hopeful tone among industry leaders as they discuss a Biden administration, particularly considering his support for electrification and infrastructure programs.

“Biden has already said he will consult the industry,” Bailo said. “If he follows through and really listens, it will be a welcome change.”