Biden’s ambitious plan supports entrepreneurship in electric vehicle transformation
Detroit (AP)- waving tax breaks and rebates, U.S. President Joe Biden wants your car, truck or SUV to be replaced by an emissions-free electric vehicle in his quest to fight climate change.
Some buyers will find his offer really convincing. Biden’s goal, however, is a very difficult one, even if Congress approves his دولار 2.3 trillion infrastructure plan, along with its incentives, it will take many years to replace enough internal combustion vehicles with electric vehicles; to make a significant impact on automobile exhaust pipe emissions.
At present, there are approximately 279 million cars on the road in the United States. According to IHS Markit, the all-electric ratio is 0.36%. Of the 14.5 million new cars sold last year, 2% were fully electric.
And even if every new car sold is battery-powered, which no one imagined, it would take about 15 years to replace the entire car fleet.
Moreover, the cars manufactured over the past two decades last much longer than the previous ones; so buyers keep them longer. The average American car has been on the roads for nearly 12 years.
Research shows that every electric car sold actually reduces emissions, and Bruce belzovsky, a retired transportation researcher at the University of Michigan who runs a company studying the future of the auto industry, said it could take two years for an electric car to reach this point, if coal is used to generate power to recharge the car.
“If you don’t start somewhere, you’ll never get anywhere,” belzovsky said, and continued, “every electric car you sell will have a positive impact on the environment.”
The Biden administration did not provide details on how much car buyers would get to switch their cars to electric ones, but the administration plans to spend 1 174 billion over 8 years on electric vehicles, including incentives for consumers, grants to build 500,000 charging stations, and money to develop U.S. supply chains for parts and metals needed to make batteries.
“We will offer tax incentives and point-of-sale discounts to all American families,”President Biden said last week.
The biggest incentive in all of this is likely to be the expansion of the electric vehicle tax credit, now يبلغ 7,500, which will be phased out when the automaker’s sales reach 200,000 battery-powered vehicles, Tesla and General Motors have already exceeded the cap, and Nissan is approaching it.
Biden’s plan summary did not include any numbers. Despite this, Democrats on the House Ways and Means Committee support a bill that would raise the limit to 600 thousand cars. The bill also includes credit tax of at least $ 1,250 for those who buy electric cars are used.
Jeff Schuster, head of global forecasts for LMC Automotive, an automotive industry consultancy, said the administration either did not yet have specific figures or deliberately omitted them while negotiations were taking place between the auto industry, Congress and environmental groups.
“They know that a certain level of concessions will be needed,”he said.
The form and size of the discounts were also not clarified; but Senate Majority Leader Chuck Schumer, who represents New York, has proposed large discounts for those who buy American-made electric cars, a possible repeat of the 2009 program.
Who then gave 4,500 to people to replace their cars with more efficient ones.
The cuts and charging stations address two major reasons why many consumers are worried about switching to electric vehicles, Schuster said, and the incentives are expected to help lift electric vehicle sales from about 358,000 this year to more than one million by 2023, and up to 4 million by 2030.
Schuster said that if Biden’s plan succeeds, and electric car sales thrive, the lack of computer chips and metals used to build batteries, and the lack of battery plant capacity could leave the industry behind buyers, at least for two years.
David Kirsch, professor of strategy and entrepreneurship at the University of Maryland, said Biden’s plan is not really the tipping point for consumers from gasoline-burning cars to electric cars.
“There will be some good changes, which will happen because of the size of this investment, and these changes should not be underestimated. I think the electricity was coming anyway.”
The industry is already spending billions to develop electric cars, with ELMC saying 22 new electric models will appear this year, and a 2018 study by Alix Partners found that the global auto industry will spend 2 255 billion on electric cars by 2023.
Meanwhile, the Alliance for Automotive Innovation, an industry group representing General Motors, Ford, Toyota and most major automakers, wrote in a letter to Biden that despite low battery costs, electric vehicles are still more expensive than combustion vehicles. The group, joined by the United Auto Workers Union and the spare parts supply Association, is also urging the government to help address this difference, and is seeking tax breaks, research funding and requirements to replace the government’s Federal Fleet with electric cars.
Even with this extra spending, people are generally likely to drive fewer cars in the future; because in the wake of the pandemic, many companies will allow a mix of work from home and office work. He said Schuster this will make some people more reluctant to replace their cars.
However, Kirsch says that no matter how effective or ineffective Biden’s plan is in combating climate change, spending on modernizing the transportation fleet and infrastructure is long overdue.
“What we are doing is trying to offset some of the long-awaited investments,”he said.