The automobile industry is one of strong influence and is one of the most important industries in the United States. It is a major economic and industrial force in the nation and is vital to a healthy U.S. economy. Historically, the industry has contributed around 3-3.5 percent to the overall Gross Domestic Product. It drives $953 billion into the economy each year through both sales and servicing. However, the industry is also responsible for around half of the United States consumption of oil. That being said, a Biden Presidency, expected to come with harsh regulations regarding oil consumption and a push towards an emissions free country, could have substantial impacts on and shape the industry as a whole.
One major impact will be stricter industry and governmental regulations. Biden has already pledged $400 billion of investment to the transition to clean energy. He wishes to replace the majority of governmental vehicles with those that are electric. He has also promised, as part of his climate plan, to reinstate rigorous fuel economy standards introduced by the Obama administration that were cut down by Trump during his presidency. In 2012, Obama ruled that auto manufacturers had to cut the emissions for light-duty trucks and passenger vehicles by 3.5 percent per year from 2017 to 2021, and then further by 5 percent per year from 2022 to 2025. Once Trump stepped into office, however, he changed the rule to 1.5 percent per year through 2026. Leaders in the industry said this reversal saved them upwards of $1 billion in annual costs. That being said, Biden’s climate plan could drastically increase costs that auto manufacturers incur.
Another impact that the industry could experience will be a change in the number of jobs and workers, especially for those companies that are not pushing heavily into the electric vehicles market. Although Biden wishes to create 1 million new jobs across the entirety of the auto industry, the increase in costs resulting from his policies could have negative implications on current jobs. While it is uncertain whether or not Biden’s administration will create or destroy jobs in the industry, many auto workers are concerned the push towards electric vehicles and the stricter regulations puts them at risk of losing their jobs.
While the exact implications of Biden’s climate policies and emissions regulations are unclear, one thing is certain: there will be a strong push towards the adoption of electric vehicles in the country. His administration plans to encourage consumer spending on electric vehicles by providing a $7,500 consumer tax break on the first 200,000 vehicles that an automaker sells, an incentive that will help both consumers and automakers. He also plans on setting up a rebate program called “cash for clunkers” to encourage Americans to trade in their older cars for new, environmentally friendly vehicles. Finally, he plans on helping state governments build up to 500,000 new charging outlets by the end of 2030 in hopes of making consumers more comfortable with the purchase of an electric vehicle. That being said, the automobile industry is poised for one of its biggest shake-ups in history. Will you contribute to the changing times and purchase an electric vehicle?