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Illustration: Sarah Grillo/Axios

President Biden's swift effort to re-establish stricter fuel efficiency mandates, along with his broader push toward vehicle electrification, is as much about creating new jobs as it is protecting the environment.

Why it matters: The U.S. lags far behind the rest of the world in electric vehicle adoption. Catching up will require big investments in EV production — including battery cell manufacturing and mining of raw materials — to avoid dependence on imports and foreign supply chains.

  • Biden's goal: 1 million new auto industry jobs in manufacturing, supply chains and infrastructure like EV charging stations.
  • About 757,000 people currently work in the auto and parts sector alone, down from a peak of 1.1 million in 2000, per the U.S. Labor Department.

Driving the news: On his first day in office, Biden moved quickly to unravel many of former President Donald Trump's environmental policies.

  • Among his first actions: directing the EPA and the Transportation Department to re-establish stricter fuel efficiency mandates, which Trump had weakened.
  • Tighter standards for fleet-wide emissions would almost certainly compel automakers to build more EVs.

Biden has made boosting electric vehicles a top priority and pledged to add 500,000 charging stations and make all federal fleets fully electric.

  • He also supports expanded consumer tax credits for EV purchases.
  • It worked in Europe, where Germany and other countries folded EV incentives into their coronavirus stimulus packages last year.
  • EVs jumped from roughly 3.3% of total European sales in 2019 to an estimated 11% in 2020, says Nathan Niese, Boston Consulting Group's associate director for electrification and climate change.
  • In the U.S., plug-in vehicles account for only about 2% of total sales.

Yes, but: it's not just about stimulating demand. The U.S. needs to move quickly to secure the necessary batteries and raw materials that go into them, says Robbie Diamond, CEO of Securing America’s Future Energy (SAFE).

  • China is poised to dominate EV production and supply chains if the U.S. does not act quickly to boost its output.
  • Of 142 lithium-ion battery megafactories under construction globally, 107 are set for China, versus nine in the U.S., according to a SAFE research report.
  • All of the top battery manufacturers are based in Asia and most of the lithium, nickel and cobalt used to make them comes from outside the U.S.

If the U.S. goes big on electric vehicles to compete with China — a “minerals-to-markets” approach as laid out in SAFE’s roadmap — it would create more than 640,000 jobs, Diamond tells Axios, previewing new research.

  • But labor unions fear the opposite. EVs have 80% fewer parts overall, making them easier to assemble, according to a UAW analysis.
  • However, a BCG study concluded it takes roughly the same labor hours to assemble an electric vehicle as it does a traditional vehicle.
  • It's just that much of the labor shifts upstream, to suppliers that make batteries, electric motors, electronics and thermal systems, which will require retraining.

The bottom line, says SAFE's Diamond: "We're not asking auto workers to become Google programmers. There will be jobs. The question is will we let them happen in Asia — or here?"

Go deeper

Ben Geman, author of Generate
Jan 29, 2021 - Economy & Business

General Motors puts Trump in its rearview mirror

Illustration: Sarah Grillo/Axios

General Motors (GM) is racing to prepare itself for a president and a world that takes climate change more seriously — and putting the Trump era behind them in the process.

Driving the news: GM yesterday announced an ambitious plan to end global sales of internal combustion vehicles by 2035. It's part of their wider new pledge to be carbon neutral by 2040.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Several states report zero COVID deaths for the first time in months — CDC says schools should still universally require masks and physical distancing.
  2. Politics: New York to lift mask mandate for vaccinated people — CDC director says politics didn't play a role in abrupt mask policy shift.
  3. Vaccines: Sanofi, GSK COVID vaccine shows strong immune response in phase 2 trials — Vaccine-hesitant Americans cite inaccurate side effects — 600,000 kids between 12 and 15 have received Pfizer dose since FDA authorization.
  4. Business: How retailers are responding to the latest CDC guidance — Delta to require all new employees be vaccinated — Target, CVS and other stores ease mask requirements after CDC guidance.
  5. World: World's largest vaccine maker expects to resume exports by end of 2021 — Biden administration to send 20 million U.S.-authorized vaccine doses abroad.
  6. Variant tracker: Where different strains are spreading.
2 hours ago - World

Scoop: Biden to waive sanctions on company in charge of Nord Stream 2

Angela Merkel (left) with Vladimir Putin. Photo: Adam Berry/Getty Images

The Biden administration will waive sanctions on the corporate entity and CEO overseeing the construction of Russia’s Nord Stream 2 pipeline into Germany, according to two sources briefed on the decision.

Why it matters: The decision indicates the Biden administration is not willing to compromise its relationship with Germany over this pipeline, and underscores the difficulties President Biden faces in matching actions to rhetoric on a tougher approach to Russia.

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