American carmakers are gearing up for tough new vehicle emissions rules and policies favouring electric vehicles if Democratic presidential candidate Joe Biden wins the White House.
Mr Biden and United States President Donald Trump both need the votes of car workers in Midwestern swing states such as Michigan and Ohio, and both say they want carmakers to create more car jobs in the United States, rather than Mexico or China.
Reuters Newsagency reports from there, President Trump’s and Mr Biden’s policies for cars and transportation diverge, presenting carmakers with very different sets of risks and rewards.
If elected, Mr Biden is expected to quickly reinstate the legal basis for California’s zero-emission vehicle rules and begin the process of reversing President Trump’s decision to ease fuel efficiency and carbon emission requirements through 2025.
Carmakers could also face sharply higher penalties for failing to meet fuel-efficiency requirements.
Reuters reports the Trump administration rolled back those penalties, which the industry said saved at least US$1 billion in annual compliance costs, but a federal appeals court in August reversed the administration action.
However, Mr Biden’s positions offer the car industry some offsetting gains.
Under President Trump, the White House rejected new tax credits for electric vehicles while making it easier to sell fuel-guzzling SUVs.
Mr Biden promises new tax incentives including rebates to buy EVs and a dramatic expansion of charging stations for electric vehicles, policy measures carmakers have long advocated.
Days after President Trump won the 2016 election, the trade group representing major carmakers in Washington called on him to reconsider fuel-efficiency standards proposed by the outgoing administration of President Barack Obama, and backed by California and other coastal states.
Reuters reports now, the industry is divided. Ford Motor Company, Honda Motor, Volkswagen AG and others struck a compromise deal with California on emissions requirements, while General Motors, Toyota Motor Corporation and Fiat Chrysler Automobiles sided with President Trump in an effort to freeze out California and roll back emissions requirements.
One question will be whether carmakers who backed the President Trump rollback continue their legal fight in the courts should he lose his re-election bid.
John Bozzella, CEO of Alliance for Automotive Innovation, said in a statement carmakers are “committed to a cleaner, safer, smarter future and we understand the importance of working with all parties to achieve these goals.”
Who constitutes “all parties” could change if Mr Biden wins?
Environmental groups and unions want more prominent roles in determining car policy.
The automotive industry traditionally donates more to US Republican politicians.
Reuters reports while 60 per cent of automotive campaign contributions have flowed to Republican candidates in 2020, the gap has narrowed from 2018, according to the Centre for Responsive Politics.
GM in 2019 drew the ire of President Trump for its decision to close an Ohio car assembly plant as part of a larger plan to shut down four North American factories and cut 15,000 jobs.
President Trump eventually took credit for GM selling the plant to an electric pickup truck company and promising to invest US$700 million in the battleground state.
On Tuesday, GM said it is investing US$2 billion in six US facilities and would build its new Cadillac electric SUV at its Tennessee assembly plant.
The United Auto Workers (UAW) union, representing more than 400,000 active members, in April reliably endorsed the Democratic presidential candidate.
Reuters reports nearly a third of UAW members defied their union’s recommendation in the 2016 election by voting for President Trump.
UAW members are sceptical of open trade deals, and are concerned a shift to electric vehicles, combined with tougher emissions standards for the trucks and SUVs many of them build, will mean fewer jobs.
The UAW told Reuters that what is needed is “a transition to EV production that takes full advantage of economic opportunities and ensures that there are quality manufacturing jobs for tens of thousands of American workers that currently work on petrol- and diesel-powered engines.”
California wants to ban all petrol-powered passenger vehicles by 2035 and a New Jersey state environmental agency has recommended the state ensure all passenger vehicles sold by 2035 are electric to meet emissions goals.
Some politicians are considering tax credits to help convert some engine and other car facilities into building electric vehicle components.
“Climate-friendly policies and a good economy are not at loggerheads,” said US Representative Andy Levin, a Michigan Democrat whose district just north of Detroit is a presidential campaign battleground.
President Trump has sought to capitalise on fears about electric vehicles.
He has falsely said Mr Biden backed a ban on petrol-powered vehicles.
President Trump told Fox Business News in an interview last week that Democrats would “like to go one car per family and make it all electric.”
Democrats have not called for any limit on cars per family.
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