The Fuse

Biden’s Ambitious EV Agenda Meets Early Setbacks

by Phillip Wilcox | March 19, 2021

Near the end of his 2020 campaign for president, Joe Biden called climate change, “The number one issue facing humanity.”

After being sworn in as president on January 20, 2021, President Biden wasted no time turning the focus of the nation to the daunting task of limiting greenhouse gas (GHG) emissions in order to reduce the harmful effects of climate change. In one of his first actions after taking office, Biden signed an executive order signaling that the United States would be rejoining the Paris Climate Accords.

This move represented an early signal that the United States would return to international organizations and work with the international community to address global concerns like climate change. Making a commitment to rejoin an international agreement, while an important first step, needs to be backed up by action at home to prove that the United States really is serious about reducing its GHG emissions.

Electrifying the federal fleet

Biden’s second step, and arguably his boldest and most ambitious move towards addressing climate change came one week after his inauguration. Biden signed an executive order to devise a plan to convert the entire fleet of 645,000 government vehicles to “clean and zero-emission vehicles.” The difficult point is that they must be made by union workers from at least 50 percent American-made materials.

This part was included likely to gain the support and approval of labor groups as well as environmentalists. These are two key groups in the Democratic Party who helped him get elected as president.

Biden’s point that these vehicles should be made by union workers from at least 50 percent American-made materials has already caused some problems. This is mainly due to the global microchip shortage identified by many industries. These industries include major American automakers such as Ford and GM, and the manufacturers of other electrical products, like cell phones and advanced medical equipment.

Biden met with a bipartisan group of members of Congress who both expressed concerns over the global chip shortage. Senate Majority Leader Chuck Schumer, D-N.Y. said that, “semiconductor manufacturing is a dangerous weak spot in our economy and in our national security.”

The COVID-19 pandemic has raised concerns about the supply chain of key supplies that are manufactured abroad. Most of the chips fabricated by semiconductors are in China and Taiwan. In response to the concerns of both industry leaders and this bipartisan group in Congress, President Biden signed another executive order on February 24 to attempt to address this concern and allow for the production of chips needed for EVs.

This executive order includes a 100-day review of key products including semiconductors and advanced batteries used in EVs. The 100-day period will be followed by a broader, long-term review of six sectors in the U.S. economy. The long-term review will lead to policy recommendations and quick policy action on issues affecting the supply chain of microchips that are critical to many different electronic industries.

A setback from the Postal Service

Biden was able to get bipartisan agreement on the importance of addressing America’s semiconductor weakness. However, he has also received criticism for his plan to convert all government vehicles to electric vehicles, including a significant early setback. The United States Postal Service (USPS) awarded a 10-year contract to Oshkosh Defense to manufacture a new generation of U.S.-built postal delivery vehicles, but lacks a commitment to immediate, full electrification.

This contract has an initial $482 million investment in which Oshkosh Defense will finalize the production design of the Next Generation Delivery Vehicle (NGDV). They will then assemble 50,000 to 165,000 of them over 10 years. These vehicles will be either fuel-efficient internal combustion engines or battery-electric powertrains.

Postmaster General and USPS Chief Executive Officer Louis DeJoy said, “As the American institution that binds our country together, the U.S. Postal Service can have a bright and modern future if we make investments today that position us for excellence tomorrow.”

DeJoy is a Republican mega donor appointed by President Biden’s predecessor, President Donald Trump. President Trump relentlessly criticized the postal service for years before DeJoy took over as Postmaster General in spring 2020. After DeJoy took over, he began cost cutting measures which resulted in mail delays.

Replacing DeJoy with someone more amenable to the White House’s electrification ambitions is not a straightforward task for the Biden administration. Unlike other Cabinet Secretary positions, which change with a new president following the nomination and approval process in the Senate, the Postmaster General is not an appointed position by the president. Instead, DeJoy was voted as Postmaster General by the Republican-controlled Board of Directors.

On the same day that DeJoy announced the contract with Oshkosh Defense, the Biden administration announced the nomination of three new people to fill the four vacancies on the USPS Board of Directors. Ron Stroman, the Postal Service’s recently retired deputy postmaster general; Amber McReynolds, the chief executive of the National Vote at Home Institute; and Anton Hajjar, the former general counsel of the American Postal Workers Union. If all three are confirmed by the Senate, the nine-member Board will be split with four Democrats and four Republicans with left leaning McReynolds as the lone independent.

It appears that DeJoy’s days as Postmaster General are numbered. Nevertheless, this early setback brings the difficulty of making the sacrifices necessary to reduce GHGs in America clear to Biden. While he may experience rare bipartisan approval on things like semiconductors and addressing industry chip shortages, at other points he will be fought by industry, special interests, even members of his own government. Because he has addressed climate change as the number one priority, he certainly has the will to make that sacrifice. Time will tell whether the country follows him.