By Keith Laing, Jennifer A Dlouhy, and Ari Natter

President Joe Biden has ordered the federal government to buy electric vehicles made in America with union labor. There’s just one problem: No such vehicles exist.

Tesla Inc., the leading U.S. electric vehicle manufacturer, has several American-made models, but it isn’t unionized. And while General Motors Co. employs union labor to make the electric Chevrolet Bolt, roughly three-quarters of its components come from outside the U.S. — missing the 50% threshold to be considered American-made under federal procurement law.

To be sure, Biden’s executive order, issued Wednesday, is designed to spur investment in the nascent plug-in car market and didn’t come with a deadline. So there’s time for automakers to adjust. Two of them — General Motors and Nissan Motor Co. — announced commitments this week to produce carbon-neutral fleets in coming decades. Ford Motor Co. has previously pledged to become carbon neutral by 2050.

And with a U.S. government fleet of 645,000 vehicles — only 3,200 of which are electric — there’s plenty of incentive.

“Do I think GM and Tesla will contort to access a big U.S. government market? Yes I do,” said Scott Sklar, director of sustainable energy at the George Washington University’s Environment & Energy Management Institute. “They follow the money.”

Biden’s push could also help drive more domestic electric vehicle — or EV — manufacturing overall, given the scale of the government’s annual vehicle acquisitions, said Sam Ori, executive director of the Energy Policy Institute at the University of Chicago.

“The federal government acquires 50,000 to 60,000 new vehicles a year, and, in an EV market where you’re looking at 300,000 to 350,000 units a year, an additional several tens of thousands could have an impact for manufacturers,” Ori said.

Continue Reading at Bloomberg…

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Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
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