PALO ALTO, U.S. — U.S. President Joe Biden on Thursday set a goal for half of all new cars sold in the country to be zero-emissions vehicles by 2030, freezing out builders of conventional hybrids as the White House aims to accelerate America’s sluggish transition to electrics.
Biden’s executive order covers passenger cars and light trucks powered by batteries and fuel cells, as well as plug-in hybrids. But it does not mention regular hybrids, which cannot be plugged in to recharge, posing a challenge to Japanese carmakers like Toyota Motor and Honda Motor, which have made them a specialty.
Only executives from Ford Motor, General Motors and Stellantis, formerly Fiat Chrysler Automobiles, were invited to a White House event in the afternoon to back the Biden administration’s plan. They pledged to have battery electric, fuel cell and plug-in hybrid vehicles account for 40% to 50% of U.S. sales by 2030.
But this can be achieved only with the support of the federal government, “including purchase incentives, a comprehensive charging network of sufficient density to support the millions of vehicles these targets represent, investments in R&D, and incentives to expand the electric vehicle manufacturing and supply chains in the United States,” the companies said in a joint statement.
Ford and GM shares both rose around 3% on Thursday.
Toyota recently set targets that keep regular hybrids in the mix for years to come. It pledged in May to have 15% of its American sales consist of electric and fuel cell vehicles by 2030 — and to have 70% consist of electrified vehicles generally, including plug-in and traditional hybrids.
Foreign carmakers were not represented at the White House event on Thursday. Nor was American automaker Tesla, which sells more electrics here than any other manufacturer. Workers at the three carmakers that were there are represented by the United Auto Workers union, which endorsed Biden, and the president repeatedly espoused the virtue of buying cars made by unionized workers.
“Seems odd that Tesla wasn’t invited,” Tesla CEO Elon Musk tweeted, later posting a meme suggesting “sabotage.”
Biden said there should be additional financial incentives for buying vehicles built in the U.S. by union labor. “We need automakers and other companies to keep investing in America,” he said. “We need them not to take the benefits of our public investments and expand electric-vehicles and battery-manufacturing production abroad.”
Tesla has been relying more on China for production in the past year, announcing in July that its Shanghai Gigafactory has replaced the Fremont, California, facility as its main vehicle export hub.
On his first day in office in January, Biden set an environmental agenda for the U.S. that included “net-zero emissions, economywide, by no later than 2050.” The administration also rejoined the Paris Agreement after previous President Donald Trump had pulled out of the climate accord.
In addition to the 50% sales goal, Biden’s executive order also directs the development of new national emissions standards that build on a Trump-era agreement between California and Ford, Honda, the Volkswagen group, BMW and Volvo Cars.
The U.S. has been lagging behind in electric-vehicle adoption in recent years, with barely 2% of new vehicles currently fully electric.
In 2020, the U.S. represented only about 17% of the world’s total stock of 10.2 million electrics, according to the International Energy Agency. With more than 4.5 million units, China makes up 44% of all the EVs in the world, and the nearly 3.2 million in Europe account for about 31%.
And America is not catching up. It logged a 17% compound annual growth rate in electrics from 2016 to 2020, compared with 36% in China and 60% in Europe.
“We view today’s announcement as part of a broader endeavor under the Biden administration aimed at accelerating the shift to EVs and ultimately compete with China in this EV arms race,” said Dan Ives, managing director at Wedbush Securities.