Biden Moves EVs and Batteries to the Center of Economic Policy
Tags: Electric Vehicles, Biden, Economy, Transportation, Politics

Ona coast-to-coast, New York-to-San Francisco trip in 1919, Dwight Eisenhower discovered that you could barely cross the country by car, the roads were so run down. After he became president 40 years later, he decided to fix this by building a first-rate, nationwide highway system. We still drive on the result: some 40,000 miles of highways built for the equivalent of more than $200 billion in today’s dollars.

President-elect Joe Biden’s $2 trillion transportation agenda is the most ambitious since Eisenhower, putting the electric car, the train, and renovated roads and bridges at the center of American economic and jobs policy.

The plan is to expand intercity rail systems, reinvigorate Amtrak, install 500,000 EV charging stations — a must if large numbers of consumers are to take the plunge to electric — and pump more dollars into EV and advanced battery research.

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A big question is whether, at a time Republicans have already expressed exhaustion with big spending bills, Biden can get it through Congress. In particular, for the last couple of decades, Republicans have treated EVs, batteries, and rail as partisan Democratic pork barrel. This fly in the ointment could be eliminated if the Democrats win control of the Senate by taking both of Georgia’s seats in next month’s runoff elections. Short of that long-shot bet, Biden will be relying on the selling skills of his nominee for energy secretary, former Michigan Governor Jennifer Granholm, a pro-auto industry politician, and as transportation secretary, Pete Buttigieg.

David Sandalow, undersecretary of energy under President Obama and now a fellow at the Center on Global Energy Policy at Columbia University, told me that Granholm can be extremely persuasive when packaging her policy aims as jobs. As Michigan governor, he said, “she was attentive to manufacturing jobs — how do we restore them and create good jobs for America.” In the case of EVs and batteries, that’s precisely what the outcome would be — tons of new middle-class jobs, which is how Biden is already explicitly talking about the transportation agenda. With Buttigieg, Sandalow said, Biden has someone who “won the Iowa Caucus out of nowhere. That shows his extraordinary political skills.”

Look for the industries themselves — especially the automobile lobby — to push hard for the Biden bill. It will still be hard.

What about using a time-honored call to arms? To Eisenhower, highways were a military imperative, since armies need reliable roads. Though Biden isn’t at this point framing his plans that way, they have the same context: The U.S. is in a technological and economic war with China and Europe to dominate the transformation of personal transportation from combustion to electric. Both China and the European Union have put billions of dollars in state funds behind their EV and battery efforts. Now Biden is saying the U.S. will, too.

The agenda picks up from the Obama administration. The original post-financial crash stimulus bill contained $2.4 billion for battery and EV companies, and $8 billion for high-speed rail. The vision in part materialized — $465 million of the money went to Tesla, which paid back the loan early and has gone on to be by far the biggest EV player in the world. But high-speed rail largely fell away: The country’s sole new rail project is Brightline, a private-built rail line connecting Miami and West Palm Beach, Florida, with an extension currently being added to Orlando at a cost of $2.7 billion. But it is hardly high speed — it goes an average of 79 miles an hour.

Biden is exciting industry players that high-speed rail may be back. Marc Buncher, president of Siemens’ mobility division in the U.S. and Canada, told me that about a dozen U.S. cities have high-speed rail projects on the drawing board. They include one project connecting Dallas and Houston and another from Los Angeles to Las Vegas.

“Once the first one happens,” Buncher said, “everyone will see how it works and a bunch will follow.”

The first decade of the new EV age was about ideology. Tesla’s string of vehicles, GM’s Volt and Bolt, and the BMW i3 were all explicitly aimed at the narrow band of motorists seeking to make a green statement. The rest of the era — the one that attempts to bring EVs to the rest of the market — will only work if it’s not appealing to ideology, but to desires like “cool” and “savvy.” It will be the same with Congress. Some members will respond to the clarion call of climate change. For others — and this may be a very large group — there are the appeals of jobs, economic growth, and beating the pants off the Chinese. Biden’s task will be to understand to whom he is speaking.