Tuesday 18 May 2021 9:18 pm

Biden charges up $174bn electric vehicle plan in Michigan speech

US President Joe Biden today called for government grants for new battery production facilities as he made the case for his $174bn (£123bn) electric vehicle plan today.

During a speech at a Ford electric vehicle plant in Michigan, Biden vowed to “set a new pace” for the technology and reverse what he described as the Trump administration’s “short-sighted” rollback of emissions standards.

The president also argued that the US was falling behind China, which is currently selling more electric vehicles.

“The real question is whether we’ll lead or we’ll fall behind in the race for the future, or whether we will build these vehicles and the batteries that go in them here in the United States or rely on other countries,” he said.

The $174bn plan, which was first outlined in March, forms part of Biden’s ambitious $2.3 trillion infrastructure project.

The speech today boosted investors in US electric vehicle startups Nikola Motors and Lordstown Motors, which saw their shares surge 7.5 per cent and almost 20 per cent respectively.

Biden has ruled out consumer incentives for luxury electric car models, arguing instead for government spending to encourage Americans to buy electric vehicles.

In addition to winning over potential buyers, the administration is also trying to ease concerns in the US automotive industry that the shift to electric vehicles will spark job losses.

The White House wants to encourage new battery production facilities, which are key to ramping up manufacturing.

The plan proposes cost-sharing grants to support new facilities as well as grants to repurpose closed factories for the production of vehicles and parts.

But at the heart of Biden’s plan is $100bn in consumer rebates, according to government documents seen by Reuters.

Currently the US government issues a $7,500 tax credit on electric vehicles regardless of price, though these phase out after a manufacturer sells 200,000 units. Credits for both Tesla and General Motors expired after they hit the cap.

The White House has declined to say how tax credits might be altered under Biden’s plan.

His administration is facing opposition from Republicans over the focus on electric vehicles, alongside a number of other proposals in the infrastructure bill.

Other measures in Biden’s $174bn plan include $15bn to build 500,000 charging stations by 2030 and $45bn to electrify a number of school and transit buses. He also wants more federal departments to shift to electric vehicles, including the Postal Service.