- President Joe Biden plans to replace the government's vehicle fleet with electric vehicles assembled in the U.S.
- He announced the plan Monday when signing a new "Buy American" executive order.
- The government is a major purchaser of vehicles. However, replacing such a fleet with EVs assembled domestically will be costly and take time.
The government is a major purchaser of vehicles. However, replacing such a fleet with American-produced EVs will be costly and take time. There are currently only a handful of all-electric vehicles being assembled in the U.S. Tesla, General Motors and Nissan Motor produce EVs domestically, while Ford Motor and others have announced plans to do so.
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"The current offerings are pretty slim, but the industry's about to unleash an avalanche of new product, and a lot of it built in North America," Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, told CNBC. "Just about every U.S. plant is going to have a hybrid or electric product."
It's unclear whether Biden's plan includes plug-in hybrid electric vehicles, which use a combination of EV motors and traditional internal combustion engines. When discussing the plans, he referred to the new fleet being made up of electric vehicles "that are net zero emissions."
The White House did not immediately respond to a request for comment.
The "Buy America" executive order did not directly address the purchase of electric vehicles.
As of 2019, the U.S. government had 645,000 vehicles that were driven 4.5 billion miles and consumed 375 million gallons of gasoline and diesel fuel, according to the General Services Administration (GSA). About 35% of those vehicles were operated by the U.S. Postal Service, according to GSA.
Biden did not specify a time frame for switching the government's "enormous fleet" to EVs, which cost substantially more than traditional vehicles. He said the fleet changeover will assist his administration's plan to create 1 million new jobs in the U.S. auto industry.
Biden also announced plans for stricter use of American-made parts in government-purchased vehicles, which will make it even more difficult to switch over the fleet. He said the current standards require a vehicle's parts be at least 50% from the U.S.
"The content threshold of 50% [isn't] high enough, and the way we measure the content doesn't account for U.S. jobs and economic activity," Biden said. "We're going to change that as well. The executive action I'm signing today will not only require the companies make more of their components in America, but that the value of those components is contributing to our economy, measured by things like a number of American jobs created and/or supported."
GM, in a statement, said it is "encouraged by President Biden's commitment to supporting American manufacturing and looks forward to reviewing the details of the order."
Ford, which last year launched a "Built for America" ad campaign, said it "believes that investing in America, its people, goods and services, must be a national mission."
Tesla did not immediately respond to a request for comment.