November 16, 202020
Lucid Motors Inc. “It takes some of the uncertainty
out because you know you’ll get some support.”
Biden has already outlined a plan that will
replenish money for a tax credit that gives con-
sumers $7,500 for buying an electric vehicle, and
he wants to build 500,000 charging stations across
the U.S. That will help GM and Tesla, who have
already burned through their credits, and enable
other carmakers to sell more EVs with government
help. It’s a much-needed shot in the arm for an
industry that’s building expensive battery-pow-
ered cars with little consensus on how many con-
sumers will actually buy them.
California-based Lucid plans to sell its $69,000
Air sedan in 2021. Other startups, including Fisker
Inc. and Lordstown Motors Corp., plan to sell EVs
in the next several years. Investors poured money
into publicly traded special-purpose acquisition
companies, which then acquired Fisker, Nikola
Corp., and others and took them public. All of these
startups will benefit from Biden’s plan. “We expect
the Biden administration to be more aggressive
than the Trump administration on these matters,”
says Nikola Chief Executive Officer Mark Russell.
As much hype as electric vehicles have gotten,
major automakers have been spurred to sell them
more by governmental and investor pressure than
true demand. Tesla’s sales have grown sevenfold
since 2015, on track to hit 500,000 vehicles this
year, and its about $390 billion market cap tops
those of all its rivals. But its global production is still
less than 5% of GM’s. Yet governments in China and
Europe are mandating electric drive systems, com-
pelling every company to develop them quickly.WhilefutureU.S.salesofEVsremainuncertain,
automakers plan to offer 121 models in the U.S.
market by 2025, according to forecaster LMC
Automotive. They will add production for more
than 1 million of them by the end of Biden’s first
term. That’s more than four times the number the
U.S. industry sold last year. Since electric models
therecurrentlysellforthousandsmorethanthe
$36,000averagestickerpriceofa gasolineburner—
andmostlosemoneywhiledoingit—automakers
are more than a little nervous.
The next four years are critical for EVs. The
industry could achieve cost parity with internal
combustion vehicles around 2025, says Akshay
Singh, a partner with PwC Strategy. But that
requires building consumer demand and continu-
ing to drive down costs, particularly for batteries.
That’s why an expansion of the tax credits is so
important, says Jeff Schuster, president of global
vehicle forecasting at LMC. The big winners under
Biden’s plan would be Tesla and GM. They moved
first selling EVs and have used up the maximum
200,000 tax credits awarded to customers of a sin-
gle automaker under the current program. Both
companies are at a disadvantage in the market
now, Schuster says. And they could really suffer
once rivals such as Ford Motor Co., Amazon-backed
Rivian Automotive Inc., and a few other startups
begin selling electric pickup trucks.
“We’re looking forward to working with the
Biden administration and working toward a pol-
icythatpushesgreateradoptionofEVs,”says
KenMorris,GeneralMotors’vicepresidentfor
electric- andautonomous-vehicle development.◀ GM’s Detroit-
Hamtramck Assembly
Plant is being converted
into the company’s
first dedicated EV
production facility▼ Number of battery-
EVmodelsavailable in
theU.S.
◼ Forecast120600
2015 2025