Here’s why Biden’s climate executive order to replace government fleet with electric vehicles made only by unionized automakers may be bad for the EV industry
Back in December 2020, we wrote about President Biden after he promised to build 550,000 electric vehicle (EV) charging stations and create over 1 million jobs by investing in clean energy research over the next few years. Then in January, Biden signed a climate executive order to replace government fleet with electric vehicles as part of the new “Buy American” executive order.
The new executive order aims to mitigate the impact of climate change and strongly encourages the federal government to buy only zero-emission vehicles, stimulate the economy by creating up to 1 million new jobs.
“The plan shall also aim to ensure that the United States retains the union jobs integral to and involved in running and maintaining clean and zero-emission fleets, while spurring the creation of union jobs in the manufacture of those new vehicles. The plan shall be submitted to the Task Force within 90 days of the date of this order.”
However, what is not getting a lot of attention about this climate executive order is that electric vehicles have to be made mostly in the US by unionized workers. One of the Biden administration officials also said that the move is part of Biden’s broader push to drive up wages, create more union jobs and strengthen U.S. supply chains.
History has shown that companies that enter collective bargaining with unions usually end up with less freedom in hiring and firing. In addition, union workers also demand higher wages and benefits. The prevailing-wage requirement in the executive order may result in confusion and delays.
Today, there are only a handful of all-electric vehicles being assembled in the U.S. Tesla, General Motors and Nissan Motor produce EVs domestically. The mandate to buy electric vehicles manufactured in the U.S. from only unionized automakers may potentially leave out electric car giants like Tesla and Nissan Motors. In the end, the government will be left with legacy automakers like General Motors and Ford.
Below is a related video about why the government is not the answer for EV adoption.