Biden barnstorms America to launch the EV revolution.
Other than kissing a baby, an American president likes nothing more than announcing the launch of a new pickup truck.
So it is no surprise to see an 80-year-old President literally running to a podium at the historic River Rouge Ford Motor plant to the beat of Stevie Wonder’s Motown classic “Higher Ground.”
“Hi. My name is Joe Biden, and I am a car guy.”
Behind him, and next to a giant American flag, is a glittering sapphire blue Ford F-150 Lightning electric-powered pickup truck. In front is the great-great-grandson of Ford founder Henry Ford — Executive Chairman William Ford. Moments earlier, Ford had unveiled the 16th generation of the legendary line of Ford pickups as a “Model T moment for the 21st century.”
With American flags fluttering and union members cheering, Biden looks out to the assembled guests to deliver a punch line he has repeatedly made whenever asked about the greening of American industry. “Thank you for showing us how we win the competition in the 21st century by rebuilding America from the bottom up and the middle out. And we are just getting started.”
Faster than anyone expected, America is riding into an electric future, turbo-charged by the most transformative change in industrial policy since the Great Depression. The biggest drivers of all are the climate laws quietly enacted by the 46th president of the United States from Scranton, Pennsylvania. One deal at a time. new carbon-free electric economy is developing one plant announcement at a time. In the last six months, dozens of deals have been announced across America. In the exurban outskirts of Phoenix, Austin, Detroit, Syracuse and Savannah, a sea of construction workers in yellow safety gear are manning cranes and earth movers, racing to build vast new EV, battery, mining and microchip facilities across America.
So far in 2022, automakers have announced more than $13 billion in domestic EV manufacturing investments and $24 billion in batteries. That’s triple the amount invested in domestic EV manufacturing in 2020 and 28 times the investment in batteries, according to a White House analysis.
Biden, Ford, and the automotive industry are on their way to winning over the hearts and minds of Americans for the most transformative economic change since the discovery of oil and coal. It is a remarkable political sleight of hand that he is spinning a new American dream without uttering the word climate change. Doomsday does not sell. Job security, family, and, yes, pickup trucks, do.
Call in Biden’s Trojan Horse.
It looks just like what America loves. But hidden under the hood was all that green stuff climate skeptics love to mock. The Biden Administration, and increasingly the Republican Party, has realized that the only road to a carbon-free future is filled with the pickup trucks that Americans have loved for more than a century — albeit with a different engine.
Different city, same message
Across America, the backdrops are different, but the message is the same. “There’s a vision of the future that is now beginning to happen, a future of the automobile industry that is electric,” Biden said at one event. Rarely, if ever, does he mention the C-word: Climate. Instead, it’s all about jobs: New Jobs, clean jobs, good-paying, family-raising jobs. It is his mantra. He hails future prosperity with a nostalgic nod to yesteryear. He reminisces about riding around Scranton in his family’s Ford Fairlane station wagon, driven by his irascible but big-hearted Dad.
The way to a carbon-free future is in a pickup truck
In a world where the climate crisis has been framed chiefly through fear, despair and sacrifice, Biden’s message was all carrot and no stick. “Look folks,” he says. “The great American road trip is going electric.”
Ford’s muscular EV is a very American climate solution. It’s big. It’s powerful. It’s fast. And it comes loaded with state-of-the-art technology. It’s what generations of working-class Americans have aspired to own. It symbolizes the rugged, do-it-yourself independence at the core of the American soul. Demand for the F-150 is so high that even billionaire ecologist Tom Steyer cannot purchase one.
But it is more than clever politics and auto marketing. The Biden administration is making the most significant economic bet of this young century. It has abandoned the sacrosanct free-market policies and globalism in favor of a state industrial policy to underwrite the green transition. America, he says, will fight climate change on American rules and American soil. Biden says there can be no climate solution without a plan to rebuild America’s middle class and keep America as the global superpower.
What is surprising is that it is working.
A new industry is born.
An unprecedented cocktail of subsidies, tax credits, grants and tough trade rules, the so-called “Inflation Reduction Act” or IRA is the most significant industrial accelerator since President Dwight Eisenhower’s building of the interstate highway system.
“America’s best climate weapon”
Biden hopes all this will create millions of jobs and jump-start America’s climate change fight alongside its political and economic standing in the world. And it will help decide who’s elected President in 2024. “EVs are good for the climate, good for jobs and good for business,” says Biden’s Director of the National Economic Council, Brian Deese. And very good for politics. “The American worker,” says Biden, is “America’s best climate weapon.”
The IRA’s provisions are expected to create more than $369 billion in clean energy investment in EVs, batteries, battery minerals, EV parts and other green technologies. It broadly encompasses 300,000 buildings as well as 600,000 cars and trucks. And its ripple effects will be exponential.
But the law comes with a twist. Everything must be “Made in America.” The IRA offers subsidies of up to $7,500 to buy an EV. But the vehicles must be built only in nations with free trade agreements with the U.S. This mostly means the United States, Mexico, Canada, and Chins. The same goes for minerals extracted for batteries.
Biden’s new laws are a stunning repudiation of 40 years of neoconservative and neoliberal policies from Presidents Reagan, Bush and Clinton. And it aims to undo what 40 years of neo-economic policies by both parties had failed to do — reverse the decline of America’s industrial base and the millions of jobs that go with it.
Super aggressive climate protectionism
The made-in-America laws have caused a surge in announcements of foreign investments in the U.S. They’ve also triggered cries of protectionism from French President Emmanuel Macron, who calls the bill “super aggressive climate protectionism,” and promises from the Biden Administration of potential “tweaks.”
At Climate & Capital, we’ll follow the money triggered by this landmark climate act. This week, we offer a first look at the deals that have been announced since the bill was passed. In the accompanying article, we have teamed up with Tim Buckley, founder of Climate Energy Finance, and Matt Pollard.