How Biden’s Infrastructure Bill Will Affect the Auto Industry

On 15th November 2021, President Joe Biden, surrounded by policymakers and government officials, signed the 1.2 trillion bipartisan Infrastructure bill into law.

In a previous press release, Biden said the bill was “a once-in-generation bipartisan infrastructure bill that will create millions of jobs, turn the climate crisis into an opportunity, and put us on a path to win the economic competition for the 21st Century.”

The bill was almost aborted due to a stalemate between liberal and conservative Democrats, as six of them voted against the bill. Speaker of the house, Nancy Pelosi, and President Joe Biden had to step in to resolve the issue. Finally, the bill went to Biden for signature with a poll of 228-206 with thirteen Republicans in opposition to the passage.

Most importantly, the Infrastructure bill set aside several billions of dollars for public projects over an eight-year period. For example, a staggering $110 billion has been set aside for road safety and bridge repairs, while $66 billion dollars was reserved for the repair and expansion of network services by Amtrak.

However, the auto industry has not been left out of the bill. Over 70 billion dollars have been designated to ramp up the manufacture and sale of Electric Vehicles by upgrading the power and building as many charging stations as they can.

In this article, we will look at how the infrastructure bill has affected the auto industry, as well as how successfully the industry is responding to the bill’s explicit requirement.

Continue reading to learn about the bill’s major automotive supply components.

EV Charging Stations

The Biden administration’s effort to build over 500,000 electric vehicle charging stations in the next five years is worth noting. The bill has made $7.5 billion dollars provisions for a statewide network of electric vehicle charging stations.

One of the biggest drawbacks of having an electric vehicle is the lack of charging outlets, especially for longer trips. In the United States, there are around 216,000 charging stations, an insignificant figure compared to the number of gasoline fueling stations.

On a 100 percent charge, an EV would last no more than 3hours and 20 minutes, equivalent to a 226-mile journey.

As a result, Biden stated on 6th November that “we’re going to build out the first-ever national network of charging stations all across the country — over 500,000 of them. … So, you’ll be able to go across the whole darn country, from East Coast to West Coast, just like you’d stop at a gas station now. These charging stations will be available.”

He also stated that a $7.5 billion investment grant would be given to companies that will provide facilities for EVs and alternative fuel vehicles. Consequently, more than half of all new car sales in the United States will switch to electric cars by 2030

However, pundits and analysts doubt the possibility of that happening in the given timeframe.

According to the International Council on Clean Transportation, there must be 2.4 million electric vehicle charging stations by 2030 if about 36% of new car sales are electric.

Furthermore, the expense of either constructing an EV charging station from the ground up or converting an existing station might be as high as $2 million. The California Fuel Cell Partnership conducted this study.

However, as additional stations are created, the price may come down.

Electric Grid Upgrade

As part of the bill’s $73 billion allocation for the automotive industry, $65 billion was designated for the research and creation of cutting-edge renewable clean energy technology.

There are different types of electric vehicles in the market, from all-electric vehicles to gasoline-reliant hybrid-electric vehicles. Additionally, we have fuel cell electric vehicles (FCEV) that use fuel cells to generate electricity instead of rechargeable batteries.

These fuel cells use a hydrogen-oxygen reaction to generate electricity; hence they can be recharged at hydrogen fuel stations. Unfortunately, only a handful of hydrogen cars and stations are available. The Hyundai Nexo and Toyota Marai are the only FCEV vehicles on the market.

Gilbert Castillo, a senior group manager of product strategy & regulatory compliance for Hyundai Motor North America, sums it up nicely: “Ten years from now, we would hope to see hydrogen fuel cell vehicles available in several states, but it certainly wouldn’t be a national solution.”

Vehicle Safety

Vehicle safety is one of the major concerns the bill addressed. For instance, statistics have shown that road crashes are the leading cause of death in the U.S. for people aged 1-54. More than 38,000 people die every year in crashes on U.S. roadways. Additionally, the U.S. traffic fatality rate is 12.4 deaths per 100,000 inhabitants.

As a result, the U.S. The Department of Transportation has been given a deadline by the legislation to develop standards that would govern keyless ignition systems with an automatic shut-off option. There will also be new headlight restrictions, which will help to decrease car collisions.

Many automakers have gone ahead and installed automatic braking systems in the majority of their vehicles in the event of an impending collision.

Also, in research conducted by the National Highway Traffic Safety Administration (NHTSA), around 10,000 people are killed due to alcohol-related crashes in the U.S. This makes up for 30% of all road accidents.

According to the National Public Radio (NPR), the legislation also requires automakers to install breathalyzers, also known as alcohol detection devices, in all new vehicles in an attempt to reduce drunk driving deaths.

In Conclusion

With the passing of this bill, the Biden administration has reached a critical milestone. In a statement, the president described the bill’s passage as “a significant stride forward as a nation.”

The auto industry is one of the biggest beneficiaries of this move, with improvements set to be made on everything from electric vehicles to overall vehicle safety. It’s time for auto companies to prepare by building resilience into their global supply chains, to ensure they’re not left behind.


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