Biden Pushes EV Plans With a Sneak Peek at Battery-Powered F-150
(Bloomberg) -- President Joe Biden’s highlighted his $174 billion proposal to transform the automobile industry in a visit to a Ford Motor Co. plant in Michigan on Tuesday, even as a global chip shortage hinders production.
Biden got a sneak peek at the F-150 Lightning -- an all-electric version of the pickup that has been the best-selling vehicle in the U.S. since the Reagan administration -- during his visit to Ford’s new Rouge Electric Vehicle Center in Dearborn.
Ford has heralded the new model, which is to go on sale next year, as a turning point in the electric-vehicle revolution. The White House hopes the rollout can strengthen Biden’s push to spend billions of dollars on tax credits and charging stations to support a broader and faster transition from gas-powered cars.
“The future of the auto industry is electric. There’s no turning back,” Biden said at the plant, declaring that the U.S. is in a race against China to lead the global market for electric vehicles.
The ultra-popular pickup is in many ways an ideal opportunity for Biden to paint his infrastructure effort as a boon for the middle class. The F-150, which generates $42 billion a year in revenue, sells strongest in red states, with Texas being its No. 1 market -- an image that helps counter lingering perceptions that electric vehicles are largely the purview of coastal elites.
Biden said the U.S. had fallen behind China both in market size for electric vehicles and in production of batteries.
“But I got news for them: They will not win this race,” he said. “We can’t let them. We have to move fast and that’s what you’re doing here.”
The new truck will be built by union laborers at the new 500,000 square-foot facility, where the company says it expects to spend $700 million and create 300 jobs. Biden’s infrastructure program includes grants for upgrading and reopening facilities, low-cost credit to manufacturers who domestically produce clean energy vehicles, and would spend $15 billion installing half a million public chargers and $100 billion on customer rebates for electric vehicle purchases.
“The fact that he’s coming shows the commitment and the interest that our government has in the electrification of the auto industry,” Ford Executive Chairman Bill Ford told a shareholder meeting last Thursday.
In remarks before Biden spoke, Ford called the F-150 the most popular vehicle in American history. “Now we’re revolutionizing it for a new generation,” he said.
But Biden’s visit to the plant to promote emerging technology comes as a global semiconductor shortage is hobbling the auto industry. A new estimate last week said the cost to automakers could reach $110 billion.
Ford said the shortage of chips will cut its production in half in the second quarter and cost the company $2.5 billion in earnings this year. Ford has built 22,000 vehicles without semiconductors -- including thousands of F-150 pickups -- and parked them in lots waiting for the chips to arrive. The company predicted the shortage would reduce production by 1.1 million vehicles this year.
The shortage has affected automakers and slowed production across the globe, including Chinese electric vehicle start-ups like Xpeng Inc. and Nio Inc. seeking to compete with U.S.-based Tesla Inc.
The Biden administration has said it intends to move more semiconductor manufacturing to the U.S. amid the crisis, while acknowledging supply issues are likely to last for months. Commerce Secretary Gina Raimondo will hold a summit on Thursday with companies affected by the shortage, including Ford.
Biden has proposed $50 billion in semiconductor research and development funding as part of his infrastructure proposal.
The White House framed Biden’s overall push for electric vehicles as a central effort in competition with China in a fact sheet released shortly before the president departed for Michigan.
“Despite pioneering the technology, the United States is behind in the race to manufacture these vehicles and the batteries that go in them,” the White House document said. “Today, the U.S. market share of plug-in electric vehicle sales is only one-third that of the Chinese EV market.”
Biden’s visit to Michigan was less dramatic than the tension-filled tour Donald Trump took a year ago of a Ford factory making ventilators for coronavirus patients. During that visit, Trump declined to wear a mask while in view of the press and expressed his displeasure with Ford siding with California on tougher fuel-economy regulations.
“They’ve had Biden’s ear on the chip shortage,” said Michelle Krebs, executive analyst with Autotrader, a unit of researcher Cox Automotive. “And he is pushing for EV adoption, which is not what we had under the previous administration.”
Bill Ford applauded Biden’s decision to rejoin the Paris Climate Agreement.
The trip is Biden’s second to Michigan -- a state he flipped in last November’s presidential election -- after a February visit to a Pfizer Inc. factory in Portage that manufactures coronavirus vaccines.
©2021 Bloomberg L.P.