President Joe Biden said on Monday that internal combustion cars and trucks in the federal government’s existing vehicle fleet will eventually be replaced by electric vehicles (EVs).
Biden made the comments after signing his last executive order. Directly titled “Buy American”, it is an initiative designed to support the domestic industry, including the thriving EV segment.
“The federal government … has a huge fleet of vehicles, which we will replace with clean electric vehicles manufactured here in America by American workers, creating millions of jobs, one million jobs for automotive workers and clean energy and vehicles with zero net emissions “said Biden.
Image source: Getty Images.
At the moment, federal government standards dictate that he buy cars in which at least 50% of his parts are made in the USA. Biden has promised to raise that standard, although exact details have not been provided.
Nor did the president offer a deadline for the change to be fully realized. It is likely to take many years, given the size and scope of the federal fleet.
However, if the program proceeds relatively smoothly to any degree, it will make the federal customers reliable and stable EV manufacturers. Tesla (NASDAQ: TSLA) it is currently the poster boy for the segment, although the company seems determined to serve the more affluent consumers. Last November, for example, it stopped selling the budget version ($ 35,000) of its Tesla Model 3.
So General Motors (NYSE: GM), which is very active in the alternative fuel space and has decades of experience in mass market pricing, can be a big winner in the federal game.
The country’s automakers, including Tesla and General Motors, have not yet formally responded to Biden’s announcement, although investors will certainly be satisfied with the next initiative.