This year, the White House announced that President Joe Biden had a “goal of having 50% of all new vehicle sales be electric by 2030,” but do the United Auto Workers strike talks indicate that the nation isn’t quite ready for a transition to electric?
Guy Williams, president of Gulf Bank and Trust, joined WWL’s Newell Normand this week to talk about it.
“I think this transition could be managed a lot better with a little better pace and a little better planning of the infrastructure that needs to go in beforehand,” said Williams. “And because we didn’t do that, hitting the unintended consequences and there always are almost always adverse consequences.”
While the Biden administration hopes the switch to electric vehicles will “spur domestic manufacturing, strengthen supply chains, boost U.S. competitiveness and create good-paying jobs,” this plan seems to have hit a snag.
In Michigan, members of the UAW are seeking new contracts with Ford, GM and Stellantis (also known as the Big Three). They want the companies to get rid of tiered wages, and to get cost of living wage increases. The are also calling for a “just” transition to making electric vehicles.
That’s where things get particularly tricky, Williams explained.
“The state of the game right now, he's looking for about a 40% increase over four years. The offers are from 9% to 16% from the different carmakers. So, there’s a big discrepancy between the offers. But there’s also a bigger challenge. And this is where politics, union might, and the economy come together,” he said. “The electric cars are the future because the government has said they have to be. But electric cars require fewer workers to build and maintain.”
Union members want to lock in the number of workers. However, Williams said the electric cars are expensive for the auto companies to make.
“It’s a tough situation and the carmakers are thinking, ‘Well, we really can’t afford a 40% increase, particularly as we’re transitioning to selling more and more cars that we don’t make money on,’” he told Normand.
One of the issues impacting the sale of electric cars once they’re on the market is the power grid. Right now, there are limited options for charging, thus making them a tough sell for many consumers.
“Let’s imagine the electric transition occurs,” Williams said. “We need a tremendous number of charging stations. We need them during the day when electricity demand is already strong. And yet, we haven’t hardened the grid.”
According to the White House, “electric vehicle sales have tripled and the number of publicly available charging ports has grown by over 40% since [Biden] took office,” and “there are now more than three million EVs on the road and over 135,000 public EV chargers across the country.”
There was $7.5 billion in funding included for the plan to manufacture more electric vehicles in the U.S. through the Infrastructure Investment and Jobs Act that was signed into law in November 2021, per the Bureau of Labor Statistics.
Still, Williams thinks a lot of work needs to be done to prepare the U.S. for the electric vehicle transition. Listen to his talk with Normand – which also covers the state of the labor marker and student loan payments – here.