Automakers push EV investments despite US electrification debate

Several automakers in the United States are pushing electrification despite the $4 billion counter plan proposed by Republicans in late May which could significantly undercut US president Joe Biden's US$174bn plan for electric vehicles and associated infrastructure.  

For more information on the state of the fleet market in the United States and other fleet and mobility topics in North America, visit the North America regional stream of the Global Fleet Conference 2021. 

The United States started 2021 with 19 full electric vehicle models for sale in addition to many hybrids, both mild hybrids and PHEVs (plug-in hybrids). Besides Tesla which boasts four of the top 10 best-selling full electric models in 1Q21, other brands making their way into the top 10 include Chevrolet, Ford, Audi, Nissan, Porsche, and Hyundai. 

In this article, we will focus on newly announced EV investment plans by Ford Motor Company and the Hyundai Motor Group. 

First of all, Ford Motor Company has adjusted its investment plan, and is now set on investing at least US$30 billion in electric vehicles by 2025 and is pushing to have 40% of its fleet fully electric within the next decade. The company also intends to create a new division called "Ford Pro" which will focus on commercial vehicles and government customers.  

Meanwhile, the Ford F-150 Lightning full-electric pickup was just launched in May. It has been drawing a lot of attention to the market as the internal combustion engine version of the pickup has been the best-selling vehicle in the United States for approximately four decades.  

2021 Ford F-150 Lightning (copyright: Ford)

The F-150, however, will be facing competitors such as the Rivian R1T and Telsa Cybertruck pickups seen hitting the streets in 2021 and 2022 respectively.  

Regarding Hyundai and sister brand Kia, it announced in May that it would invest $7.4 billion in electric vehicle manufacturing over the next four years. Hyundai, which already has a $1.8bn factory in Alabama which produces nearly half of all of its vehicles in the US, is planning to kick off production of electric vehicles in 2022. 

Currently, the two companies which make up the Hyundai Motor Group are monitoring market conditions and US government policy to prepare factory upgrades. The group's portfolio of combustion engine models is seen being cut to make space for electrified models. 

While Kia is mainly focused on transitioning from internal combustion engines to electrification, Hyundai is also eying innovation such as flying cars, autonomous driving and robotics. 

Government Incentive 

At the end of May, the U.S. Senate Finance Committee advanced a bill that would boost electric vehicle tax credits to as much as $12,500 for EVs that are assembled by union workers in the United States. 

To qualify, the bill limits tax credits to vehicles with a retail price below $80,000. The current maximum tax credit is $7,500 with no maximum price. 

Currently, it phases out for individual automakers once they hit 200,000 total EVs sold. Both General Motors and Tesla have hit the cap and currently do not qualify for the $7,500 tax credit. 

2021 Tesla Model Y, best-selling EV (1Q21) USA (copyright: Tesla)

Best-selling EV models in the US, first quarter 2021 

 
Source: Car and Driver 

As you can see, approximately 100,000 units were sold in the first quarter of the year and this number should be increasing in the months and years to come.  Besides the United States gradual exit from COVID-19 pandemic seen helping sales, infrastructure deployment (see below) as well as EV factory construction is seen strong regardless of the debate over current and upcoming federal government initiatives. 

ChargePoint, the Silicon Valley-based electric vehicle recharging company, officially went public (NYSE: CHPT) in March 2021, further supporting the US push towards electrification (copyright: Shutterstock)