Electric car subsidies in the USA: How German automakers are preparing for Joe Biden’s infrastructure plan

US President Joe Biden (78) becomes a big donor in the corona crisis: to help the USA to recover after the corona turmoil, he wants to help the US economy with three trillion dollar economic stimulus packages on its feet. Congress has already approved the first $ 1.9 trillion corona rescue package.

Biden presented his second package at the end of March, which is primarily about infrastructure investments amounting to 2.3 trillion dollars. Manager magazin reported on the details in detail. It is still unclear how much of Biden’s plan for the rehabilitation of the US infrastructure will be implemented in the end. Because the decision of the US Congress is still pending, the Republicans have clearly criticized some parts of the plan in the past few days.

Part of Biden’s infrastructure plan, however, are also subsidies worth billions, which should make German car manufacturers sit up and take notice. Because the US president wants to invest a whopping 174 billion dollars to “win the electric car market,” as he said. The US President’s goal is not just to have half a million charging stations set up in the country by 2030. He also wants to convert 20 percent of the US school bus fleet to e-drives, replace 50,000 diesel transit vehicles with e-vans and electrify part of the fleets of US authorities and state-owned companies such as the US Post Office.

In addition, Biden is also considering extending the previous nationwide tax credit of $ 7,500 per all-battery vehicle. Until now, car manufacturers could only grant this credit in full if they had sold fewer than 200,000 e-cars in total, after which it gradually decreased. Biden wants to abolish this restriction. However, he only wants to grant discounts for electric cars that are produced in the USA.

This could result in good sales opportunities for the large German automakers that operate their own car plants in the USA. These are currently Daimler with its plant in Tuscaloosa, Alabama, BMW with its SUV-specializing factory in Spartanburg, South Carolina, and the Volkswagen Group, which operates a large car plant in Chattanooga, Tennessee.

manager magazin asked all three automakers which electric car models will be rolling off the assembly line in the USA in the near future and whether the plans are likely to change now. The answer to possible changes was clear: Since the infrastructure plan has not yet been approved by Congress, it is still too early for any changes to the production planning. “Mercedes-Benz AG welcomes the programs announced by the US administration to promote EVs in the USA, which support our strategy of electrifying our product portfolio,” said Daimler in an email. “We are monitoring the situation,” said the Volkswagen Group, and BMW made a similar statement.

BMW is the most cautious about US production plans

All three manufacturers have long been planning to produce purely battery-powered electric cars in the USA as well. BMW was the most reluctant to start with: The plug-in hybrid versions of the X3 and X5 are currently rolling off the assembly line in Spartanburg. “In the short term we have no plans for a fully electric vehicle in Spartanburg,” said BMW.

However, Spartanburg is one of the most important plants for Bavaria; last year the plant was once again the largest car export plant in the USA. And BMW boss Oliver Zipse recently accelerated his electric car timetable: BMW wants to cover 90 percent of the market segments with fully electric models as early as 2023, and by the end of 2025 BMW wants to have delivered around two million electric cars to customers, ten times as much as in 2020 In 2030, every second BMW sold worldwide is to be delivered with a fully electric drive. This suggests that pure electric models will also roll off the assembly line in Spartanburg pretty soon.

VW also wants to manufacture ID.4 in Chattanooga from next year

At Volkswagen, at least one fully electric model is currently planned for US production: the ID.4 electric SUV will be built in Chattanooga next year. In recent years, the plant has already been converted so that vehicles based on the modular electrical construction kit (MEB) can be manufactured there. This suggests that more electric models are planned for US production. It is easy to imagine that the models ID.4X and ID.4 Crozz, both electric SUVs, which will soon be presented in China, will also be built in the USA, according to the company.

Especially since Volkswagen has now been able to overcome a hurdle thanks to the help of the US President. Because the dispute between the South Korean battery suppliers LG Energy Solution and SK Innovation (SKI) over patents has now been settled. Volkswagen was directly affected by this: Finally, the dispute arose over a planned SKI factory in Georgia, which is to supply large quantities of battery cells for VW’s plant in Chattanooga.

Daimler plans major e-model premium “made in USA”

Daimler is currently preparing the production of two all-electric models in the USA: The SUV versions of the EQE and EQS are to be produced in Alabama from 2022. Daimler will be presenting the sedan version of the EQS, a kind of S-Class with a pure battery drive and a range of 700 kilometers, to the public for the first time on Thursday next week. SUVs with plug-in hybrid drives are already being manufactured in Tuscaloosa. According to information from Daimler, a battery factory is currently being built near the US plant, which will supply “highly efficient battery systems” for both EQ SUVs. From the second half of 2023, Daimler will also build the eSprinter electric van in its US van plant in Charleston.

In addition, the series production of two fully electric trucks from the Daimler Freightliner brands is planned for the second half of the year: the eCascadia for long-distance transport and the eM2, which is to be used in urban distribution transport.

The German carmakers are also converting heavily towards electric drives in the USA – and are likely to accelerate some projects as soon as Biden’s billion-euro funding has been approved by the US Congress.


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