The United States government is the world’s largest buyer of goods and services. What it buys can change what’s for sale. And in his first week in office, President Biden has ordered it to buy electric cars made in America.
Speaking at an event where he signed an executive order designed to boost American manufacturing, Biden said, “The federal government also owns an enormous fleet of vehicles, which we’re going to replace with clean electric vehicles made right here in America, by American workers.”
According to the most recent edition of the General Service Administration’s annual report, the government owns about 645,000 vehicles. They range from 18-wheelers to ordinary passenger sedans. The fleet also includes purpose-built vehicles like postal service mail trucks and commercially-available vehicles you could buy today.
No Timeframe on Replacement
About 224,000 are sedans. About 412,500 are trucks, including more than 272,00 light trucks. Replacing them all will be a huge endeavor. Biden’s comments gave no indication of a timeframe for the replacement. But, we don’t anticipate the government dumping all of its gasoline-powered vehicles on the used market and replacing them en masse with electrics. Rather, federal agencies may simply replace gas-powered vehicles with EVs as they wear out.
Still, Biden called the move “the largest mobilization of public investment in procurement infrastructure and R&D since World War Two.”
In some ways, the federal government is the ideal customer to help automakers build up their EV manufacturing capabilities. Perhaps the primary limitation on EV growth is charging infrastructure. Most American homes don’t yet have access to the supercharger devices need to efficiently recharge EVs. But the nature of fleet vehicles, which return to a central location when not in use, makes keeping them charged an easier proposition.
Even the President’s requirement that the EVs come from U.S. manufacturing is becoming an easier hurdle for automakers. Ford, for instance, recently announced plans to begin building an electric version of its Transit cargo van in the United States, rather than importing the model from Europe.
