Weekly Brief: Auto Industry Readies for a Different Hand on the Wheel

Joe Biden defeated Donald Trump to become the next president of the United States.

President Trump has refused to concede the election and continues to make unsubstantiated claims of voter fraud in the face of overwhelming evidence that none exists. Attempts to litigate the election will probably last weeks, although they have little chance of changing the result according to legal experts on both sides of the aisle.

When Biden is sworn in as the 46th president of the United States in January, 2021, it will mark the end to a presidency whose daily chaos and vitriolic tenor are unrivaled in American history. A Joe Biden administration will usher in a host of new policies and agenda priorities, from climate change and immigration to health care and foreign policy. The auto industry is bound to feel the impact.

Emissions and fuel economy standards will be the most immediate change. Trump, who didn’t believe in climate change and stripped the Environmental Protection Agency of advocates for the environment, made it a priority to relax vehicle emissions standards far below what Obama had set previously. Expect Biden to tighten those emission standards again. Also expect him to drop the Trump government’s lawsuit against California’s Clean Air Act waiver; a lawsuit that many carmakers, including General Motors, Toyota, Hyundai and Fiat Chrysler Automobiles, supported.

A Biden administration could serve as a turbo boost for the EV revolution in America. The president-elect said on the campaign trail that he will embrace EVs as a key component of his clean energy agenda. He plans to increase consumer incentives and integrate zero-emission vehicles into government fleets. In addition, he has proposed a $1.3Trn infrastructure plan that will call for the construction of half a million new EV charging stations on American roads by 2030.

The autonomous vehicle industry should brace for change. For the past four years, AV companies have received zero regulatory oversight from Washington. Trump’s Department of Transportation gave AV companies free reign to experiment with their technology and exempted autonomous trucks and other vehicles from existing safety standards. In return, all AV companies had to do was argue that their vehicles could achieve an equivalent level of safety – an argument that federal regulators were in no position to challenge or assess.

Biden has stated that one of his first tasks in office will be to rebuild government departments that have diminished in size over the past four years as the Trump administration ran with a mentality that the best government is no government at all. Expect a more robust DOT that takes a more active role in regulating the AV industry. An AV bill that creates a formal regulatory framework is also a possibility.

Joe Biden may have won the presidency but it looks as if the Senate will remain in Republican control, which means that if any legislation is to become law in the next two years, it will need to happen on a bipartisan basis. As it happens, one of the few things that Democrats and Republicans can agree on in Washington is self-driving cars. As of February 2020, Congress drafted and came close to finalizing a bipartisan Autonomous Vehicle bill that would have created a federal regulatory framework to govern the testing and deployment of AVs.

That bill, which was developed in concert with the AV industry, ultimately got lost in the mania of the presidential election and the Republican push to confirm Supreme Court Justice Amy Coney Barrett. Don’t be surprised to see the AV bill come back to life and make its way to President Biden’s desk in the Oval Office. Also don’t be surprised if it doesn’t. This may be a new day in American politics but partisan gridlock and lack of political cooperation are as old as the US Constitution.

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