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Biden to Visit Michigan Ford Plant in Push for Electric Cars


May 18, 2021
(Bloomberg) President Joe Biden’s visit to a Ford Motor Co. plant in Michigan on Tuesday will highlight the potential and peril of electric vehicles as the White House looks to build support for its $174 billion proposal to transform the automobile industry even as a global chip shortage hinders production.

Biden will get a sneak peek at the F-150 Lightning — an all-electric version of the pickup that has been the best-selling vehicle in the U.S. since the Reagan administration — during his visit to Ford’s new Rouge Electric Vehicle Center in Dearborn.

Ford has heralded the new model, which is to go on sale next year, as a turning point in the electric-vehicle revolution, and the White House is hoping the rollout can strengthen Biden’s push to spend billions of dollars on tax credits and charging stations.

A Car Dealership As Auto Recovery Looks To Be Underway
2020 Ford Motor Co. F-150 trucks sit outside the showroom at a car dealership in Peoria, Illinois, U.S., on Thursday, May 14, 2020. With losses mounting and North American factories idle in the face of coronavirus shutdowns, Ford shareholders gathered for their virtual annual meeting Thursday.

The ultra-popular pickup is in many ways an ideal opportunity for Biden to paint his infrastructure effort as a boon for the middle class. The F-150, which generates $42 billion a year in revenue, sells strongest in red states, with Texas being its No. 1 market — an image that helps counter lingering perceptions that electric vehicles are largely the purview of coastal elites.

“The president is going there because electrifying America’s best-selling vehicle is an important part of his priorities, an important part of his focus,” White House press secretary Jen Psaki told reporters last week.

The new truck will be built by union laborers at the new 500,000 square foot facility, where the company says it expects to spend $700 million and create 300 jobs. Biden’s infrastructure program includes grants for uipgrading and reopening facilities, low-cost credit to manufacturers who domestically produce clean energy vehicles, and would spend $15 billion installing half a million public chargers and $100 billion on customer rebates for electric vehicle purchases.

“The fact that he’s coming shows the commitment and the interest that our government has in the electrification of the auto industry,” Ford Executive Chairman Bill Ford told a shareholder meeting last Thursday. “And the fact that we’re taking America’s favorite vehicle, and has been for many years, and we’re electrifying it, really is a huge exclamation point. And that certainly hasn’t been lost on anyone, including the president of the United States.”

But Biden’s visit to the plant to promote emerging technology comes as a global computer chip shortage is hobbling the auto industry. A new estimate last week said the cost to automakers could reach $110 billion.

Ford said the shortage of chips will cut its production in half in the second quarter and cost the company $2.5 billion in earnings this year. Ford has built 22,000 vehicles without semiconductors — including thousands of F-150 pickups — and parked them in lots waiting for the chips to arrive. The company predicted the shortage would reduce production by 1.1 million vehicles this year.

The shortage has affected automakers and slowed production across the globe, including Chinese electric vehicle start-ups like Xpeng Inc. and Nio Inc. seeking to compete with U.S.-based Tesla Inc.

The Biden administration has said it intends to move more semiconductor manufacturing to the U.S. amid the crisis, while acknowledging supply issues are likely to last for months. Commerce Secretary Gina Raimondo will hold a summit on Thursday with companies affected by the shortage, including Ford.

Biden has proposed $50 billion in semiconductor research and development funding as part of his infrastructure proposal. The measure, which Congress passed but has yet to provide funding, might be separated from the infrastructure package and instead be included in a broader China competitiveness bill.

The White House framed Biden’s overall push for electric vehicles as a central effort in that competition in a fact sheet released shortly before the president departed for Michigan.

“Despite pioneering the technology, the United States is behind in the race to manufacture these vehicles and the batteries that go in them,” the White House document said. “Today, the U.S. market share of plug-in electric vehicle sales is only one-third that of the Chinese EV market.”

Biden’s visit to Michigan is expected to be less dramatic than the tension-filled tour Donald Trump took a year ago of a Ford factory making ventilators for coronavirus patients. During that visit, Trump declined to wear a mask while in view of the press and expressed his displeasure with Ford siding with California on tougher fuel-economy regulations.

“I don’t think there will be that kind of tension,” said Michelle Krebs, executive analyst with Autotrader, a unit of researcher Cox Automotive. “For one thing, they’ve had Biden’s ear on the chip shortage. And he is pushing for EV adoption, which is not what we had under the previous administration.”

Bill Ford applauded Biden’s decision to rejoin the Paris Climate Agreement.

Yet Biden may face a less warm reception outside the plant. Southeastern Michigan is home to one of the largest Arab American immigrant communities in the country, and hundreds of pro-Palestinian demonstrators gathered in the streets of Dearborn over the weekend to protest Israeli military efforts against the militant group Hamas in the Gaza Strip. Biden came under criticism from some within his own party for not calling for an immediate cease-fire in the conflict.

On Monday, he told Israeli Prime Minister Benjamin Netanyahu that he’d support a cease-fire between Israel and Hamas after days of calling for calm but not publicly seeking an end to the conflict, a shift in the U.S. approach to the crisis following days o.

The trip will be Biden’s second to Michigan — a state he flipped in last November’s presidential election — after a February visit to a Pfizer Inc. factory in Portage to see the manufacture of coronavirus vaccine.



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