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What does a Joe Biden presidency mean for the car industry?

Our industry columnist predicts a greener future

Will we see far better (and more efficient) cars in the next four years? PHOTO BY ADAM SCHULTZ

It’s all over except for the inauguration. The American people have elected Joseph Robinette Biden as the 46th president of the United States of America. In just about 70 days, Donald Trump becomes the 11th first-term US president (read: one not to be reelected). It was also an election that saw a record turnout of voters, with President-elect Biden receiving—as of the latest count—74.5 million votes versus President Trump’s 70 million. It will be the highest number of votes that any winning American president has ever won.

The USA elections riveted not only the American population but much of the world, too, including a good number here in the Philippines. Many were expectantly waiting to know if America would be pushing four more years of the Trump administration’s policies or potentially seeing a significant pivot under a Biden and Democratic term.

Based on the campaign, the espoused positions of the incoming President-elect and the outgoing President on many issues were poles apart. First—and, perhaps, most critical to the electorate—is, of course, the approach to bringing the COVID-19 pandemic under control. Biden has clearly stated that he will listen to the science where the current administration seemed to let Americans make their own decisions, favoring the reopening of the economy sooner than later.

The domestic policies pertaining to healthcare and immigration are also expected to see significant changes. Universal healthcare was an important part of Biden’s campaign, whereas the current administration pushed for more private coverage. Immigration has been another issue that saw Democrats and Republicans at odds with each other’s approach (tolerance versus restrictive). Then, there is the most divisive social issue of racism—again, a source of much-heated discourse and activism.

In the international field, the global community is probably heaving a sigh of hope that the US will pivot away from its unilateralism in the past four years in favor of the multilateralism that had characterized previous administrations. Trade relations with China, the rest of the Americas, and Europe can be expected to thaw. Similarly, foreign relations are hoped to warm and alliances rebuilt. A return to globalization is likely to happen after years of populism and isolationism.

The incoming US president sounds like he intends to help make cars cleaner. PHOTO FROM JOE BIDEN

But the one policy that the automotive sector eagerly awaits is the new administration’s approach to climate change and the environment. Trump pulled the United States out of the COP21 Paris Agreement. COP21 was significant in that it brought the world together in an unprecedented effort to address the ills of the environment.

The COP21 Paris agreement set out a global framework to limit global warming to well below 2°C, and pursue efforts to limit it to 1.5°C. The signatories to the Agreement account for 97% of global greenhouse gas emissions. The US, China and India—three of the four largest emitters of greenhouse gases—all acceded to COP21 back in 2015, until the administration of Trump notified the United Nations of its withdrawal.

Under Biden’s administration, it is widely expected that the US will once again take its place in the global community supporting critical environmental initiatives. During the presidential campaign, Biden made this clear. In fact, he courted the ire of Texan voters when, during one of the presidential debates, he said that he would transition away from the oil industry. The context, of course, is that the oil industry pollutes and that there will be a managed shift to alternative energy.

If Biden delivers on his campaign promise…the march to alternative fuels will step up, and the drive toward electrification will almost certainly speed up

Back in 2018, Trump rolled out his plan to reverse ambitious tailpipe emission standards imposed by Barack Obama on the automotive industry. Among others, the plan of the incumbent (and outgoing) administration was to roll back fuel economy targets on cars and trucks. It also aimed to strip California of its special authority to set its own fuel economy goals. Trump’s administration announced its policy in final form in April 2020, setting the new Corporate Average Fuel Economy at 40mpg (17km/L) by 2025—a goal that, apparently, the car industry was set to achieve even without any regulatory prodding from government.

If Biden delivers on his campaign promise, the world will rejoice in the possible return of the United States to the COP21. The auto industry may again face more challenging CAFE standards. The march to alternative fuels will step up. Car companies will be on notice, and research and development on new drivetrains will take center stage. The drive toward electrification will almost certainly speed up.

Is the win of President-elect Joe Biden a good thing for the car business? Well, it just may be the way of the future. It is what it will be. After all, mobility for all must be sustainable.



Vince S. Socco

Vince is the chairman of GT Capital Auto Dealership Holdings, a post he accepted after his retirement from Toyota Motor Asia-Pacific. His career began in 1979 with Delta Motor Corporation (Toyota). He mentors everyone—in real life and through his column ‘Navigator’.



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