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Biden’s ‘Buy American’

Posted January. 27, 2021 07:32,   

Updated January. 27, 2021 07:32


U.S. President Joe Biden announced to replace the government’s fleet of cars and trucks with electric vehicles. They should be zero-emission vehicles produced in the U.S., which means at least half of the parts are made domestically. This would not have a significant impact as of now because the government vehicle market is small, but the U.S. electric vehicle market is projected to expand.

According to media outlets including CNBC, President Biden announced this plan as he signed a new “Buy American” executive order on Monday (local time). “Buy American” means that all products that the federal government purchases for public services should be made in the U.S. It is a plan that the federal government will step forward and use American electric vehicles as the government plans to protect workers and jobs by purchasing American products first.

But Biden did not mention specific details such as until when he plans to convert government vehicle and which vehicle types would be switched. As of 2019, the federal government owned more than 440,000 vehicles including military and post office vehicles. Considering that Tesla, General Motors and Nissan are the automakers producing vehicles in the U.S., it would take considerable time and cost to switch all government vehicles. “The fleet changeover will assist the government’s plan to create one million new jobs in the U.S. auto industry,” Biden said.

American auto brands have struggled to compete with overseas brands such as German, Japanese and Korean companies. As Tesla trail-blazed the electric vehicle market, the U.S. now has a new opportunity.

Hyundai and Kia Motor Company, the fourth player in the electric vehicle market, has no electric vehicle production facilities in the U.S. An insider of the company said, “If the electric vehicle market in the U.S. greatly expands, we would have to proactively review local production targeting the U.S. market.”

jarrett@donga.com · sanghun@donga.com