On Jan. 25, 2021, U.S. President Joe Biden signed an executive order dubbed Buy America. This order establishes new guidelines to be followed while the government spends its allotted budget for purchasing goods and services. In that executive order, President Biden directed that the entire government fleet should be replaced with electric vehicles, a move that could see an additional 645,000 EVs added onto U.S. roads.
This would translate to a 40% increase of electric vehicles that are currently in use within the country.
The executive order was scant on details regarding how the replacement of the fleet would be implemented. For example, it wasn’t clear whether all the government-owned vehicles would be replaced at one go, and neither was it clear whether the guidelines allowed government departments to include plug-in hybrids or only fully electric vehicles.
At the moment, the entire U.S. government owns a paltry 4,500 all-EV and hybrid vehicles. This is according to figures released by the GSA (General Services Administration). This number accounts for only 1% of the fleet of vehicles owned by the government. Reuters estimates that if the entire lot of government-owned vehicles is to be replaced with EVs, approximately $20 billion will need to be forked out.
If the government succeeds in switching to electric vehicles, its expenditure on fuel will decline by a whopping $795 million, as that is what was spent for fuel in 2019. The government also stands to drastically reduce the emissions of its fleet. While the GSA doesn’t keep track of this metric, industry averages put the total emissions from government-owned vehicles at about 1.7 metric tons of greenhouse gases, according to the figures of the number of vehicles the government owned in 2019.
Another big benefit of the purchase order issued by the new president is that electric vehicle makers in the United States will see a major boost to their operations and bottom line. For comparison purposes, U.S. manufacturers only have a 20% share of the global EV market, while those in China lay claim to double that number, at 40%.
The purchase of such a large number of U.S.-made electric vehicles would therefore be a big shot in the arm for the EV sector, and the number of players in the industry is likely to grow to meet that additional demand since the presence of so many government-owned EVs is likely to give members of the public confidence to make the switch as well.
Interestingly, research and development of medium and heavy vehicles will also have to be ramped up, since the government owns a huge number of trucks, such as those used by the U.S. Postal Service. Many of those trucks are notoriously old, and one would imagine that they might be first in line to be replaced under the new guidelines issued by Biden.
For firms such as ev Transportation Services Inc., which makes light-duty EV commercial vehicles that can serve the needs of various sectors, such as security, the executive order signed on this week 25 is likely to be welcomed as the company may be positioned to benefit from the planned government spending.
NOTE TO INVESTORS: The latest news and updates relating to ev Transportation Services Inc. are available in the company’s newsroom at https://ibn.fm/EVTS
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