EVs Continue to Take Off, Possible Biden Victory Would Boost Industry

General Motors (GM) is pushing ahead aggressively with the development of electric vehicles, with its Detroit factory – recently renamed “Factory Zero” — being retooled to begin to build its Hummer EV electric truck late next year. It’s a $2.2 B investment and the plant will eventually employ 2200 workers when it re-opens next year. GM’s EV hummer went on the market last week and the first run of vehicles sold out in a matter of hours, despite the hefty price tag. GM is not alone — Ford announced last month it is planning a new EV factory at an existing facility in Dearborn, Michigan, where they will build new all-electric F-150 pickups.

Why This Matters:  The investments in electric vehicles are clearly market-driven, but it cannot hurt to have Presidential frontrunner Joe Biden on the campaign trail talking about using the federal purchasing power to transition the federal fleet to electric vehicles.  Ironically, even the mining industry sees a silver lining in all the talk about EVs and renewable electricity — they expect their industry to grow along with the demand for minerals needed for batteries to power EVs and homes on renewable electricity.  So while some might worry about Biden’s emphasis on transitioning off fossil fuels, many in business are starting to plan on it.

EV Manufacturing Ramps Up

CNN Business reports that GM’s Factory Zero will run on 100% renewable energy, such as wind and solar power, by 2030, as will all of GM’s factories. Better yet, the plant also includes a 16.5-acre wildlife habitat that is home to foxes, wild turkeys, and monarch butterflies, GM told CNN.  In addition, GM last week announced plans to invest $150 million into five Michigan plants, including Orion Assembly for electric production, and $2 billion into its Tennessee plant for the production of electric Cadillacs. GM wants to produce 20 electric models by 2023, but ironically to do that it will have to have a successful lineup of pickups and SUVs to support the electric vehicles until they are profitable.  GM also announced last week that reservations for the first year of a special edition Hummer EV, which runs $112,595, immediately sold out.  At the same time, GM’s stock price rose nearly 5% after that, according to CNBC.

Mining Also Looking Ahead

Rare earth minerals, as well as lithium, copper, and nickel, are key to the ability of the U.S. to develop batteries for the future. And one of the key issues is procuring these minerals from domestic suppliers, which Reuters reports is also a top priority for Vice President Biden because the United States currently imports them from China and other countries. For example, “executives at Glencore Plc, which controls PolyMet Mining Corp, view its Minnesota copper mine project as a long-term investment and have no plans to scale back if Biden wins, a source familiar with the company’s thinking told Reuters.”  In addition, Reuters reports that “ScotiaBank analysts project the Biden plan will spark a multi-year boon for copper, one of the best electrical-conducting metals. EVs use twice as much copper as internal combustion engines.”

To Go Deeper: Read this interesting Medium post about the need to educate Americans about EVs — for example, 42% believe EVs need gasoline to run.

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