Here’s what GM thinks of the IRA
It’s a good time to be an electric vehicle. Between the passage of the Inflation Reduction Act and new funding for green public transit, the outlook for EVs of all stripes is increasingly bright. Today, we're unpacking these developments, including a chat with GM's chief sustainability officer. Let's hit the road!
What the country’s biggest automaker thinks of the IRA
With President Biden’s signature on Tuesday, the Inflation Reduction Act is finally the law of the land. In its wake, Kristen Siemen, chief sustainability officer and vice president of General Motors, is among those welcoming the legislation, which will shift the structure of the country’s $7,500 tax credit for electric vehicles and offer a windfall to domestic critical mineral mining operations.
But in recent weeks, GM has walked an awkward tightrope in its response to the IRA. President Mary Barra endorsed the legislation as a whole at a meeting with the president earlier this month, even while the powerful lobbying group she chairs — the Business Roundtable — opposed it due in part to its tax provisions.
Nonetheless, GM was also among the group of automakers that bristled at the IRA’s approach to EV tax credits, saying most vehicle models would be ineligible because of the law’s domestic sourcing requirements. (One analysis found that the IRA may depress EV adoption in the short term but give it a substantial boost by 2030.) But in a conversation with Protocol this week, Siemen was upbeat about the law: “There’s a lot of goodness there,” she said.
This conversation has been edited for clarity and brevity.
Do you anticipate that the IRA might make GM’s transition to EVs more challenging?
While some of the provisions are certainly challenging and won't be achieved overnight, we're confident that the investments that GM has been making in manufacturing and our workforce infrastructure are really going to enable the U.S. to be a global leader in electrification both today and in the future. We're excited about the provisions that will accelerate the adoption of EVs and strengthen American manufacturing and jobs: everything from the customer purchase incentives to tax credits and support for domestic mining and battery production.
There have been a number of announcements from GM and its competitors in recent months about securing agreements for battery materials. What is GM’s approach, especially given the domestic sourcing requirements instituted by the IRA?
This is why we're so excited about the announcements that GM has made in the recent past. We have binding agreements for all of the battery raw materials that support our goal of a million units in North America by 2025; that includes lithium, nickel and cobalt.
And we have agreements to supply the cathode active materials. [The Korean chemical giant] LG Chem has been a great partner with us for a number of years and to have those battery assembly plants for cell manufacturing here in the U.S. is a true sign of how far we are on this transition to EVs. I've toured a few of those facilities and things are really humming.
How are you guaranteeing that your partners are sourcing their materials responsibly?
Earlier this year, GM issued an ESG pledge to our suppliers, which includes both human rights protections and fair operating practices, as well as our suppliers’ own carbon neutral goals. As we progress with our carbon neutral goals, we're looking for our suppliers to be there with us as well. [Ed note: GM has committed to invest $35 billion in its transition to selling only EVs by 2035 and is aiming for carbon neutrality by 2040.]
Stay tuned for more from Siemen on Protocol.com later today.
— Lisa Martine Jenkins
Here’s another winner from the federal government’s new penchant for funding zero-emissions vehicles: public transit.
The Federal Transit Administration announced Tuesday that it awarded $1.7 billion to transit operators across the country, thanks to the bipartisan infrastructure law that passed in November. That’ll go toward purchasing around 1,800 buses, including 1,100 that are zero emissions; that’s a huge step forward in cutting transportation-related carbon pollution.
It almost doubles the number of emissions-free buses on U.S. roads. Transportation is the nation’s largest source of greenhouse gas emissions.
- A few of the big recipients of FTA funding include New York’s MTA, the nation’s largest transit agency, which nabbed $116 million to buy up to 230 electric buses to replace older diesel buses. That's equal to 4% of its fleet.
- L.A. Metro, which has the second-highest daily bus ridership in the U.S., received $104 million.
- Part of the funding is also going toward building and maintaining charging facilities, another key component of getting more EVs on the road. Government bureaucracy has historically gotten in the way of building out that charging infrastructure.
- Workforce development programs like registered apprenticeships and technology training, since electric buses require different maintenance, will also receive a portion of the money.
This investment is critical for the green transition, particularly for lower-income and marginalized communities that rely on public transit. “Transit is the great equalizer, making sure that Americans have an affordable option to get from where they live to where they need to go,” head of the FTA, Nuria Fernandez, said in a statement.
The funding isn’t going to singlehandedly decarbonize the transportation sector, though. There are even some provisions in the bipartisan infrastructure law that will put more fossil-fueled buses on the road.
- Republicans inserted a provision in the package that would set aside some funding — at least $1.4 billion — for buses powered by fuels like methane gas.
- Even with the bipartisan infrastructure law and IRA funding for electrified public and personal transit, transportation will still remain a large share of U.S. emissions for the foreseeable future.
- The transportation sector will likely contribute “a comparatively small share of total emissions reductions” by 2030, partly due to the time required to replace old stock, according to Robbie Orvis, senior director of energy policy design at Energy Innovation. “There’s just not enough time for large reductions to have accumulated,” he recently told Protocol.
— Michelle Ma
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