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Biden to push for 50% electric vehicles by 2030

President Biden is set to announce his aim for 50% electric vehicles by 2030. Yahoo Finance’s Rick Newman shares the details.

Video transcript

AKIKO FUJITA: The Biden administration is setting ambitious targets to reduce the country's carbon footprint, calling for electric vehicles to make up half of all new US car sales by the end of this decade. Some climate activists, though, saying the goal doesn't address the urgency of the crisis. Let's bring in Yahoo Finance's Rick Newman, who is following this story for us.

And Rick, you know, we're talking about 50% by the end of the decade. And yet, today, EVs only make up about 3% of new car sales. So how realistic is this?

RICK NEWMAN: It depends on what the government does, honestly. If the industry were just left to itself, I don't think there's any way we would get to 50% of new vehicle market share by 2030. The cars are still more expensive than gas-powered cars. There's still range issues. But the Biden administration plans to do a lot to incentivize people to buy these vehicles.

So there's going to be billions of dollars for new charging stations. So there will be charging stations, in theory, wherever you might need one. That's in the bipartisan infrastructure bill that's now in Congress. Biden wants about $170 billion in addition to that. He wants new subsidies for anybody buying an electric vehicle, electrify school buses. He wants subsidies for building battery plants in the United States and all this kind of stuff.

So this-- these are the reasons that the auto industry really seems quite happy to go along with this. Because they're going to-- they think they're going to get so much funding from the federal government to help them reach this target. By the way, we should point out to everybody watching, this is a target not a requirement. There's no penalty for any automaker that does not get to 50% of all new vehicle sales being electric by 2030. That's just the goal.

AKIKO FUJITA: And Rick, you've also got some additional measures here laid out in that plan, including limits on tailpipe emissions. I mean, walk me through how significant of a bump that is. Because we all - there were standards set under the Obama administration. The Trump administration rolled that back. Where do things stand now?

RICK NEWMAN: We don't know exactly. Because Biden has not yet said what he plans to do on that. I mean, just the very briefest history here, Obama, in 2012, raised fuel efficiency standards really aggressively. That would have required about a 5% improvement in fuel economy every year. And then Trump came in, and he slashed that down to about a 1.5% improvement in fuel economy every year.

Now the reporting is that Biden is going to split the difference basically. He's going to raise fuel economy standards above where Trump left them to what would amount to about 3.7% increase in fuel economy every year. But that- they have not announced that yet. And that takes a long time. That is the-- that's changing a federal regulation, which has to go through months and months of review and things like that.

And I think one of the things we're probably going to hear the Biden administration say, well, yeah, his guideline for fuel economy is not as aggressive as Obama's was back in 2012. But if we have all these new electric vehicles on the road, that is something that we didn't have really back in 2012. So that should make it easier to reach the 3.7% annual increase, or whatever it turns out to be. But that is down the road still.

AKIKO FUJITA: OK. Rick Newman, staying on top of the details. Of course, you can read his story on YahooFinance.com as well. Thanks so much for that, Rick.