Media Forecast Biden'S Election, The U.S. And European Car Markets Are Mixed

The miracle did not happen.

In Michigan, where Detroit is the core of the U.S. automobile industry, Biden won 16 key electoral votes by an advantage of 2.796 million votes to 2.648 million, avoiding the same mistake as the Democratic Party in the 2016 US presidential election.

By building the so-called "blue walls" in Michigan, Wisconsin and Pennsylvania, Biden finally won 306 electoral votes on November 14, toppling Trump's 232 electoral votes. Several mainstream media predict that Biden will become the 46th president of the United States on January 20, 2021.

Return the favor or double-edged sword?

Biden's victory in the three rust belt battlefields States, dominated by automobile manufacturing, is not only due to Biden's title of "the largest fan of the presidential candidates in history.". Biden's father worked for a long time in his youth as one of the largest Chevy dealers in Delaware, and Biden himself was a loyal fan of the Chevrolet Corvette.

A more crucial factor is that Biden has the official support of the UAW, one of the largest unions in the United States. At the Milwaukee rally during the campaign, UAW publicly expressed gratitude for Biden's rescue of the U.S. automobile industry as vice president during the financial crisis ten years ago, and believed that Biden, if elected successfully, could turn the tide again in the next four years.

Although trump stated in his Gettysburg speech in 2016 that he would bring 1 million manufacturing jobs back to the United States, as of February 2020, the employment of 623700 manufacturing workers in Michigan had declined compared with the peak of 634200 at the end of 2018.

For America's three big traditional car manufacturers, this means that the political pressure from Washington has dropped sharply.

During his term of office, trump has been committed to forcing automobile manufacturers to move their factories back to the United States through administrative means. The White House has not only imposed 10% and 25% tariffs on parts made in China, but also replaced the original North American trade agreement with the US Mexico Canada agreement, increasing the proportion of domestic auto parts sold in the United States from 62.5% to 75%.

Compared with trump, who is keen on fighting trade war, Biden does not advocate trade protectionism, and has not made a statement for the time being, and plans to further escalate Sino US friction. With the possibility of phasing out some tariffs, the trans Pacific Supply Chain of Detroit's three giants will have a chance to reopen.

The welcome attitude of the three traditional U.S. automobile manufacturers to Biden can be seen from the first time the big three congratulated Biden through social media and company spokesmen. After all, Biden's victory was still uncertain before the Federal Election Commission officially announced the election results. The regional powers including Russia, Mexico and other non-U.S. traditional allies have not expressed their views on Biden.

But even if the big three can breathe a sigh of relief over supply chain problems and trade protection, they will also have to face the other side of Biden's "double-edged sword": taxes.

Unlike the trump administration, which advocates tax cuts for businesses to stimulate the economy, Biden has made it clear during the campaign to raise corporate tax rates, raising the top corporate tax rate from 21% to 28%.

In addition, if elected, Biden, with a more moderate policy, is expected to follow Trump's policy of promoting the return of the auto industry to China. On the one hand, Biden never said that he would abrogate the "U.S. - Mexico Canada three country agreement", and the proportion of domestic parts in the agreement will not decline in the short term; On the other hand, Biden plans to raise the global intangible low tax income tax rate from the current 10.5% to 21%, especially for the global intangible low tax income tax gilti, which is the profits of overseas subsidiaries of American companies. Biden plans to increase the tax rate from the current 10.5% to 21%, in a disguised way, to urge multinational automobile enterprises to set up the automobile industry chain in the United States.

The revival of new energy automobile industry in the United States is in sight?

If Biden's possible new deal in the field of traditional fuel vehicles brings about a choice between trade friction and corporate tax burden, then in the field of new energy vehicles, Biden and the Democratic Party behind him may bring only good news.

"Rejoining the Paris climate agreement on the first day after taking office" is Biden's strong counterattack against Trump's "withdrawal" action on social media. But Biden's vision for new energy is not limited to that.

As early as July's campaign rally and the "clean energy revolution and environment plan" released later, Biden announced that he would launch a large-scale climate transformation plan during his term of office, and would follow the example of the European Union and strive to achieve carbon neutrality by 2050. To this end, the federal government will contribute $2 trillion, which, together with private sector and federal state level investment, will total an astonishing $5 trillion.

Specific to the automobile industry, the package includes infrastructure construction, additional car purchase subsidies, government planned procurement and tax incentives and other dimensions of the new energy vehicle stimulus plan.

In terms of infrastructure construction, Biden plans to build 500000 new charging piles in the United States, and accelerate the research and development of power batteries and local production. In order to support start-ups in the field of electric vehicles, the Democratic Party also plans to set up a venture capital fund to ensure the survival of new forces in car manufacturing. Prior to that, in 2012, the advanced automotive technology manufacturing project (ATVM) led by the U.S. Department of energy provided more than one billion US dollars in loans to Tesla and Fisker.

On the policy side, Biden plans to offer cash vouchers to consumers who trade fuel vehicles for electric vehicles. Although the exact details of the cash subsidy have yet to be determined, the federal government expects to spend at least $450 billion over 10 years. Compared with the subsidy policies for new energy vehicles in China and Europe, the United States has long been short of powerful price stimulus tools to support electric vehicles. During the Obama administration in 2009, Washington once used $3 billion to give subsidies of up to $4500 to consumers who buy motor vehicles, but the stimulus did not go down after the $3 billion pool was exhausted. The policy is not even as powerful as Germany's much smaller pool of 5 billion euros in subsidies.

In addition to providing direct subsidies to consumers, Biden also plans to take the lead in putting American made electric vehicles into operation through the federal procurement system, starting with the public transportation sector represented by school buses and government vehicles.

Another important measure is to increase the tax credit for electric vehicles. In the Obama era, the federal government granted tax credits for 200000 electric vehicles to each automobile manufacturer, with a credit of $7000 per electric vehicle. Until March this year, after Tesla and GM ran out of 200000 vehicles, they hoped that Washington would consider extending the preferential tax policy. Instead of calling for a $1.5 billion tax credit in the month, Congress called off the $1.5 billion tax credit in the month instead. Biden, on the other hand, plans to expand the credit from 200000 to 400000 at a time, and to $7500 for each electric vehicle.

In addition to the preferential policies, Biden's support for new energy vehicles is to strengthen the supervision of traditional fuel vehicles once again.

In California, which is the most representative and the most radical in environmental protection regulations, the trump government has previously filed a lawsuit against the California Air Resources Commission (CARC) of the California government at the federal level, accusing the Commission of having no right to implement stringent emission requirements independently of the federal government. In March this year, trump, by administrative means, abolished the fuel efficiency standards planned in the Obama era.

According to the plan, U.S. auto makers need to double their fuel economy to 54.5 miles per gallon in 15 years from 2011 to 2025, which means that they must increase fuel economy by at least 5% a year. Trump lowered the standard to 1.5%, hoping to ensure the continued competitiveness of "muscle cars" such as pickups.

Biden, as vice president of the United States during the Obama administration, is expected to withdraw the federal lawsuit against the California Air Resources Commission and resume the fuel efficiency standard plan formulated during the Obama administration.

In the past four years, Trump's discriminatory policies in Republican iron warehouse, shale gas stronghold Oklahoma and Democratic Party's vote warehouse in California have gradually intensified the domestic division of the United States. The contradiction between energy states and technology States is making it difficult to implement applicable environmental emission standards within the federal scope.

If Biden, who emphasizes the slogan of "build back better", is elected successfully, it may be able to bridge the contradictions among States to a certain extent, pave the way for the unified standards in the United States, and lay the foundation for the further development of new energy vehicles in the United States.

According to the clean energy revolution and environment plan proposed by Biden, the market share of electric vehicles in the United States will reach 25% by 2026, and the annual sales volume will reach 4 million. The development of new energy vehicle industry is expected to create 1 million jobs in the United States.

Unfortunately, up to now, even with Tesla, a star enterprise in the field of electric vehicles, the sales volume of electric vehicles in the United States has been steadily at the bottom of the three major automobile markets in China, the United States and Europe. According to the statistics of McKinsey consulting, in the first half of 2020, the sales volume of new energy vehicles in China will be about 385000, while Europe will successfully surpass China and become the world's largest new energy vehicle market with 414000 vehicles. In the first half of the year, sales of new energy vehicles in the United States were only 111000.

Beneficiaries on the other side?

Biden was welcomed by Europeans on the other side of the ocean, in addition to new energy vehicle manufacturers in the United States.

A U.S. presidential candidate who plays by the book on foreign affairs and trade issues, pays attention to traditional transatlantic friendship, and agrees with the Paris climate agreement is elected, which is what Europeans like to see.

In particular, on the issue of trade friction and tariff, the trump government has not taken into account the transatlantic friendship, but has been threatening to increase the tariff on imported vehicles from the EU from 2.5% to 25%. This threat has always been the sword of Damocles hanging over the heads of European car companies such as Daimler and BMW. After all, not long ago, the United States and Europe just imposed retaliatory tariffs on civil aviation manufacturing.

Compared with the trump administration, in the context of Sino US friction, a consensus is being reached within the Democratic Party's institutionalists by gradually abolishing tariffs on EU products in exchange for Europeans not riding on the fence between China and the United States. In addition, Biden, as an opponent of brexit without agreement, can also exert influence on London through the special relationship between Britain and the United States, which helps European car companies avoid the disordered supply chain problems after the UK's hard brexit.

At the same time, under the background of the relatively backward electrification of the three traditional automobile enterprises in the United States, European automobile enterprises also hope to further occupy the North American market through the electric wave of American automobile industry.

"The Democratic Party's policy is likely to be more in line with our global strategy, which is to address climate change and fully electrify the economy," Volkswagen CEO Herbert dis said in an interview with Bloomberg during the election. In terms of market share, the United States is the weakest region in the world. With the deepening of VW's electric strategy, its market share in the United States is expected to further expand. " Since the second half of this year, the ID family of Volkswagen Group has successively launched two important pure electric vehicles, id.3 and id.4. After the exhaust valve, Volkswagen Group has been hoping to re open the North American market through the ID family, which has set up an id.4 production plant in Tennessee.

Similar to the electric vehicle manufacturers in the U.S., Ningde electric vehicle manufacturers also have business opportunities in the era of electric vehicles in the United States. As a senior foreign policy adviser to Biden, Tony brinkin once said during the election campaign that it is unrealistic to completely decouple China and the United States, and that economic and technological relations with China need to be reset.

However, Chinese enterprises that are expected to resume the prosperity of export trade to the United States at the component level still need to face many challenges.

On the one hand, he Jinli will play the key role of deputy attorney general Biden. In addition to helping the Democratic Party play the identity card with politically correct female minority representatives, she will also be the best candidate for the Democratic Party to implement the American style intellectual property system worldwide. This issue has encountered resistance in the first stage of Sino US economic and trade agreement negotiations, and may become a hidden danger in the future in terms of automatic driving and Internet of vehicles technology exchanges between China and the United States.

On the other hand, if Biden is elected successfully, it is also questionable to what extent Biden can reverse Trump's policies in the next four years. Not only has trump successfully appointed three federal judges in office, but Republicans are expected to continue to control the Senate. Biden, who has never said that he will give up the US Mexico Canada agreement, is more likely to be just a polite "trump".

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