KEY TAKEAWAYS:

• France and Germany are prioritizing a green transition with their stimulus packages, while climate change mitigation policies have been notably absent at the U.S. federal level.
• Data provided by ISS ESG shows that automotive manufacturers in the U.S., France, and Germany currently have comparable EV product offerings and each country’s automotive sector is positioning itself towards long-term sustainability.
• France and Germany are increasing federal support for national EV use and a broader greening of the automotive sector. The U.S., however, is not and current EV subsidies are not being expanded, though this may change with the incoming Biden administration.
• These dynamics may have credit implications. Auto companies will likely need federal funding to transition to a more sustainable product offering. A lack of funding in the U.S. may decrease the competitiveness of American production and vehicle prices, while France and Germany may be able to boost their economies and increase employment in a post-COVID recovery.