Electric vehicles (EVs) today cost an average of $55,000, versus regular cars at $35,000. With other negatives to overcome, EVs often require government to bribe, command, or control car makers, sellers, and buyers to be “competitive.”
President Biden’s goal for the U.S. to be 50-percent electric by 2030 proposes in Build Back Better to extend and enlarge the EV tax credit from $7,500 to $12,500 per vehicle. In addition, automakers are all but forced to sell EVs in order to get credit toward the new, stringent average-fuel-economy standards for internal-combustion-engine (ICE) vehicles.
EVs are not an infant industry, the disadvantages of this technology are many, and the environmental advantages of battery transportation are in debate. The “social justice” implications of EVs disrupting the transportation market are negative too.
Background
John Kerry once commented how Thomas Edison would have applauded government-driven electrification since “an energy revolution that he dreamt about is actually underway.” But America’s greatest inventor knew the limits of battery power for transportation, as evidenced by a historic conversation he had in 1896 with an aspiring horseless carriage builder.
“He asked me no end of details,” remembered Henry Ford, “and I sketched everything for him; for I have always found that I could convey an idea quicker by sketching than by just describing it.” Edison’s answer included a fist to the table:
Young man, that’s the thing; you have it. Keep at it. Electric cars must keep near to power stations. The storage battery is too heavy. Steam cars won’t do, either, for they require a boiler and fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.
“That bang on the table was worth worlds to me,” Ford later recalled.
The man who knew most about electricity in the world had said that for the purpose my gas motor was better than any electric motor could be—it could go long distances, he said, and there would be stations to supply the cars with hydro-carbon…. And this at a time when all the electrical engineers took it as an established fact that there could be nothing new and worthwhile that did not run by electricity. It was to be the universal power.
The superiority of the ICE, in fact, disrupted the predominant EV market. “In the late 1890s, at the dawn of the automobile era, steam, gasoline, and electric cars all competed to become the dominant automotive technology,” historian David Hirsch wrote in The Electric Vehicle and the Burden of History (2000). “By the early 1900s, the battle was over, and internal combustion was poised to become the prime mover of the twentieth century.” He concluded: “No electric car since 1902, regardless of battery or drive train, had been able to compete effectively against its contemporary internal combustion counterpart.”
Subsidies Galore
Today, the same verdict would reign—except for high bribes and heavy mandates. Here are some highlights of the government effort:
- Pursuant to federal legislation in 2008/2009, EV purchasers have received up to $7,500 in tax credit. The same provided a 50 percent federal tax credit for home recharging stations.
- State tax credits in Colorado ($4,000) California ($2,000), New York ($2,000), Florida ($1,000), and elsewhere add to the federal credit, as do any local utility rebates ($1,500 in California).
- In 2009, the Obama Administration awarded $2 billion of stimulus money to the major car makers for advanced battery research, mainly lithium-ion. General Motors’ Volt was the major recipient, with Ford Motor, Chrysler, and Nissan also in the gravy train. The goal was one million electrics by 2015 (the actual was 70 percent less).
- EV credits to average down mileage to meet the Corporate Average Fuel Economy (CAFE) standards, the most recent to meet the recent stringent EPA rule of 55 mpg by 2026 versus 38 miles today.
- Waivers by states on retail taxes applied to petroleum (gas taxes) for EVs.
All of this is intended to reverse the aforementioned sticker shock: $55,000 for an EV versus $35,000 for an ICE vehicle.
EV Concerns
A number of other concerns cloud the market for EVs.
- The paucity of electric refueling stations, creating range anxiety
- Longer wait time for recharging
- The risk of electricity shortages or downed power lines
- Cold-weather performance
- Hot-weather driving range
- Battery replacement and recycling
- China-based sourcing for mining and chips
- Labor transition issues
- Safety issues
- Recall risk
- Road deterioration from large-battery trucks
- High battery-grade lithium prices
All this translates into low customer interest, particularly in the SUV/Pick-Up category.
On environmental grounds, EVs have been called “emission elsewhere” vehicles (EEVs) because most electricity in the U.S. is generated from natural gas or coal. EV manufacture produces more CO2 than a comparative ICE vehicle, creating a carbon debt. Rare earth mining for batteries is also environmentally contentious.
On social justice grounds, EVs are a luxury for the relatively wealthy, most residing in California. (None other than Elon Musk/Tesla is the major beneficiary from the subsidy parade.) And the siting of solar “farms” to supply EVs has come under fire in low-income communities.
Conclusion
When government tries to pick losers and winners, it typically picks losers. Why? Because in a free market, consumers pick winners to leave the losers for government. Understood in more technical terms, the energy density of petroleum is much greater than that of batteries, resulting in less weight, greater driving range, and less cost compared to EVs.
The transportation grid should not be duplicated—and taxpayers not conscripted—for an inferior technology. Let consumers decide in a regulatory-neutral, taxpayer-neutral environment.
