Washington's Failures to Supercharge EV Industry

With exuberant fanfare, the Biden Administration unveiled a plan in 2021 to spend $7.5 billion to build thousands of electric vehicle charging stations. The funding was shoehorned into the engorged $1.3 trillion Infrastructure Bill.  Three years later, guess how many stations have been constructed?

If you said "thousands" you are in the camp of most Americans.  The exact number according to the Federal Highway Administration is seven as of March 29.  The progress--or lack of it--is an indictment of government intervention into free market capitalism.

By comparison, Tesla, the U.S. EV market leader, has constructed a labyrinth of 4,436 charging stations with 27,527 total ports.  Elon Musk's company has stations in all 50 states. The public firm has managed to build out an extensive network while still making a profit for share owners. 

Companies selling electric vehicles are now partnering with Tesla to adopt a charging station standard that will support their autos. Tesla has opened its super fast charging network to Ford and GM.  Other auto companies will make their future EV's compatible with Tesla's chargers.

A group of seven auto firms recently revealed plans to open 30,000 of their own charging stations across the country under the Ionna brand name.  It is a clear signal that EV makers recognize the lack of a charging infrastructure as a major impediment to consumers purchase of electric vehicles.

Washington bureaucrats carrying suitcases full of money are no match for private industry. The charging revolution is surging without taxpayers picking up the tab.  Big government cannot not compete with the innovation and speed of businesses incentivized by profits. 

When gasoline cars replaced horses and buggies, the government did not spend a dime to build gas stations across the country.  Oil companies invested in gas stations because it was in their economic interest.  Now there are 145,000 gas stations in the U.S--not one built by Washington. 

What if the charging industry followed the evolutionary map of gas stations? Electric utility companies, like the oil producers, stand to benefit from millions of vehicles hooked up to chargers. Unleashing utilities to build retail charging networks would accelerate the deployment of a national infrastructure. 

Naturally, there would be resistance from the New Green Deal crowd, who would carp about increasing electricity output, likely through fossil fuels.  Do they not realize government chargers will be hooked up to the electric grid?  The grid will collapse without added capacity for chargers, regardless of which entity constructs the station.

The federal government also has shelled out millions of dollars in subsidies to charge up sales of electric vehicles while using regulations to quash companies building gasoline powered cars. Taxpayers, most of whom own gas vehicles, are underwriting these generous handouts to wealthy EV buyers.

A study by Harvard's Law School's Labor and Worklife Program found the so-called subsidies end up going to more affluent Americans.  The government gives up to $7,500 as an incentive for the purchase of an electric vehicle.  The study by Ashley Nunes, Ph.D., concluded the following:

"By subsidizing richer households and not secondhand (EV) buyers, we are rewarding those who aren't always helping to reach emissions targets while ignoring those who actually do.  It's a situation that is both unfair and detrimental to our climate goals."

Nunes points out that many EVs are purchased by wealthier households as secondary cars, which are typically driven fewer miles than a primary gas vehicle.  His research showed that "electric vehicles must, when used as second cars, remain in service longer to deliver an environmental benefit."

Even with government largess, the Biden Administration's plan aimed at achieving 50% of new vehicle sales to be electric by the end of the decade remains an auto galaxy too far. 

U.S. electric vehicle sales hit a record 1,189,051 last year. Electric vehicles accounted for 7.5% of the light vehicle market (excluding trucks).  However, the rate of sales growth has dipped slightly over the last six months, although it remains on a steady incline. 

Tesla has garnered the largest share of the electric vehicle market in the U.S.  Although its share dipped last year, Tesla sold 654,888 cars in 2023.  Worldwide Teslas sales soared to 1,808,581.  Tesla now has a bigger share of the U.S. car market (4.2%) than Volkswagen, Subaru, BMW or Mercedes. 

There will be an eventual rationalization of the EV market. The winners will be determined in the free market place, not dictated by Washington. Government sales goals are a poor substitute for American consumers, who are capable of choosing their next automobile purchase.

Electric car makers, especially Tesla, are gradually shrinking the cost disparity between electric and gas vehicles to even the playing field. Kelley Blue Book estimates the price paid for the average electric vehicle was $53,469 last year. By comparison, the average gasoline powered car sold for $48,334. 

With parity within grasp, there is no justification for the federal government to continue to ask taxpayers to underwrite someone who buys an electric vehicle.  Likewise, the government should scrap its exorbitantly costly plan for building chargers.

It's past time for Washington to butt out of the electric vehicle business. Less big government heavy-handed intervention and regulation will provide more impetus for the growth of the EV industry.  

Biden's Plan To Takeover Auto Industry

In one breathtaking regulatory fiat, the Biden Administration revealed its plan to seize control of the nation's automobile industry. General Motors and Ford will no longer be free to sell cars and trucks consumers want.  The government will compel the auto firms to manufacture and sell electric vehicles. 

The industry takeover is disguised as new Environmental Protection Agency (EPA) emission standards for automobiles and trucks.  The proposal authored by unelected bureaucrats would effectively force automakers to increase their sales of electric vehicles, while eliminating gasoline powered models.

Under the EPA directive, the agency anticipates that the emission standards will result in two-thirds of the vehicles sold in the U.S. to be electric by the 2032 model year.  The federal bureaucrats forecast the stringent standards will mean 46% of medium duty trucks would be electric.

The EPA directive, styled after California's punitive edict, stops shorts of outlawing gas-powered vehicle sales.  California's policy bans gasoline trucks and cars sales in the state by 2035.  The Draconian measure will lead to higher prices for electric vehicles and fewer consumer choices.  

Agency administrator Michael Regan bragged his proposal exceeds the administration's own 50%EV  target by 2030.  Environmentalists cheered the ambitious target but others warned the goal is unrealistically achievable.  Electric cars represented less than 6% of the total new vehicle sales in 2022. 

In nine years, the $1.53 trillion automotive industry will have to retool manufacturing and supply chains while building an ecosystem that doesn't exist at scale today.  But Washington's desk jockeys likely have never set foot in an automobile manufacturing plant.  They don't see any flaw in their scheme.

Office bureaucrats are impatient with the free market auto industry. Although the transition to electric vehicles is moving relatively fast, they believe auto makers are making too many gas models to satisfy customers.  Consumers are just too dumb to embrace electric, the bureaucrats surmise.

The feds are growing restless after offering generous tax credits for years to seduce customers into scrapping their gas vehicles for electric cars.  Taxpayers are footing the bill for this benevolence, which currently includes subsidies ranging from $2,500 to $7,500 depending on the electric model. 

The average cost of an EV in 2022 was $61,448 compared to $49,507 for a gasoline powered vehicle, according to GreenCars, an EV industry source.  The cost disparity would have been even more if Tesla had not lowered some prices by up to 24% last year.  Price remains a barrier to wide adoption

Administration officials claim there are 3 million EV's on the roads today, but data indicates the number is closer to 2 million.  In addition, there are currently 6.8 million hybrid (gas and electric) vehicles. EV's are a tiny number of the nation's 284 million vehicles. The average age of a vehicle is 12 years.

If the EPA successfully reaches its electrification sales goals, it will create a challenge for the nation's already stressed power grid. Experts believe a complete transition to electric vehicle will require as much as 1.25 trillion kilowatt-hours of electricity each year. It means increasing grid capacity by 30%.

Not to worry claim the green car crowd.  The government will issue rules on what day and at what time you can charge your shiny EV. This will ease the strain on the grid while ending the pretense of freedom of choice for consumers.  This should concern even New Green Deal activists.

The Biden electric revolution is a gift to China. The Communist nation has cornered the market on most of the rare minerals required to make electric car batteries.  The key minerals include copper, graphite, nickel, cobalt, manganese and lithium.  China has built a global dynasty of battery metals.

The World Bank estimates supplies of these key metals would need to increase by 500% by 2050 to meet the global electric vehicle forecasts.  That works out to 3 billion tons of these rare metals.  Mining those metals creates an environmental nightmare that Biden's troops never talk about.  

China already accounts for nearly 75% of global EV battery production.  Tesla will manufacture 40% to 50% of its cars in China this year, according industry sources. Ford announced earlier this year that it would collaborate with a Chinese supplier on building a $4.5 billion electric battery plan in Michigan.

It is beyond ironic that China, the world's top emitter of greenhouse gases, will reap the most benefit from the administration's top-down management of the electric vehicle industry.  Let that sink in.  

As if those obstacles are not steep enough, consider millions of electric vehicles traveling America with a sparse network of charging stations to provide juice for the batteries. Tesla years ago began building its own charging network with its own money.  How quaint--a private sector initiative.

Now the federal government has appropriated $7.5 billion of your tax dollars to build out a national network of EV chargers.  Democrats are already clamoring for $85 billion more. It will take more than several decades to match the ubiquity of gasoline stations on highways and roads in America.

The media echo chamber, led by The New York Times and The Washington Post, are in full throated support mode.  The media giants are publishing articles assuring skeptics that solutions will be found to solve the electric grid, rare mineral scarcity, charging stations and dependence on China.

Never bet against American ingenuity to create technological solutions to solve conundrums. But it will require years of research and development.  There are no magic bullets or shortcuts. Mandating electric cars before these issues can be solved is a recipe for an epic boondoggle.  

But if you say it out loud the New Green Deal activists will accuse you of denying climate science and wanting to end life as we know it on planet Earth.  Government has never been better than private industry at producing anything.  Which is why the Biden prescription needs a dose of reality.