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.  

Infrastructure Bill: Don't Fall For The Media Hype

President Biden and his media chorus are singing the praises of the Infrastructure Bill, calling it a "monumental step forward for the nation."  Although publicly flogged as a massive investment in roads and bridges, the $1.2 trillion package designates 9.1% of the funding to surface infrastructure projects.

Speaker Nancy Pelosi's cheoragodhy for the bill in the House floundered over months of often bitter Democrat in-fighting until a gaggle of Republicans pirouetted and joined deadlocked Democrats, who were unable to muster enough support from their splintered party to waltz to final approval.   

Thirteen of 214 House Republicans gave the legislation a thumbs up. In the Senate, 19 GOP members, including leader Mitch McConnell, raised their hands in support of the massive spending bill, while 31 colleagues demurred.  GOP renegades will be rewarded with pet projects for their states.  

The 2,702 page bill, weighing a hefty 28 pounds of paper, parcels out $110 billion for roads and bridges.  But don't be fooled.  Included in those billions of dollars are millions in funds for transportation research at universities and construction of highways in Puerto Rico. 

For perspective, Texas spent $15.3 billion in 2020 on just highways.  In the next 20 years, the state's Department of Transportation estimates it will require another $239.2 billion to keep up with growth and development. That $110 billion, divided among 50 states, is political window dressing.    

That $1.2 trillion number also is misleading.  Even Democrats concede the bill contains about $550 billion in new spending.  The remainder, nearly $700 billion, funds  existing infrastructure laws that are bundled into the legislation, such as reauthorization of the Highway and Mass Transit bill.

Here is a summary of new spending, focusing on the big ticket items:

• $66 billion for railroads.  The spending covers upgrades and maintenances of the Amtrak passenger rail system and funds for freight rail safety.  However, there is no money for high-speed rail.
• $65 billion for the power grid. The legislation provides for updating power lines and cables as well as money for cyber security to prevent hacking of the grid.  Clean energy funding is also included in the bill.
• $65 billion for broadband. The bill funds expansion of broadband service in rural areas and low-income communities.  About $14 billion would provide subsidies to low-income households to cover the cost of internet service.
• $55 billion for water projects. A large chunk of the funding, $15 billion, will be used for lead pipe replacement.  Native American tribal communities will get billions to provide clean drinking water in their communities.  
• $47 billion for climate change and cyber security. Included in this spending is money to address flooding, wild fires, coastal erosion, droughts and other extreme weather events.
• $39 billion for public transit. The bill allocates money to provide for upgrades to public transit systems nationwide.  In addition, there are funds to help make public transit more accessible for seniors and disabled Americans.
• $25 billion for airports.  The funding for air traffic control towers and systems is just $5 billion, far short of what experts estimate is required to update critical facilities.  The remainder of the funds are for upgrades and expansion to airports.
• $21 billion for the environment. These funds are designated to clean up superfund and so-called brownfield sites, abandoned mines and old oil and gas wells.
• $17 billion for ports. At a time when the administration is grappling with the supply chain disruption at U.S. ports, the funding is a drop in the bucket.  About one-half of the funds would be sent to the Army Corps of Engineers for port infrastructure.  Additional monies would go to the Coast Guard, ferry terminals and the reduction of truck emissions at ports.
• $7.6 billion for electric vehicle charging stations and $7.5 billion for electric school buses. Those charging stations will mostly benefit upper income earners who can afford pricey electric cars. The school bus project targets bus fleet replacement in low-income, rural and tribal communities.

Buried in Section 13002 is a proposal for a pilot initiative for a national motor vehicle per-mile user fee.The stated purpose is to test the feasibility of monitoring how much each car travels, a harbinger of Democrats plan to levy a tax on every mile a person drives.  That should worry Americans. 

While Democrats are taking victory laps, the funding doesn't address America's pressing problems: the rising cost of gasoline at the pump; spiraling food prices; chaos at the southern border; and empty shelves at virtually every store that sells groceries, home goods, electronics, clothes and more.

Wall Street may be popping champagne corks, but average Americans on Main Street are wondering how this helps their economic situation, when inflationary prices are eroding the purchasing power of every dollar.  Democrats claim this spending will actually reduce inflation. Insert laughter here.

Despite the bill's tepid public reception, Democrats are agog.  The Department of Transportation and other agencies will be responsible for divvying up a chunk of the billions assigned to the bill's priorities. Of course, this is by design so the administration can base spending decisions on politics.  

With Democrats controlling all the levers of government, the Blue States will be rewarded along with the districts of party members who are facing reelection in next year's mid-terms.  That 's just the way Washington works, regardless of the party in power. Incomprehensibly, voters don't seem to care.   

On the heels of infrastructure, Congress is wrangling over the Build Back Better Act, which contemplates almost $2 trillion in spending. The legislation has allegedly been pared from the $3.5 trillion price tag announced earlier.  A trillion here. A trillion later.  Soon it becomes real money.

While the Build Back Better Act lurches toward approval, the administration's runaway spending continues. Millions of dollars in more stimulus checks will be dispatched this month.  Eligible families will be sent checks of $300 for every child under six and up to $250 for each kid aged six-to-17.  

This gusher of spending worries few Americans because too many believe the government has an inexhaustible supply of money. Just tax those 614 American billionaires and we can relax comfortably waiting for our next government check. No one seemingly worries about deficits or the national debt.  

At some point the government will run out of people to tax to fund this excess.  It will be a rude awakening for a nation addicted to checks from their government's printing presses.  Unless spending is reigned in, an inflationary shock wave will rattle the country, hurting the most vulnerable Americans.