Sooner or later and if enacted, the administration’s plans (for some discussion of them, please see this article by Diana Furchtgott-Roth) to “encourage” the introduction of electric vehicles (EVs) are going to have a very difficult encounter with reality. The result will be bad for drivers and for automakers, and the political consequences will, I suspect, be . . . interesting.
The auto industry’s largest lobbying organization has come out against the Biden administration’s most ambitious climate change regulation, a proposed rule designed to ensure that two-thirds of new passenger cars sold in the United States are all-electric by 2032.
If implemented, the rule would be one of the strongest actions taken by any country to fight climate change. It would eliminate about seven billion tons of carbon dioxide from the atmosphere — the equivalent of taking all American vehicles off the road for four years — by compelling the auto industry to move away from the internal combustion engine that has powered cars for a century and commit to an electric future.
On Wednesday the Alliance for Automotive Innovation, which represents 42 car companies that produce about 97 percent of the new vehicles sold in the United States, wrote in public comments filed to the Environmental Protection Agency that the proposed rules are “neither reasonable nor achievable in the time frame covered in this proposal.”
The Alliance wrote that the organization, whose members include General Motors, Ford, Stellantis, Volkswagen and Toyota, “does not believe they can be met without substantially increasing the cost of vehicles, reducing consumer choice, and disadvantaging major portions of the United States population and territory.”
Note (in particular — all three are worth considering carefully) the first of the three points made by the Alliance. The proposed timetable cannot be achieved without a substantial increase in the price of cars (something that car manufacturers have warned about in the past), another reminder that this “transition” will hit hardest those who are least able to afford it. I wrote a bit about the class divide buried (not very far) beneath decarbonization and current climate policy in a recent Capital Letter.
Writing for Spiked, Joel Kotkin takes up a similar theme:
The transition to electric cars will be no boon to the middle and working classes. The average price for a brand-new EV is over $60,000 – about $12,000 more than the average four-door sedan. Even with tax credits, it is hard to see how consumers come out ahead, at least for now. Certainly, working- and middle-class Americans won’t be snatching up the newly planned $300,000 Cadillac EV. Even the popular Model Y Tesla SUV is out of reach for many, as its price has fluctuated between $54,000 and $70,000 over the past year. Perhaps more importantly, the electric version of the Ford F-150 pickup truck costs an additional $26,000 compared with the popular gasoline-powered variety.
In simple terms, the push for EVs represents an assault on the working class. Two-thirds of all EV owners have incomes in excess of $100,000. According to United Latinos Vote, a California-based advocacy group, green attempts to ‘phase out’ affordable cars in favour of ‘expensive EVs’ might make it possible for ‘our rich neighbours in the next town to charge their Teslas’, but they would ‘make it unaffordable to use our [cars]’.
EV mandates are also likely to force up the price of now restricted traditional cars. In the meantime, greens will demand higher fuel prices to reduce drivers’ consumption of the demon petrol. Ultimately, as even the Washington Post recently admitted, electric vehicles are hastening a return to conditions not seen since the early 20th century, when the automobile was a luxury item. ‘New cars, once part of the American Dream, [are] now out of reach for many’, it notes. Not everyone will object to this, of course. Making cars more expensive will also advance the long-standing green goal of radically reducing car use.
More important still, the rapid shift to EVs may well accelerate the deindustrialisation of America and other Western countries. Although communities may welcome the arrival of new electric-assembly facilities, and underperforming firms like General Motors can hope to use federal EV mandates to boost their market share, many traditional component suppliers are likely to get forced out of business. Overall, electric-car production uses 30 per cent less domestic labour in the US compared with traditional car-making. Ford recently announced massive layoffs, despite landing a $9 billion loan from the Biden administration to bolster its EV production. The firm is currently losing $60,000 per EV, which is not exactly sustainable without massive state subsidies. Meanwhile, Germany could lose upwards of 400,000 auto jobs by 2030 thanks to the green transition.
On the question of the class impact of this change, it’s worth throwing in the question of charging, something I discussed here, and which will be even more of a problem in Europe’s densely populated conurbations than in the U.S. If an EV owner lives in a house with a garage, it is easy enough for him or her to set up a charger at home. That way the EV can be charged overnight (assuming the grid holds up!). An EV will then be fine for driving to work, the school run, driving around the neighborhood, and so on. Don’t ask about long drives, or what happens if it gets too cold.
The same is more or less true for people with their own driveways. The real difficulty will be for those who have to rely on curbside parking, or (probably less so) who live in buildings with underground parking. (I am assuming that the worries about EV fire risk — EVs are, as a rule, less likely to catch fire than conventional autos, but when they do, the fire is harder to put out — in such buildings is exaggerated, notwithstanding some issues with the Chevy Volt.)
I’ll admit to having been surprised that the Alliance for Automotive Innovation has spoken out. Thanks to the subsidy regimes and the coming effort to squeeze out “traditional” cars, the auto sector is now deeply intertwined with government. For it to push back against the proposed regulations, its members must be seriously worried.
At the same time (and perhaps tellingly), its requests are relatively modest.