The Practical Path of the Transformation of Electric Vehicles in the U.S.
Last week, with the support of American auto industry leaders and the American Auto Workers Federation, President Biden announced that by 2030, half of the new cars in the United States will be the goal of electric vehicles. This is an ambitious goal, but it is necessary if our people living in the suburbs are to achieve our greenhouse gas reduction targets. The U.S. land use development model is based on personal transportation. Without electric vehicles powered by renewable energy, we would not be able to fulfill our emission reduction responsibilities. This will require the federal government to provide subsidies for electric vehicles (EVs), at least until their prices are lower than internal combustion engine vehicles. Taking into account operation and maintenance factors, the actual price of electric vehicles is already lower than that of traditional vehicles. Unfortunately, the only price that matters to consumers is the price on the showroom label, so subsidies are needed to start this market. After the latest report released by the United Nations Intergovernmental Panel on Climate Change today, the growing climate crisis has once again strengthened our goal of decarbonizing our economy. However, the reduction of greenhouse gas emissions in the United States requires a viable electrification path.
In addition to subsidizing vehicles, public charging stations will also have funds, although I suspect that the increase in battery capacity and the self-interest of the convenience store industry will cause many gasoline pumps to be converted into charging stations. With the development of charging technology, the charging speed will be faster and faster, but while the car is charging, there is also enough time to go to the store to buy Slurpee. In other words, the demand for charging stations will trigger a response from the private sector. In addition, although apartment residents like me need public charging stations, most electric car owners will live in suburban homes with garages or at least driveways and charge their cars at home at night. They will become their own charging stations. When the battery life reaches 500 miles, the demand for public charging stations will decrease. Shopping mall parking lots and garages will also be equipped with charging stations to make money for customers when they “shopping and charging.” In any case, in order to reassure electric vehicle owners, we need to mix public and private charging stations.
Biden’s statement combines his climate goals with economic goals that lead the world in transitioning to electronic goals.As Coral Davenport reported New York Times last week:
“If the types of vehicles Americans drive are not completely changed, Mr. Biden will not be able to deliver on his ambitious promise to reduce global warming emissions by 50% from 2005 levels by the end of this decade. Gasoline-powered Cars and trucks are the largest single source of greenhouse gases in the United States, accounting for 28% of the country’s total carbon emissions. He also signed an executive order requiring the government to work hard to ensure that half of all cars sold in the United States by 2030 are electric of.”
There are many obstacles to achieving these goals, and rapid technological transformation of this scale is rare, although not unprecedented. The transition from fixed telephones to mobile phones, from video CDs to streaming video, has occurred quite quickly. But these products are relatively simple compared to motor vehicles. In addition, subsidy requirements and the impact on auto workers have created additional uncertainty.As Davenport Observed:
“The rapid transition to electric cars and trucks faces several challenges. Experts say that if charging stations are not made ubiquitous like corner gas stations, electric cars will not be able to move from a niche to the mainstream. Although labor leaders participated in the White House event and Calling Mr. Biden a “brother,” they are still worried about the large-scale shift to electric vehicles, which requires fewer workers to assemble.”
The transition to electric vehicles, the modernization of the power grid, and the transition to renewable energy are all major structural changes in developed economies like ours based on fossil fuels. Ideological rhetoric and misleading political attacks on the energy industry will not accomplish the arduous task of achieving this dramatic change. What is needed is a practical path and a public-private partnership related to an important and common national mission.
We use public policies to set and achieve national goals. The best examples are World War II and missions to the moon. A lesser-known example is home ownership. After World War II, we set a national goal to promote home ownership. We make mortgage interest and local property taxes deductible on federal tax returns. We developed federally subsidized and managed mortgage insurance. We built the interstate highway system. All these public investments encourage builders to develop land in the suburbs, people move in, and with the sweat of the weekend, small houses tend to become bigger and backyard barbecues become common. A few decades later, the United States changed from a country of renters to a country of homeowners. Moving away from fossil fuels quickly requires a similar level of creativity, incentives, and private profits.
The exciting thing about the Biden team’s climate policy approach is that they fully understand the complexity of the task, and they know that they must bring all key stakeholders to the negotiating table. Trade unions, management, national and local elected officials, and community activists must all play a role in the “company” and obtain ownership. Electric vehicles will take a generation to replace fossil fuels. My next car will be electric, but my current car only has 20,000 miles. When I trade in an old one, someone will buy it and use it. Someone may be the government, and then they need to send it to a fossil fuel cemetery. If the government does not buy and scrap my car, it will emit greenhouse gases for at least ten years after I sell it.
Decarbonizing our economy requires us to sweat the details. We need to understand the supply chain of our consumer economy and the waste stream of items we no longer use. We need to ensure that the entire production process is carbon neutral. The environmental protection community is correct to assert that the economic benefits of the fossil fuel industry may be hostile to mitigating climate change. But instead of discrediting the entire industry, we should pick industry leaders who can read the writing on the wall and know that their survival requires them to get rid of fossil fuels.
The automobile industry is a good model here. They see that the regulatory environment and consumer preferences are shifting to electric vehicles. Government assistance is needed to quickly establish this new market and carry out the necessary research and development to ensure that battery technology continues to develop rapidly. But even without the government, electric cars are on the way. They are technically superior alternatives to internal combustion engines. But the actual path of electric vehicles requires extra attention to auto workers. Although the new car factory will be more robotized than the existing factory, this shift will result in a short-term increase in blue-collar jobs. In the long run, work on the auto assembly line will require a more educated labor force, so the U.S. Auto Workers Union and automakers should immediately start training existing labor for future jobs. Crucially, the transition to electric vehicles will not make American workers the killers of the new auto industry. The short-term outbreak of transformation work provides us with a better opportunity to do better than the deindustrialization of the upper reaches of the Midwest. The government must monitor employment issues and provide subsidies to promote the training of existing labor.
The Biden team is linking the transformation of electric vehicles to goals such as climate, battery research, job creation, competition with China, and economic growth. I believe their strategy is reasonable. But it is necessary to clearly understand the difficulties from concept to reality. This is not easy. At some point, the momentum behind electric vehicles will be irresistible. By then, subsidies will need to be reduced, and over time, private market forces will help complete the transition.
