Washington knows best which car to drive: EVs. Seriously?

Washington knows best which car to drive: EVs.  Seriously?

“When politicians say, ‘Let’s get rid of all cars that use gasoline,’ do they understand?” Toyota President Akio Toyoda early in 2020, citing the sweeping consequences of politicians forcing a transition from conventional vehicles.

It’s a good question, and a proposal in the so-called Inflation Reduction Act pushed through Congress suggests the answer is “no.”

President Joe Biden has used several policy tools to force a transition from the ubiquitous combustion engine to electric vehicles. Among them are executive orders, military procurement mandates, and regulations to make it nearly impossible to manufacture and sell a conventional car or truck.

The Senate is ready to join. Heaped on top tens of billions dollars in grants, taxpayer-backed loans, and investment tax credits for EV manufacturers, the misnamed Inflation Reduction Act negotiated by Senate Leader Chuck Schumer, DN.Y., and Sen. Joe Manchin, DW.Va., an extension of EV tax subsidies.

The account offers up to $7,500 in tax credits on new EV purchases, including bonuses for EVs made by union workers and batteries manufactured or assembled in North America. The legislation also expands the existing EV tax credit by removing limits on sales, adding a new $4,000 tax credit for used EVs, and extending the credits for the next decade.

While there are some improvements — unlike existing credit, the credit isn’t available to Americans who make more than $300,000 combined or to EVs containing batteries made with critical minerals from “foreign entities of concern” — they’re taking it. not real problem.

The problem isn’t the size of the credit or even EVs themselves. The real problem is that politicians are trying to force a transition to energy sources of their choice, without inhibition over the tradeoffs, limitations and collateral damage these policies cause at the expense of Americans.

Trade-offs, restrictions and collateral damage

There is no perfect vehicle or energy. It’s all about compromises that prioritize individuals, families, and businesses in different ways. But those trade-offs are exactly what proponents of enforcing EV use pretend they don’t exist.

Let’s count some ways.

1. The gap between reality and political ambitions is wide. A full 90% of US transportation energy needs are covered by petroleum. EVs make about 1% of registered vehicles in the US The International Energy Agency estimates that the ambitions of politicians for the deployment of electric vehicles under the climate commitments of the Paris Agreement are a 30-fold increasing demand for minerals used in EV batteries by 2040. That may be why the head of EV company Rivian warned that lingering supply chain problems with “semiconductors are a small appetizer of what we’re going to feel about battery cells in the next two decades.”

2. EVs trade fuel dependence for mineral dependence. While conventional cars and trucks depend on global markets for crude oil and refining capacity (both of which major global supplier of), EVs must rely on global mineral mining and refining markets, which account for more than half the cost of an EV battery.

Minerals such as lithium, cobalt, nickel, graphite and copper are needed to make batteries and other components in EVs. According to the International Energy Agency, EVs six times more minerals than a conventional car. The agency estimates it is necessary over 16 years on average to get a mine airborne from the moment of discovery. Still, the Biden administration has gone out of its way to block new mining capacity in the United States, particularly in Minnesota and Alaska.

American miners are a small player in the global markets for the minerals needed for EVs: Chile is the world’s largest copper mining country; Indonesia for nickel; Australia for lithium, and – much trickier when it comes to human rights violations and environmental stewardship – China for rare earth minerals and the Democratic Republic of Congo for cobalt.

The refining capacity for these minerals is: deeply concentrated in China.

In other words, “concerns about price volatility and security of supply do not disappear in an electrified, renewable energy system.”

3. Major government policies also hinder EVs. Perhaps giving bonus tax subsidies to EVs made with unionized labor sounds in concept like a fancy way to support American companies and workers, as the Schumer-Manchin Act proposes. In reality, it would drive up the cost of electric vehicles and punish most workers who would rather not join a union. It could even backfire and lead to fewer electric vehicles being produced and sold in the US 14% of car workers are united in the U.S. Meanwhile, foreign-owned automakers are now employ more American workers than domestic car manufacturers.

4. EVs are often the lifestyle choice of the rich. of the estimated $7.5 billion in existing EV credits to claim between 2018 and 2022, companies will take about half. Of the other half claimed by individual Americans, 78% goes to people who earn more than $100,000 a year. One state leads the pack: California is home to 39% of registered electric vehicles— perhaps unsurprisingly, given that the state will ban the sale of gasoline-powered vehicles from 2035 as part of its radical climate agenda.

5. There is no guarantee that electric vehicles will reduce greenhouse gas emissions. Regardless of how one looks at the global warming problem, electric vehicles are not a foolproof solution. EVs have to be plugged in somewhere and 60% of the electricity consumed in the US is generated from natural gas and coal. Ironically, federal regulators and some states are trying to stop the production and use of natural gas as an energy source, just as they have been trying to do with coal for years. No wonder network operators have it heightened concern about reliability.

6. EVs come with trade-offs for owners. EVs bring interesting possibilities, but they also have drawbacks. Currently there are many EVs costs more than their conventional counterparts. To fuel takes time. EV batteries lose an average of 2% of their capacity every year (depending on exposure to extreme temperatures, how often an owner charges the battery, and other habits that degrade the batteries), and replacement is expensive. Some parking garages even ban drivers to park in it due to the risk of batteries catching fire. And the range of EVs is shrinking and heating is becoming a costly choice in cold weatherwhich is probably the reason very little EVs are registered in cold weather states that don’t heavily subsidize them or penalize gasoline cars.

It is one thing for an individual, family or company to weigh up and make the decision to purchase an electric car. It is a very different matter for politicians or bureaucrats to force the decision on Americans.

Competition made America a great country to innovate, run a business, and buy products that meet the diverse needs of Americans. EVs are one of the many options out there that compete for the business of Americans and should compete on their merits.

Unless Congress comes to its senses, US taxpayers will cover the cost of the government’s big EV policies, whether they buy an EV or not.

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