Porsche is the last bastion of petrolheads. So when they start making electric vehicles, you know the world has changed. ~ Chris Harris
The world has
changed.[1]
President Joe Biden has mandated that at least one-half of all new passenger
vehicles sold in America after 2030 will be electric vehicles (EVs). Governor
Gavin Newsom has ordered that only zero-emission new passenger vehicles
– aka, EVs – will be sold in California after 2035. None of the Californians
who own the 14.3 million cars now registered in CA will be allowed to trade
them in for another internal combustion engine (ICE) vehicle. Car consumers
will only be allowed to buy an EV.
Let me guess how
popular, let alone equitable, that will be in a few years. New climate policies
like Joe and Gavin have established will fundamentally change the transportation
sector, among others. Analogous policies are already facing popular backlash in
Europe. The Netherlands and Germany already have been forced to backtrack on
several of their green climate policies’ implementation.
US EV sales have
continued to increase notably. By some accounts, they now represent about 5% of
all registered vehicles in the US. And yet Joe’s and Gavin’s beyond-optimistic
EV goals are not going to be realized for a host of reasons. Gavin’s official
duties will be long past; Joe’s hopefully not, depending on Nov. 5, 2024. No
matter, they each wouldn’t be much affected by such slippage. But we will be.
The most
prominent challenges are daunting supply-side constraints for continued growth
in the EV market. In order to meet these fantastic objectives many millions of
US-produced batteries and EVs will be required very soon, along with installation
of many more EV charging stations that will reliably provide needed kWh “fuel”
across much of the nation’s landscape.
China remains the foremost producer of battery metals, battery cells and components, as well as finished EV batteries and EVs. China produces nearly 7 times the number of EVs as the US does. It controls 82% of world EV battery production and key battery production technologies as well as dominant access to crucial battery materials like copper, nickel, lithium and other rare earth metals.
Beyond moral
suasion and expensive financial offerings like the federal incentive to buy a
qualified EV, Joe and Gavin have no real inducements to offer ICE vehicle
owners to trade in their vehicles. As of April, the average EV price remains a
sizeable 24.1% higher than an average ICE vehicle (over $11,000 more). That’s considerably
more than the federal $7,500 tax credit/rebate for buying a new EV. This matter
of EV pricing is where inevitable equity-related concerns about EVs and Gavin’s
2035 proclamation will certainly arise. After all, in California the price of
electricity will soon depend on each customer’s income level. Postponements in
the 2030 and 2035 calendar dates is practically preordained.
Rebates appear
necessary at this point, but probably not sufficient for more typical car-buying
folks to trade up to a more-expensive EV. Especially when the federal EV
incentives have already become ever-changing and hopelessly complex. The
revised, convoluted federal EV inducements are more focused on incentivizing EV
component producers to locate in the US rather than clearly providing
purchasers with money to buy an EV.
The president
and the governor need help to ensure needed EV components are available and induce
ordinary Americans – like Jim and Mary Van with their 2 mini-Vans – to actually
buy EVs . Current EV policy objectives seem like a mission impossible because
of such formidable challenges.
What can be
done? Hire Tom Cruise. Significantly expanding EV sales and EV infrastructure may
be vanquished unless Joe and Gavin convince Tom to engage in another special
mission impossible. Tom will need to turn EV sales into something loftier and
improve the befuddled EV system. They should give Tom a shot against adversity in
an unexpected 8th Mission Impossible (M.I.) adventure to re-craft the
governments’ EV policies and convince consumers to purchase them.
With his proven talents
I’m confident Tom can turn the EV market into Mission Possible (M.P.). Without
him, it will remain impossible.
There’s much for
Tom to do in EV world. Most recently, the US accounts for only 6% of global EV
battery production. No US firms are in our planet's top 10 EV battery producers.
They are either Chinese or South Korean companies. There is only one active
lithium mine now operating in the US that accounts for just 1% of global
production. Others are planned, but creating a productive lithium mine can take
up to 10 years. The US market share of EVs is roughly one 12th of Norway’s
share.
The 2022 Inflation
Reduction Act is offering $394 billion in energy and climate funding to
qualified firms and consumers. By necessity, many US firms – including major US
vehicle manufacturers – are now planning to produce more EVs and their key components
like batteries. Massive EV battery production facilities can take 5 years to
build, quixotically assuming that none of the usually-lengthy regulatory and
operational lags appear. They already have.
Multi-billion
dollar US battery-production facilities – gigafactories – on average cost 46%
more to construct in the US than in China. Current information indicates that
existing US based gigafactories employ about 8,500 employees. Significantly
more will be needed to ensure that half of all American passenger vehicle sales
will be EVs in just 7 years, and be consistent with the president’s goals that strongly
emphasize domestic production.
Should Tom
choose to accept it, this M.P. adventure will be unlike any of his previous
M.I. ones. It won’t involve many of the physically-astounding feats he’s
deservedly famous for. Nope, this adventure will instead require him to
creatively gnash together the heads and hearts of an ensemble of quintessentially
important EV people in our public and private spheres. Tom will also need to
talk with current EV owners and potential EV purchasers to understand their
important demand-side perspectives.
These people
often have conflicting visions of EV-dom. If anyone can clear up the
problematic EV goals, increase EV battery production and EV sales inside the
good ol’ USofA as well as fashioning an immaculate decrease in EV prices, it’s
Tom Cruise. He can fuel up consumer demand for EVs among the masses of US car
buyers (not just richer folks who’ve generally bought EVs so far) and modify pollyannish
government goals to realize success. If Tom can spark the broad opportunities
and benefits associated with transforming US vehicle transportation, he’ll
command our enduring gratitude. If he’s triumphant, I’ll be in a front row seat
for Dead Reckoning Part Due, Tre and Quatro. We’re all counting on you Tom.
[1]
Porsche does indeed make an EV, the Taycan.
A Bay Area Porsche dealer offers the Taycan Turbo S for $230,090. That’s a
bit more expensive than the Chevy Bolt LT’s MSRP of $28,795.
