Will Wes Moore & Joe Biden Let You Choose the Car You Want?
Will a US Auto Industry be Left When They Are Done?
Among the pocketbook questions 2024 voters will be deciding is what type of car they can buy. This year’s elections will likely determine whether the government will mandate limiting access to just electric vehicles.
Last week, the Biden administration announced new automobile emissions standards that would force electric vehicles on consumers. According to the EPA, under its final rule, the industry could meet the new limits if 56% of new vehicle sales are electric by 2032, along with at least 13% plug-in hybrids or other partially electric cars and more efficient gasoline-powered cars that get more miles to the gallon.[i]
The Biden Administration is less aggressive than Gov. Wes Moore in forcing E.V. adoption. Last year, Maryland adopted rules requiring manufacturers to continuously increase the share of electric vehicles they sell, reaching 100% of passenger car and light truck sales by model year 2035. [ii]
However, electric vehicles made up less than 8% of new auto sales last year, and more than half were made by Tesla. They accounted for less than 4% of General Motors and Ford sales. Both price and performance have been barriers to faster adoption. According to the Wall Street Journal, the average price of a new E.V. is roughly $50,000, and only two cost less than $40,000 as of December: the Chevy Bolt and Nissan Leaf. While automakers have slashed E.V. prices to boost sales, they are also losing money. Ford ran an operating loss of $4.7 billion on its E.V. business in 2023, equivalent to $64,731 for each E.V. sold. [iii]
Compare Ford and G.M.’s prices with the Chinese-made BYD Seagull. Early this month, the Chinese auto giant announced that it was cutting prices in China for its cheapest car, the Seagull, by 5% - bringing the price under $10,000.[iv]
According to the Economist in January: “Just five years ago China shipped only a quarter as many cars as Japan, then the world’s biggest exporter. This week the Chinese industry claimed to have exported over 5 million cars in 2023, exceeding the Japanese total. China’s biggest carmaker, BYD sold 500,000 electric vehicles in the fourth quarter, leaving Tesla in the dust.” [v]
Prices in the U.S. remain higher. When imported, Chinese-built EVs are subject to a 27.5% tariff. This tariff combines a 2.5% tariff on imported cars broadly plus an additional 25% tariff introduced by the Trump administration in 2018 on China-made vehicles.
However, given the price differential, in a primarily E.V. market and in which sales of gas vehicles are penalized, U.S. automakers may not be competitive for long. Republican Sen. Marco Rubio of Florida has proposed sharply boosting tariffs on Chinese vehicle imports by $20,000 per vehicle to stop the country “from flooding U.S. auto markets." [vi] Even Biden Energy Secretary Jennifer Granholm has expressed concerns: ”We are very concerned about China bigfooting our industry in the United States even as we are building up now this incredible backbone of manufacturing." [vii]
Writing in the City Journal, engineer Mark P. Mills challenges many of the E.V. assumptions by noting that before rushing into this transition, the energy impacts of gas-powered and electric-powered should be compared by considering the added environmental impact of manufacturing E.V.s:
“The CO2 emissions arising from building an E.V. before it gets driven revolve around a simple fact: a typical E.V. battery weighs about 1,000 pounds. That half-ton battery is made from a wide range of minerals, including copper, nickel, aluminum, graphite, and lithium. Accessing those minerals requires digging up and processing some 250 tons of earth per vehicle.[viii] All that mining, processing, and refining uses hydrocarbons and emits CO2. The critical fact found in the technical literature is that those upstream emissions vary by 300 percent or more, depending on where and when materials are mined and processed.[ix] At the higher end of known ranges, upstream battery emissions can wipe out emissions avoided by not driving a gasoline car.” [x]
Instead of evaluating these environmental trade-offs, the Moore and Biden administrations largely avoided public debate. Instead, they chose to force vehicles on consumers that they would not have bought for themselves without heavy-handed government intervention. Their diktat may well also have a catastrophic impact on the American automobile industry.
[i] https://apnews.com/article/epa-electric-vehicles-emissions-limits-climate-biden-e6d581324af51294048df24269b5d20a
[ii] https://governor.maryland.gov/news/press/pages/Governor-Moore-Announces-Maryland-Adoption-of-the-Advanced-Clean-Cars-II-Rule-to-Combat-the-Effects-of-Climate-Change.aspx
[iii] https://www.wsj.com/articles/joe-biden-electric-vehicle-mandate-gas-powered-cars-2032-epa-c2a72414
[iv] https://www.reuters.com/business/autos-transportation/chinas-byd-lowers-starting-price-its-lowest-priced-ev-model-seagull-by-54-2024-03-06/
[v] https://www.economist.com/leaders/2024/01/11/an-influx-of-chinese-cars-is-terrifying-the-west
[vi] https://www.cnbc.com/2024/03/22/byd-seagull-ev-puts-global-auto-execs-politicians-on-edge.html
[vii] China could flood U.S. electric-vehicle market with its offerings (cnbc.com), https://www.cnbc.com/2024/03/07/china-could-flood-us-electric-vehicle-market-with-cheap-offerings.html
[viii] Electric Vehicles for Everyone? The Impossible Dream | Manhattan Institute; https://manhattan.institute/article/electric-vehicles-for-everyone-the-impossible-dream
[ix] Green Energy Reality Check: It's Not as Clean as You Think | Manhattan Institute; https://manhattan.institute/article/mines-minerals-and-green-energy-a-reality-check
[x] https://www.city-journal.org/article/tapping-the-brakes-on-electric-vehicles