In our widely divided political landscape, there are those that favor moving toward electrification of automobiles while others, such as Vivek Ramaswamy, who is running for President in 2024, declared the movement “a step in an anti-American direction that I think is frankly dangerous to the future of the country”. (From the New York Times, October 5, 2023, link here, paywall likely.) In Ramaswamy’s camp are former President Trump, Florida Governor Ron DeSantis, former Vice President Mike Pence, and Senator Tim Scott of South Carolina.
The new “bête noire” on this issue is China and its large production capacity for electric vehicle batteries. It is ironic, however, that “money is pouring in” (according to the article) to the U.S. to build vehicles and components, including battery factories. It seems contradictory with all the discussion around “re-shoring” and bolstering U.S. manufacturing that so many Republicans oppose these battery factories. (Couldn’t the concerns with China be ring-fenced in some fashion, rather than refusing new manufacturing?). Ramaswamy held a rally in Michigan to oppose plans to construct a battery plant there (albeit by a Chinese subsidiary). In Virginia, Republican Governor Glenn Youngkin, “blocked Ford from considering his state for a new battery factory” on the premise that the automaker “was being used as a front for China”. Ford subsequently moved its investment to Michigan. Senator Scott, too, railed against incentives and a tax code that implies “buying an electric vehicle is somehow in the owner’s best interest” even though incentives South Carolina granted BMW, Volvo, and Mercedes Benz helped these automakers expand EV operations in his state. In contrast, Georgia Republican Governor Brian Kemp stated that EV manufacturing is “creating thousands of high-paying EV jobs across our state”.
Freshly back from the National Federation of Municipal Analysts’ (NFMA) conference about Transportation, I led a panel discussion on post-pandemic changes in transportation, including demographic and geographic migrations, urban “hollowing out”, changes in transit ridership, the meaning of electric vehicles for combatting climate change and the build out of EV charging stations. “Light-duty” vehicles in 2021, accounted for 17% of U.S. greenhouse gas emissions, according to the U.S. Environmental Protection Agency – a key reason for the focus on electrifying automobiles.
One of the key takeaways of the conference, not discussed much in my opinion, is that electric vehicles could insulate drivers (and household budgets) from the volatility in the price of gasoline. Consider the energy crisis of the mid-1970’s, during the 1973 Arab-Israeli War, that inspired member countries of OPEC (the Organization of Petroleum Exporting Countries) to impose an embargo against the U.S. as well as the Netherlands, Portugal and South Africa. This was in retaliation for U.S. support of the Israeli military. Soaring prices, long lines at gas stations and significant inflation ensued. Following this period, federal policies were a direct effort to reduce dependence on middle eastern oil. President Nixon embraced energy conservation, creation of the Strategic Petroleum Reserve, a national 55 mph speed limit on U.S. highways and subsequently, under President Ford, fuel economy standards that changed automobile design and production.
We have returned to these energy wars in the last two years. Russia’s invasion of Ukraine upset energy markets and influenced the price of oil particularly in Europe. Over summer 2023, OPEC determined to cut their oil outputs to keep supply tight and maintain prices in the face of an expected economic slowdown. Who knows how the current Israeli-Hamas war will play out in global oil markets? As the war progresses, it will likely have an effect on prices, given recent rallying by middle eastern countries against Israel and the U.S. Electrification of automobiles and other transportation vehicles such as public busses, government and corporate fleets could provide protection from unexpected fossil fuel price shocks.
Who could argue with reducing the burden on household budgets, having cleaner air, protection from gasoline price volatility in the context of geo-political instability, adding new, well-paying jobs and slowing the negative impact of climate change? We say foot on the accelerator.
For those interested in going further, we include a document below with links to resources that help to set the context for post-pandemic transportation changes. These links provide context for discussions around post-pandemic changes in U.S. geography of “where we live and where we work”, interest/lack of interest in transit, adoption of EVs and roll out of charging stations.
