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The EV revolution: can Biden take us the last mile?

By Nicolaus Schmandt

113 years after Henry Ford’s first Model T rolled off the assembly line in Michigan, combustion engines remain the dominant means of moving a vehicle. For technology to last more than a century is an impressive run. Compared to phones, computers, and personal electronics, multiple iterations of which are unrecognizable and unusably primitive today, cars have remained surprisingly consistent. 

But, finally, the end seems to be coming with Ford planning to put its last gasoline engine in a car in 2034, after which all vehicles produced by Ford will be electric. That’s around the time several governments, including California and most of Europe, are saying they will ban the sale of gas vehicles. All major automakers seem to be preparing for this; GM has already said there won’t be any new gas-powered Cadillac models and everything it produces will be electric by 2035, and Toyota could reach that milestone even sooner. I have not heard of a single auto producer planning to stick with gasoline cars beyond the immediate future.

In many ways, it’s remarkable it took so long for electric cars to get here. GM first experimented with electric cars in the late 90s, producing about a thousand units for consumer testing. These incredibly awkward-looking cars did not offer much in range or power, but even then they were a hit. In what is probably one of the greatest boondoggles in all product history, GM and all other car manufacturers experimenting with electric cars pulled the plug on their programs and declared electric vehicles not worth pursuing. 

It’s possible this wasn’t a mistake, but rather the automobile industry collectively realized just how much they stood to lose from electric vehicles; dealership repair revenue would likely evaporate and the longer lifespans would mean dramatically fewer vehicles would need to be produced. It would explain why they so aggressively liquidated the programs, not allowing any of their prior lessees to purchase the cars, and crushing the entire fleet. Those vehicles are one of the hardest car models to obtain, only a single working car from GM’s experiment survived. But, whatever the reason, the stage was perfectly set for the electric car startup Tesla, which produced its first vehicle barely a decade later and began an irreversible tide of electric car popularity.

As they did in the 90s, electric cars will likely catch on quickly as more and more Americans try them. In addition to fast acceleration and smooth handling, they require far less maintenance (goodbye, oil changes) and will not have problems if the car isn’t turned on regularly. They will also last much longer than combustion engines: while you’d be lucky to get 200,000 miles out of a combustion engine, many electric batteries can last for a million miles or more (though none of them have gone that far or long yet, and different models degrade at different rates).

Widespread usage of electric cars will also herald bigger and bigger changes in car technology. Unlike gasoline cars, which must be running for any electronics to function, electric cars can quietly update themselves while charging or sitting in your garage, allowing them to continually download better self-driving and safety technology, or potentially allow the car to process data it has collected from previous days of driving. This will speed the amount and quality of automated support systems and allow cars to reach greater and greater levels of autonomy.

As inevitable as electric cars may be, it seems optimistic to predict that the gas engines in 97% of cars sold in 2020 will no longer be available for purchase in 14 years. We still haven’t seen electric vehicles that are fully competitive with current gas models without government subsidies, and charging infrastructure in America is still very limited. These limitations have caused electric car sales in the US to slow over the past two years, though they have been gaining traction in Europe and China. For all the talk and improvements in EV technology, there has been very little noticeable change in America so far. Biden’s infrastructure package could make a big difference in accelerating these changes, if used effectively.

The Wall Street Journal had several journalists in different parts of the world test electric vehicles and describe their experiences with the technology and the problems they encountered. Similar to what GM found, in the United States people who could use the electric cars for short distances and had a reliable place to charge them loved them. Trying to take them outside of a single charge, however, was practically impossible, even with extensive planning (though this was a few years ago). A notable exception, however, was Tesla, which already had a large and reliable charging network, and users that did not have any serious complaints. But from that story and other sources, the problems facing electric vehicles in the United States can be boiled down to three major issues: charging time, charging availability, and purchase cost. Some of these are issues that Biden’s package can help with.

Charging time is the easiest one, as battery technology is already solving this. Newer battery models are lowering the charge time with improved design and charging architecture. But even with current technology, high-voltage “rapid” charging stations can fully charge a battery in just 20-40 minutes, but not all electric vehicles support this option. Lower voltage stations, such as at home, near an office, or just attached to a parking space, are slower but usually they don’t need to charge as quickly since the car sits there for longer. But for cross-country travel rapid charging infrastructure is necessary, and thus good charging infrastructure is also tied into this issue.

Charging infrastructure is an area where the United States is severely lacking compared to Europe and China. Rapid, higher-voltage charging stations are essential to be able to take a car long distances, and lower-voltage stations are necessary for urban owners who don’t have an assigned parking space. Both are scarce in the United States, at least for non-Tesla vehicles. But this is not a terribly expensive problem, as Tesla has built a successful charging network for around $100 million, and Volkswagen has already committed to investing $2 billion in charging infrastructure as part of a settlement to an emissions scandal. Biden’s $174 billion dwarfs either of these sums, though it’s unclear exactly how much of this will be spent on infrastructure. But even a small fraction would make a large difference in charging availability.

The final problem electric cars face is in the price point, which is the main reason gasoline cars continue to be the preferred choice among consumers. Tesla made headlines with the bargain price of the Model 3 at around $40,000 in 2017 (down to $38,000 now) which was by far the cheapest electric vehicle available, but this remains extremely expensive compared to gasoline cars, which can cost under $20,000. But the price of electric cars continues to come down, and there is now significant competition to the Model 3 that is marketed to the broad consumer market: Kia Niro, Hyundai Kona/Ioniq, Chevrolet Bolt, Nissan Leaf, and the Ford Mach-E to name a few. Competition, improving technology and economies of scale will continue to drive the price down steadily. Most analysts say that the point at which gas and electric cars will reach price-parity should come in the next few years without any government intervention, though government subsidies would cause us to reach that point sooner. Currently, each model electric vehicle is allowed a fixed number of $7,500 tax credits, though the only one to use them up so far is Tesla. These tax credits have cost the US government less than $10 billion dollars, and again, Biden’s $174 billion dollar price point is much larger than anything the federal government has spent so far. Credits to reduce the sticker price of new vehicles would certainly cause them to be adopted in larger numbers sooner, which would drive production scales higher and prices lower, accelerating the overall accessibility of electric cars.

The $174 billion allocated to electric vehicles in Biden’s infrastructure plan could easily be a game-changer if spent wisely. It’s worth noting that most of the changes will happen with or without government support, but they will likely happen much faster with it. Time will tell what type of bill will finally come out of negotiating and wrangling in Congress, but even a fraction of what has been proposed would lead to significant enhancements in charging availability and the cost of electric vehicles that would speed their widespread adoption.

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