The editors of the Wall Street Journal comment on President Biden’s electric vehicle photo op last week:
What a spectacle. We’re referring to the political advertisement that auto makers staged with President Biden on Thursday endorsing the Administration’s stricter fuel-economy rules and climate agenda. Behold Big Business colluding with Big Government to grab subsidies and raise consumer prices.
The White House previewed the electric-vehicle promo with joint statements from auto makers, the United Auto Workers and California Gov. Gavin Newsom. Ford, GM and Stellantis (formerly Fiat Chrysler ) announced their “shared aspiration†for electric cars to make up 40% to 50% of their sales in 2030. EVs make up a mere 3% of current U.S. sales, and most are Teslas.
“This represents a dramatic shift from the U.S. market today that can be achieved only with the timely deployment of the full suite of electrification policies committed to by the Administration,†including government incentives for consumers, charging stations and battery manufacturing, Detroit’s auto makers said. For “incentives,†read subsidies.
concluding:
Auto makers have been touting their increasing EV sales and claim electric cars are the “future.†Great. Then government doesn’t need to subsidize them. Steve Jobs never asked the government to pay people to buy iPhones or to finance their production.
And CEOs wonder why Americans have soured on big business. This isn’t capitalism. It’s corporate socialism, or state capitalism. We hope these corporate titans enjoy their new government “partners.†Maybe they can put Elizabeth Warren and Bernie Sanders on the corporate board.
I wish more people would talk ways and means rather than ends. Presently, about 70 million vehicles are sold globally per year. Of those about 3 million are electric vehicles. U. S.-only figures are roughly proportional to that with 15 million vehicles sold annually but it’s the global figure that’s important. To meet that goal we’ll need to increase production roughly 10-fold.
There’s about a kilogram of lithium in an EV battery. If all global lithium production were devoted to EV batteries we’d have just about enough lithium. Translation: we’ll need new sources of lithium to meet that target. It takes about five years to bring a new hardrock lithium production facility into production and about seven years to get a new brine facility into production. Translation: it will be difficult to bring new sources into production within the timeframe. And that’s just one material.
The situation for cobalt, another material needed for EV batteries, is even worse. Even if we were to devote 100% of annual global cobalt production to EV batteries it wouldn’t be nearly enough. Another way cobalt is more difficult: nowadays most lithium production is in Australia while most cobalt production is in the Democratic Republic of Congo.
You could have written pages on technical reasons the stated EV goal is unserious.
Either just a photo op for an unserious man or a thinly disguised promise to subsidize sales for GM.
GM and Ford revenues have fallen off a cliff over the last decade, almost matched by the increase in Tesla sales. Vehicle sales generally have fallen sharply from their peak about five years ago.
The batteries keep getting better so they are a good option for a lot more people. A lot fewer parts to replace which should mean less down time and lower costs along with savings on fuel. Charging is the problem. Doesnt seem very practical in a lot of urban settings.
In 1900 we didnt produce much oil. We built a lot of cars and they drilled for oil. I expect that if demand increases production will increase. If they were mining 10 times as much lithium now what would they do with it?
Steve