In response to government policies, automakers are spending tens of billions of dollars over the next 10 years developing electric vehicles. Targets can be motivating. But no matter how much money is spent, moving such a large industrial and consumer ecosystem that is so fundamental to the economy faces great challenges, with the result that the share of new car sales that are EVS by 2030 will be more likely to be around 25%. . The challenges remain.
It was in 2008 that the first glimmer of what is now Biden’s vision appeared with the arrival on the road of the first commercial electric car of modern times – the Tesla Roadster. At the time, the all-electric Roadster looked like something new. Moreover, its appearance was somewhat accidental. Five years earlier, a young electric vehicle enthusiast, JB Straubel, had lunched at a fish restaurant in Los Angeles with Elon Musk, trying to convince him of the potential of an electric plane. When Musk showed no interest, Straubel switched to an electric car. It was an idea originally championed by Thomas Edison over a century ago, but failed against the Model T. But in 2008, Musk jumped at the idea. A few years later, Musk said that without this lunch, “Tesla would not exist, basically.”
The Roadster, starting at over $ 100,000, wasn’t exactly a mass market car. But there were soon other first entrants. Nissan, where engineers had been working on an electric car for more than two decades, introduced the Nissan Leaf in 2010, the same year General Motors released the Chevy Volt. GM continued in 2016 with the Bolt, a major two-phase project under then-development leadership and now CEO Mary Barra.
Now let’s move quickly a few years. Today, automakers around the world are rushing to catch up with Tesla and release a full line of electric vehicles. General Motors has set itself the goal of going all-electric by 2035. Mercedes has just taken a leap forward with the goal of being fully electric for light vehicles by 2030. “The transition to vehicles electric speeds up. … The tipping point is approaching, ”Mercedes CEO Ola Källenius said last month. “This step marks a profound reallocation of capital. “
The # 1 factor accelerating the shift to electric vehicles is that governments are putting an increasingly heavy foot on the accelerator. The European Union is proposing strict regulations on carbon dioxide emissions from cars manufactured or sold in Europe that would effectively ban the sale of new internal combustion engine cars after 2035. California and Massachusetts have also announced their ambition to ban new internal combustion engine cars in 2035. Biden has now upped the stakes by putting pressure on automakers to meet that 50% electricity target by 2030. Governments around the world are also fueling purchases of electric vehicles by consumers with generous tax incentives and subsidies, and emission standards are becoming increasingly stringent. This month, the Biden administration proposed stricter energy efficiency standards in the United States. This will increase the cost of conventional cars in an attempt to encourage more new car buyers to switch to electric instead. In Shanghai, China, the city offers free license plates for what Beijing calls “new energy vehicles,” while consumers have to go through an auction to get a license plate for a car with it. a traditional engine.
It will take time for the adoption of electric vehicles to have a major impact on emissions, as cars stay on the road for a long time – the average in the United States is 12 years. But a full fleet of electric vehicles for light vehicles would have a direct impact on emissions. “Light vehicles” are responsible for about 16% of human CO2 emissions in the United States (and about 6% globally).
But as the shift to electric vehicles accelerates, three big challenges stand out. One is mining and supply chains to support this change. Batteries require a lot of minerals, which means a lot of mining and transporting materials. According to mining and energy specialist Mark Mills, a thousand pound electric car battery requires the movement of 500,000 pounds of soil during mining. But battery costs have fallen dramatically. Increased government and private research will further reduce costs and improve performance.
New, very large and complex supply chains will be needed to replace those that deliver gasoline to motorists. Today, many of those supply chains are dominated by China, with whom tensions are obviously mounting. China, for example, currently controls 80% of lithium battery supply chains. To reduce the current heavy dependence on China, American automakers are building battery factories in the United States – General Motors in partnership with Korean LG Chem and Ford in partnership with Korean SK Innovation. Ford is also entering into an EV partnership and a half-billion dollar investment in start-up Rivian, which this year introduces electric vans for Amazon deliveries and off-road EV trucks and SUVs. Expect “energy security” – the mantra that has dominated politics for half a century – to give way to “battery safety”, with government policies backing it.
But the magnitude of what is needed should not be underestimated. It will be a huge job to build a supply system that supports the current 600,000 new electric vehicles each year into a system capable of supporting Biden’s goal of around 9 million annual new car sales by here. 2030. Just to meet Biden’s 50% target by 2030 would require a 15-fold increase in annual electric car production over a short eight-year period.
The second challenge is to ensure the infrastructure to support electric vehicles in the post-gasoline era. This means building a ubiquitous charging infrastructure for electric vehicles and modernizing and expanding the power grid. The grid must also be 100% reliable, a requirement that recent major power disruptions in California and Texas underscore. As futurist Peter Schwartz puts it, the entire electrical system becomes part of the electric automobile supply chain.
These requirements are enshrined in the new infrastructure bill that the Senate has just adopted. In defending the bill, the White House is emphasizing competition with China – “the US market share” of electric vehicles “is only one-third the size of the Chinese market.” And that, he adds, “must change”. To that end, it is investing $ 73 billion in modernizing and expanding the country’s electricity and clean energy grid. It also allocates $ 7.5 billion “to create a nationwide network of electric vehicle chargers” as part of the administration’s goal “to accelerate the adoption of electric vehicles.”
A group of House Democrats jumped this month to propose that the $ 7.5 billion be more than tenfold – to $ 85 billion. But the system that currently “recharges” cars – gas stations – was developed by the private sector without government support. A long-term viable EV charging system needs a business model that is also based on the private sector and not dependent on the federal government and shifting policies.
The third challenge concerns the public – the people who buy automobiles. For most people, their biggest capital expense, after their home, is their car. It is simply too early to know how eager people, beyond early adopters, will be to switch from something they’ve always known – gasoline cars – to something new to them: vehicles. electric. And that’s true even though battery upgrades extend runtime. But confidence will grow as they see EVs on the road and in the aisles of their neighbors, as the choice and range of models and features increase, and automakers step up their business drive to push. buyers to make the change.
It was just 18 years ago that having lunch at a fish restaurant in Los Angeles with Elon Musk started the idea of electric cars. And now, an auto industry that seemed steadfast in its operations and unlikely to change is – in its second century – tipping into the future. The speed at which it is rocking will only become clear in the next few years.