Moving the needle will require a top-to-bottom rethinking of how Americans build, buy and use their vehicles, from meeting surging demand for rare earth minerals used in batteries to building out an accessible network of charging stations across the country.
The challenges for transforming the U.S. into a global leader in electric vehicles are coming into focus as the Biden administration seeks to galvanize action on climate change this week during a White House global summit aimed at extracting ambitious commitments from other countries. In the U.S., the biggest source of greenhouse gas emissions is tailpipe emissions from cars and trucks.
Biden’s infrastructure plan budgets $174 billion for electric vehicles, including tax rebates for buyers and programs to achieve his goal of installing half a million charging stations by decade’s end.
The money will need to address a series of challenges. As of now, it’s essentially impossible to buy an electric vehicle made in the U.S. with American parts. Much of the supply chain, from the lithium-ion batteries to the brushless motors, is outside the U.S., in places like China, Japan and even Congo.
“America is in a race against economic competitors like China to own the EV market — and the supply chains for critical materials like lithium and cobalt will determine whether we win or lose,” Energy Secretary Jennifer Granholm said recently.
American consumers regularly point to high costs for EVs, fewer options for models they like and the challenge of recharging vehicles conveniently as reasons they still prefer gas-burning combustion engines.
It’s the high cost of EV batteries, which can be about a third of the price of an electric vehicle, that pushes their price tags above those of traditional cars and trucks. But automakers say technological innovations, along with scaled-up production, can drive those costs down to the point where consumers soon won’t have to choose between tailpipe emissions and their wallets.
Automakers and political leaders are betting that those obstacles will soon crumble.
“We can’t forget that the playbook has already been played,” said Karen Felton, who oversees power and utilities consulting for Ernst & Young. “We can look to China, we can look to the European countries and see what works and what’s needed.”
Biden’s emphasis on building American-made cars with union labor presents another uphill battle, particularly when it comes to his goal of using the federal government’s buying power – through its own fleet of hundreds of thousands of vehicles – to boost the nascent EV industry.
All electric vehicles made in the U.S. are made either with nonunion labor, like Teslas, or with mostly imported parts, failing Biden’s “all-American” test. This week the United Auto Workers implored GM to pay full union wages to workers at its joint ventures, like Ultium Cells’ building EV components, calling it “a moral obligation.”
By the time the parts make it into autos available to buy at the dealership, the challenge for consumers is to find a way to recharge them that fits into their lifestyles. Auto industry analysts say the typical prospective EV purchaser has “range anxiety” – the fear that a vehicle will run out of battery power before there’s a convenient way to recharge it.
And then there’s the need for public infrastructure in the form of changing stations.
Orlando, Florida, has worked to install hundreds of charging stations in part to boost the use of electric vehicles in the tourism destination’s massive rental car industry. Mayor Buddy Dyer says the city is also developing land use codes that will require future parking facilities to either have charging stations or be wired up with power conduits to facilitate easy installation in the future.
“It’s always been one of those chicken-and-egg things: Do you have the electric vehicles, or do you have the charging infrastructure?” Dyer said. “I think it’s pretty clear that to have an increase in electric vehicles, the government and other entities need to invest.”
As older cars and trucks are phased out and increasingly replaced by electric vehicles, demands on power utilities will increase – especially as they are under pressure to generate more of that power from renewable sources like wind and solar.
That means a careful and constant rebalancing of the country’s electric grid, which requires that supply and demand of electricity are kept roughly even. Vehicles charging at home draw power overnight when demand on the electricity grid is lower or even sell electricity back to the grid at times of high demand.
“This is a 20-year phenomenon. It’s not like we need to do this overnight,” said Pasquale Romano, CEO of the EV charging network ChargePoint. “You’re breaking a big problem into bite-sized pieces every year.”
Jacob Ward contributed.