President Biden wants half of all new vehicle sales to be electric vehicles (EVs) by 2030, and he’s trying to accelerate that transition with tougher tailpipe emission rules for cars, sport utility vehicles, and pickup trucks. The risk he’s taking isn’t that the public will turn against this transition — most are supportive, even if they’re not buying EVs just yet — but with inflation already troublesome, the inevitable higher costs of gasoline-powered cars might not be matched with a corresponding decrease in costs for EVs.
The president is basically forcing the issue, which could create an opening for opponents with other ideas. The barriers we face in meeting his timetable have been cited elsewhere, but it’s worth recounting that they include cost-conscious consumers, limits on accessibility to lithium for EV batteries, and the amount of work remaining to fully build out a network of public charging stations.
The Environmental Protection Agency (EPA) estimates that the Biden emissions proposal would avoid 7.3 billion tons of carbon-dioxide emissions through 2055, but phasing out internal combustion engines would be easier if consumers had a stronger appetite for EVs. At the moment, however, worries about cost and vehicle range serve as an appetite suppressant. Industry research firm J.D. Power reports that the average transaction price for an EV is $61,800, compared with $45,600 for vehicles with internal-combustion engines. Those prices seem high in both cases, but even with high rates of satisfaction among EV owners, a recent Gallup poll found that only 12% of Americans are seriously considering buying an EV, while 43% said they might consider buying one and 41% said they would not.
The Biden administration’s answer is that history is littered with predictions of those who underestimated American ingenuity, but the administration is clearly worried about the pace of innovation. In addition to higher emission standards, Biden is trying to fast-track the transition with $7.5 billion to expand the EV charging network, which is part of the $1 trillion infrastructure bill passed in 2021, and with tax credits of up to $7,500 for consumers who buy qualified EVs — tax credits that are funded in the 2022 Inflation Reduction Act.
Reducing carbon emissions is going to take more than subsidies, which ironically encourage energy use. I’m not a proponent of new taxes without commensurate societal value, but perhaps a carbon tax — with the revenue applied to clean energy innovation and development — would be a more effective way to encourage energy efficiency and cut emissions over time.
