Electric Cars Are Coming. How Long until They Rule the Road?

by Brad Plumer, Nadja Popovich and Blacki Migliozzi (New York Times) These vehicles represent the 250 million cars, S.U.V.s, vans and pickup trucks on America’s roads today. The vast majority run on gasoline. Fewer than 1 percent are electric.

Automakers are now shifting to electric vehicles, which could make up one-quarter of new sales by 2035, analysts project. But at that point, only 13 percent of vehicles on the road would be electric. Why? Older cars can stick around for a decade or two.

Even in 2050, when electric vehicles are projected to make up 60 percent of new sales, the majority of vehicles on the road would still run on gasoline. Slow fleet turnover is a major challenge for climate policy.

If the United States wanted to move to a fully electric fleet by 2050 — to meet President Biden’s goal of net zero emissions — then sales of gasoline-powered vehicles would likely have to end altogether by around 2035, a heavy lift.

The average light-duty vehicle operating in the United States today is 12 years old, according to IHS Markit, an economic forecasting firm. That’s up from 9.6 years old in 2002.

What’s more, some economic research suggests, if automakers like G.M. phased out sales of new internal combustion engines, it’s possible that older gasoline-powered cars might persist for even longer on the roads, as consumers who are unable to afford newer, pricier electric cars instead turn to cheaper used models and drive them more.

So policymakers may need to consider additional strategies to clean up transportation, experts said. That could include policies to buy back and scrap older, less efficient cars already in use. It could also include strategies to reduce Americans’ dependence on car travel, such as expanding public transit or encouraging biking and walking, so that existing vehicles are driven less often.

Still, a “Cash for Clunkers” program could prove relatively inefficient, said Christopher R. Knittel, an economist at the M.I.T. Sloan School of Management who has studied the policy. The original program often benefited Americans who were on the verge of trading in their vehicles anyway, he said, and it often missed the drivers who were driving particularly gas-guzzling vehicles long distances.

“It’s a blunt tool, although there are likely ways to improve the program,” Dr. Knittel said.

As an alternative, Dr. Knittel noted, a tax on carbon dioxide emissions could prove more effective, by increasing the price of gasoline and giving drivers a clear incentive both to upgrade to cleaner vehicles and drive less. Yet lawmakers have often steered clear of hiking gas taxes, worried about both political blowback and the effects on low-income drivers.

That leaves a final, potentially powerful option: Cities could reshape their housing and transportation systems so that Americans are less reliant on automobiles to get around. READ MORE

Excerpt from Detroit News: Additional federal help will be critical as the U.S. auto industry faces ongoing competition with Europe and China for the future EV market, said Jonathan Jennings, vice president for Global Commodity Purchasing and Supplier Technical Assistance at Ford.

His comments came as part of a Senate Finance Committee hearing on how the U.S. tax code can be improved to aid American manufacturing. The other witnesses — including National Association of Manufacturers CEO Jay Timmons, MIT professor Michelle Hanlon, United Steelworkers District Director Donnie Blatt and Intel Corp. CFO George Davis — also urged low corporate taxes and incentives to discourage outsourcing.

The global shortage of semiconductor chips has sidelined production at auto plants around the country and illustrated the frailty of the supply chain, Jennings said. And competitors like China maintain dominance over crucial EV components such as lithium-ion batteries.

“The U.S. is a global clean energy country that is in a race right now. We know $100 billion has been put in that race by China for electrification," Michigan Sen. Debbie Stabenow, D-Lansing, said. But she added there are layoffs in Michigan right now because of the shortage of semiconductor chips, and a potential crunch on battery availability may be imminent.

Sales of electric vehicles have taken off in China and Europe while they remain less than 2% of sales in the U.S. And China is home to 73% of the world's lithium ion battery manufacturing capacity and the U.S., in second place, has around 12% capacity, according to a 2019 analysis by Bloomberg.

Last month, the U.S. International Trade Commission prohibited the majority of U.S. imports of batteries from Korean company SK Innovation for the next ten years for stealing trade secrets from rival LG Chem. The order will go into effect in mid-April unless Biden intervenes and reverses the decision.

Jennings told the committee that Ford will have to "look to foreign suppliers" to fulfill requirements by the United States-Mexico-Canada Agreement due to the decision because there isn't adequate battery supply available in the U.S. READ MORE