Here Comes the EV Backlash

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October 03, 2023

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by Arianna Skibell (Politico's Power Switch) The battle against electric cars is turning into a campaign issue for conservative politicians on both sides of the Atlantic, a development that threatens to neuter the climate benefits of moving away from gasoline.

Some European countries and the U.K. have already walked back policies aimed at combating climate change, amid a wave of populist resistance to green initiatives, write Suzanne Lynch, David Ferris, James Bikales and Timothy Cama.

In the U.S., former President Donald Trump and his Republican rivals are ramping up their anti-EV rhetoric, while GOP-led local and state governments such as Texas are imposing fees and other burdens that could make it harder to own an electric car.

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Skipping the second Republican primary debate, Trump visited Michigan last week where he lampooned the Biden administration’s “draconian and indefensible” electric vehicle policies. He said abandoning the internal combustion engine would be “a transition to unemployment and inflation without end.”

Similarly, Italian Transport Minister Matteo Salvini has denounced a proposed European Union ban on gasoline-powered cars as job-destroying “madness” that would benefit China, which controls the bulk of the world’s battery minerals and manufacturing.

In the U.K., Prime Minister Rishi Sunak extended the deadline to phase out gasoline vehicles from 2030 to 2035 as he gears up for elections that could occur next year. Even Germany, which is led by a left-leaning chancellor, watered down an EU proposal to phase out combustion-engine vehicles. READ MORE

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Electric cars draw a backlash across the U.S. and Europe -- The push to move away from the internal combustion engine is becoming an election issue on two continents. (Politico)
Opinion: Why EVs are suddenly controversial (Princeton University/CNN)
The future of electric vehicles looms over negotiations in the US autoworkers strike (Associated Press)
Inside the transatlantic pushback against electric vehicles (Politico Energy; includes AUDIO podcast)
Most Americans still don't want an electric car — and many EV buyers end up going back to gas (Business Insider)
Mayors to Biden: We’re not prepared for your electric vehicle boom (Politico)
Tesla Aside, EV Buyers Aren’t Staying Loyal to EVs: (Green Car Reports)
Does the auto industry have an EV loyalty problem? The easy headline is: "3 out of 4 Luxury EV Households Stick with EVs for Next Vehicle." But remove Tesla's industry-leading loyalty numbers from the equation, and the percentage for the rest of the industry falls off sharply. That could pose a problem for legacy automakers getting people to like — and stay loyal to — electric vehicles. (S&P Global Mobility)
It's getting harder for dealers to sell EVs. That's a bad sign for the industry. (Business Insider)
Toyota Chairman Says People Are Finally Seeing the Reality About EVs - - Akio Toyoda’s comments come amid cooling U.S. demand and a price war with China (Wall Street Journal)
The future of electric cars could be at stake in 2024 (Politico Nightly)
Why experts say falling EV prices could actually hinder widespread adoption (CNBC)
Biden Power Plant and EV Plans Hit a New Obstacle: Vulnerable Democrats: Moves could appeal to cost-sensitive voters in tight contests; Pause on LNG export permits could stoke fresh outcry (Bloomberg)
Infographic: EU elections - Climate policies face populist backlash (S&P Global)

Excerpt from Business Insider: Most Americans don't intend to buy an electric car in the near future, according to a new study; People who do spring for an EV often buy a gas car as their next purchase, per another study; Still, EV sales are climbing fast and are on track to surpass 1 million units in the US this year. -- In a recent poll conducted by Yahoo Finance and Ipsos, 57% of respondents said they were not likely to choose an EV when they buy their next car. (For the purposes of the study, EVs included fully electric cars and plug-in hybrids, which have a larger battery and more electric range than traditional hybrids.)

Of that majority, 36% said they were "not at all likely" to go electric, while 21% said they were "not too likely." Thirty-one percent of those surveyed said they were likely to buy an EV.

The biggest factors turning potential buyers off from EVs are the same worries that consistently pop up in these kinds of surveys: High vehicle cost, limited driving range, and insufficient charging infrastructure. The study also highlights a striking political divide among the EV-curious; 41% of Democrats said they'd buy an EV, compared to only 17% of Republicans. READ MORE

Excerpt from Politico: America’s cities and towns are not prepared for the electric vehicle boom.

Many of those mayors say their communities are not even close to being equipped to support growing demand for cars that run on electricity instead of fossil fuels due to a lack of charging stations, outdated electric grids and inadequate funding. All that needs to change – and soon – before more Americans feel comfortable investing in an EV and fulfilling Biden’s promise to reduce the nation’s carbon footprint.

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The latest topic we asked the Mayors Club about: electric vehicles. Mayors are on the frontlines of carrying out the White House’s EV agenda, from applying for federal grants to enticing companies to build manufacturing plants, and even down to deciding on which street to install a charging station.

Here’s what our mayors told us:

More than 75% of mayors strongly support Biden's plan.

Fewer than 50% say their cities are somewhat or very prepared to support the widespread adoption of electronic vehicles:

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Consumers won’t feel comfortable buying an EV until they have adequate access to public chargers to avoid getting stranded on the road. But cities don’t currently have enough money to incentivise wide scale adoption by constructing ubiquitous charging stations throughout downtowns, in neighborhoods and along highways.

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Chattanooga’s city-owned energy and telecom utility gives it the bandwidth and stability to support an EV network. The city in 2022 received a $4.5 million federal grant to create a smart charging network that would provide personalized data that can link electric vehicle users to available charging stations.

It was also one of the first in the nation to launch an electric-vehicle ride-sharing program where drivers can rent a Nissan Leaf for $45 a day.

And Chattanooga is home to a Volkswagen plant where ID.4 SUV models started rolling off the production line last year. The German company has invested $800 million into electrifying the factory and has received hundreds of millions of dollars in incentives from federal, state and local governments.

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Columbia’s (South Carolina) leaders are preoccupied with improving the reliability of the city’s electric grid, which Mayor Daniel Rickenmann said is not currently in a state to support a surge in EVs.

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Mayors shared fears that EVs could become yet another policy area where rural communities are left behind while big cities absorb all the benefits. READ MORE

Excerpt from Business Insider: Electric car shoppers are increasingly fickle, dealers told Insider; The slowdown in EV demand might be worse than car companies think; EVs are still too expensive for the average shopper, dealers said.

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Now, electric car shoppers are more fickle. More and more often, they are comparison shopping EVs against hybrid and gas-powered vehicles, dealers said.

That's leading dealers to use more aggressive sales tactics on plug-ins. They warn this could make EV demand appear more robust than reality, and make it harder for car manufacturers to predict demand.

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This warning bell from dealers is the latest sign that after years of exponential growth, the electric car segment is facing a looming plateau. Already, car companies seem to be reacting to changes in demand, after overshooting their EV predictions for this year.

After hovering for years around 1% of the total US car market, EV sales have been on a tear since 2019. Last year, the segment hit a record of 300,000 units sold and EVs accounted for 9% of all sales through September of this year.

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"We had a hundred-plus reservations (for the Ford F150 Lightning), and ultimately those were people that only committed a hundred dollar reservation," Johnson (Cameron Johnson, CEO of Magic City Auto Group in Virginia) told Insider. "By the time it was their turn to order interest rates had moved quite substantially. The price on the vehicle had moved quite substantially and not as many people ultimately ordered the Lightning." READ MORE

Excerpt from Politico Nightly: Stellantis CEO Carlos Tavares raised eyebrows last week when he told reporters he was prepared to adjust his company’s electric vehicle strategy if the political tides turn against EVs ahead of key ballots in 2024 on both sides of the Atlantic.

“There are two important elections next year — the European Parliament elections in June and the U.S. elections in November. It could be that politics will be different then,” Tavares told Automotive News affiliate Automobilwoche on the sidelines of a press conference at the Mirafiori plant in Turin.

Stellantis — the parent company of Chrysler — may have to change its strategy “if political and public opinion tends toward fewer EVs,” he said.

President Joe Biden’s reelection is among the most important variables. He has made the transition to electric vehicles a personal crusade, directing billions in two of his most significant legislative achievements to build EV chargers and help subsidize the cost of new electric vehicles — policies that could face resistance if a Republican wins the White House in 2024.

In Europe, parliamentary contests across multiple countries stand to shape the debate. A ban on the sale of all but zero-emission cars and vans is already in place from 2035 onwards, with regulatory pressure also piled on automakers to start selling increasing numbers of EVs now as the phase out date approaches.

But even with the law already on the books covering hulking carmaking states such as Germany, France and Italy, a different political constellation in Brussels could review the rules in the next political term.

Closer to home, it would be hard for Republicans to fully unwind the popular Inflation Reduction Act, Biden’s signature climate law, with its $7.5 billion tax incentives for buying an EV. But that tax credit is already hobbled by the law’s strict rules aimed at wresting the EV supply chain away from China. Rules that took effect in March narrowed the field of eligible vehicles down to just 1 in 5, and another tranche of rules that just came out will narrow it further.

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But the nascency of the process of building out the nation’s charging network still makes it vulnerable.

Over in Europe, automakers also say the process of getting charging infrastructure installed across the bloc’s roads is patchy at best — with huge discrepancies between rich and poor countries.

For example, while the Netherlands has 64 chargers per 100 kilometers of road, some six countries have fewer than a single charger over the same distance and 17 have fewer than five.

This mismatch between pressure to sell clean cars to meet climate targets and the perceived lack of adequate supporting infrastructure raises the prospect of a serious review of the EU’s 2035 rule when it comes up for review in 2026, after next year’s election cycle.

Though that possibility is rejected by politicians today, it’s made all the more likely by a steep decline in the political fortunes of Europe’s Greens, especially in countries such as Germany where the party governs in a three-way coalition.

Of course, just as the elections could impact EVs, the politics of EVs could impact the elections.

Biden’s use of taxpayer dollars to subsidize expensive cars for the upper-middle classes in service to a “green revolution” conservatives love to mock is a useful GOP talking point — especially in an increasingly populist Republican Party. Then again, EV battery plants creating jobs all over the Sun Belt is bringing even doubters into the EV fray. READ MORE