When President Joe Biden announced in the White House August 5 that he wants half of all cars and trucks sold in the United States to be Electric Vehicles (EV) by 2030, the loudest applause may well have been in Beijing.
Biden told an assembly of labor and political leaders as well as top executives from General Motors, Ford and Stellantis N.V. — which owns Chrysler, Dodge and Ram — that he signed “an executive order setting out a target of 50 percent of all passenger vehicles sold by 2030 will be electric and set into motion an all-out effort.”
The order also directs creation of a national infrastructure of 500,000 charging stations to service the projected boom in electricity demand for EVs and expanded federal tax credits as purchase incentives for consumers. Biden also wants huge increases in federal spending on research to develop new battery designs that can be made in America.
Finally, he directed the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) to raise federal fuel economy standards for the internal combustion-engined cars and trucks that now make up 96 percent of the vehicles on the nation’s streets and highways.
All told, according to a White House Fact Sheet, “today’s announcements would put us on track to reduce greenhouse gas emissions from new passenger vehicle sales by more than 60 percent in 2030, compared to vehicles sold last year, and facilitate achieving the President’s goal of 50-52 percent net economy-wide greenhouse gas emission reductions below 2005 levels in 2030.”
It’s an ambitious agenda, but there are at least two huge obstacles to its achievement, one of which Biden alluded to at the White House ceremony and the other he studiously ignored.
China is the obstacle Biden had to acknowledge, briefly, by noting that, “right now, China is leading the race, and is one of the largest and fastest-growing electric vehicle markets in the world.
“And a key part of the electric vehicle—to state the obvious—is the battery. And right now, 80 percent of the manufacturing capacity for these batteries is done in China.”
But market and energy industry experts describe a problem that far exceeds in scope Biden’s admission of China’s dominance of manufacturing capacity for the lithium-ion batteries that are the essential piece in making EVs viable as a possible paradigm changer for the auto industry.
“China consumes as much industrial metals and battery minerals as the rest of the world combined,” according to mining.com. “Chinese direct investment overseas in mines and projects topped $1 billion in 2017 for the first time and peaked in 2019 at nearly $2.2 billion with cobalt and lithium its favorite targets.”
Cobalt and lithium are crucial to EV battery production, so those investments are reflected in the fact “China has a stranglehold on the electric vehicle supply chain with chemical processors and refiners responsible for 82 percent and 60 percent of midstream production of cobalt and lithium, respectively,” according to mining.com.
“China’s control of refining is north of 80 percent, makes cobalt a particular headache for automakers,” mining.com continued. As The Epoch Times has previously reported, Cobalt production also poses a child-labor dilemma for EV battery production.
China dominates EV battery production, so Biden’s efforts to boost EV sales in the U.S. necessarily will mean more exports and income for Beijing at the outset and quite possibly for many years thereafter.
One of the auto executives listening to Biden at the White House was GM Chairman Mary Barra, who, along with Ford President and Chief Executive Officer Jim Farley, and Stellantis N.V. Chief Operating Officer Mark Stewart, are committed to raising EVs to 40-50 percent of their firms’ total sales by 2030.
Biden’s goal of displacing China as the world’s top EV battery-maker puts Barra in an especially difficult position because GM sells more vehicles in China (2.9 million in 2020) than it does in the United States (2.5 million).
And there’s Ultium, GM’s advanced EV battery system, which the firm said recently is central to its strategy of moving to “an all-electric and intelligent future.”
The new battery, which is to be built in Ohio, is still based on a lithium-ion design, so production will remain dependent upon China in crucial respects for the immediate future. With GM also so dependent upon sales in China, Beijing has immense leverage over GM and isn’t likely to free it from that dependence any time soon.
The second obstacle to Biden’s plan is U.S. consumers, who, despite two decades of hyping the “EV future” by government, mainstream media, and corporate public relations operations, remain far from enthusiastic about re-charging their cars and trucks instead of refueling them.
Sales of EVs in July reached a mere 2.7 percent of all units sold in the United States, according to the Alliance for Automotive Innovation (AAI), the auto industry’s trade association in Washington, D.C.
Even when combined with sales of hybrids, which combine electric and internal combustion power, Zero Emission Vehicles (ZEVs) account for only four percent of nationwide sales, or about 560,000 out of nearly 15 million units sold.
The turning point for the “EV future” may well be a vehicle Biden praised during his Thursday remarks. He called Ford’s upcoming all-electric F-150 “incredible.”
The gas- and diesel-powered versions of Ford’s F-Series trucks have been the best-selling vehicle in the United States for 44 straight years, so how buyers react to the all-electric F-150 will be crucial to the EV future.
Congressional correspondent Mark Tapscott may be contacted at: [email protected]. Follow him on Twitter at @mtapscott and on Parler at @Mtapscott.