Opinion: How Electric Vehicles Can Make Everyone Happy
Ending subsidies, mandates and tariffs would expand use of EVs while letting people continue driving the cars they want.


WSJ
One of the first things you learn about in an economics course is the concept of trade-offs: You can’t have everything you want. This is relevant in the debate about electric vehicles. U.S. auto workers want to keep their jobs. Most U.S. drivers still prefer cars with internal combustion engines. Environmentalists want Americans to buy EVs. And free traders want, well, free trade. Something’s got to give.

Or does it? There’s a path that would enable each party to achieve many of its objectives. First, end mandates and subsidies for EVs. Second, eliminate President Biden’s 100% tariff on EVs from China and allow duty-free imports. Free trade would give lower- and middle-income Americans the chance to buy relatively cheap imported EVs. More people driving EVs would make environmentalists happy. And ending mandates and subsidies would allow U.S. automakers to do what they do best: make cars with internal combustion engines. That in turn would keep U.S. auto workers employed and able to continue using their specific skills.

If we stick to our current policy path, none of these goals is attainable. For one, environmentalists can’t achieve their aims. The Environmental Protection Agency estimates that 56% of new cars would need to be EVs by 2032 to meet the agency’s emissions goals. Even with subsidies and California-style mandates, meeting that benchmark is unrealistic. According to the Energy Department, EVs and hybrids combined made up only 9.1% of all light-duty vehicles sold last year. According to the Energy Information Administration, only 1.2% of light-duty vehicles on the road in 2022 were EVs or plug-in hybrids.

There are three reasons it’s unrealistic to expect more than half of new cars sold to be EVs. First, EVs are expensive. A new EV sold in the U.S. is priced, on average, at just over $50,000, more than most drivers are willing or able to pay. Second, people are rightly worried about driving an EV a long distance and being able to reach a charging station that recharges the car quickly. Third, when temperatures fall below freezing—which happens often in much of the U.S.—it takes significantly longer to charge an EV.

It’s unlikely that within the next 10 years EVs will make up more than 25% of all cars sold annually. But we could likely come much closer to hitting the 25% mark in a few years, with no subsidies or mandates, simply by pursuing free trade, which would lower the first of the three barriers: cost. BYD, a Chinese manufacturer, offers some EV models that cost less than $20,000—significantly cheaper than U.S.-made EVs.

If the U.S. makes EVs more accessible and affordable by welcoming duty-free imports, environmentalists will be closer to achieving their goal of getting more EVs on the road, consumers who want to buy EVs will be able to do so more easily, and automakers can focus on making cars with internal combustion engines, which would support auto workers’ jobs.

So let’s get rid of mandates, subsidies and tariffs. There’s no perfect trade-off, but some are better than others.



Mr. Henderson is a research fellow with Stanford University’s Hoover Institution. He was senior economist for energy with President Reagan’s Council of Economic Advisers.

rfenst wrote:

I just found it an interesting economics topic for both sides of the discussion here?

rfenst wrote:

Anthony, post 1401. This reminds me of an ordinance they enacted in Tokyo, Japan. Basically, the large tractor type trucks with the old “dirty” diesel engines were and still are prohibited from entering Tokyo. I think they implemented this ordinance in Osaka and a few other places. They implemented electric bus mass transit. The city was noticeably changed for the better. The air was more fresh and the buildings gradually became cleaner.

jeebling wrote:

Opinion: How Electric Vehicles Can Make Everyone Happy
Ending subsidies, mandates and tariffs would expand use of EVs while letting people continue driving the cars they want.


WSJ
One of the first things you learn about in an economics course is the concept of trade-offs: You can’t have everything you want. This is relevant in the debate about electric vehicles. U.S. auto workers want to keep their jobs. Most U.S. drivers still prefer cars with internal combustion engines. Environmentalists want Americans to buy EVs. And free traders want, well, free trade. Something’s got to give.

Or does it? There’s a path that would enable each party to achieve many of its objectives. First, end mandates and subsidies for EVs. Second, eliminate President Biden’s 100% tariff on EVs from China and allow duty-free imports. Free trade would give lower- and middle-income Americans the chance to buy relatively cheap imported EVs. More people driving EVs would make environmentalists happy. And ending mandates and subsidies would allow U.S. automakers to do what they do best: make cars with internal combustion engines. That in turn would keep U.S. auto workers employed and able to continue using their specific skills.

If we stick to our current policy path, none of these goals is attainable. For one, environmentalists can’t achieve their aims. The Environmental Protection Agency estimates that 56% of new cars would need to be EVs by 2032 to meet the agency’s emissions goals. Even with subsidies and California-style mandates, meeting that benchmark is unrealistic. According to the Energy Department, EVs and hybrids combined made up only 9.1% of all light-duty vehicles sold last year. According to the Energy Information Administration, only 1.2% of light-duty vehicles on the road in 2022 were EVs or plug-in hybrids.

There are three reasons it’s unrealistic to expect more than half of new cars sold to be EVs. First, EVs are expensive. A new EV sold in the U.S. is priced, on average, at just over $50,000, more than most drivers are willing or able to pay. Second, people are rightly worried about driving an EV a long distance and being able to reach a charging station that recharges the car quickly. Third, when temperatures fall below freezing—which happens often in much of the U.S.—it takes significantly longer to charge an EV.

It’s unlikely that within the next 10 years EVs will make up more than 25% of all cars sold annually. But we could likely come much closer to hitting the 25% mark in a few years, with no subsidies or mandates, simply by pursuing free trade, which would lower the first of the three barriers: cost. BYD, a Chinese manufacturer, offers some EV models that cost less than $20,000—significantly cheaper than U.S.-made EVs.

If the U.S. makes EVs more accessible and affordable by welcoming duty-free imports, environmentalists will be closer to achieving their goal of getting more EVs on the road, consumers who want to buy EVs will be able to do so more easily, and automakers can focus on making cars with internal combustion engines, which would support auto workers’ jobs.

So let’s get rid of mandates, subsidies and tariffs. There’s no perfect trade-off, but some are better than others.



Mr. Henderson is a research fellow with Stanford University’s Hoover Institution. He was senior economist for energy with President Reagan’s Council of Economic Advisers.

rfenst wrote:

Make a basic EV with no power anything other than power steering. Make a small, medium, large, a minivan, a SUV, and a pickup. One color only, no options. A much lighter vehicle will travel farther. This would reduce the cost by over 50% in my opinion. Insted of a stereo an I pod to download lists into. Of course air conditioning, automatic transmission, saftey, and such. Use safe materials that cut as much expense as possible. Go to a fully automated AI plant with facility technicians for repair/trouble shooting. No chrome, just single color, no fancy wheels. Go vertical supply chain so there are no additional production costs due to proffet. Online sales only, set price no negotiations, no trade in, fob pick up. As much as possible in supply chain use ship and railroad for transportation. Ideally no over road hauling at all. IMHO this would allow building of the world's least expensive EV'S. Many people want transportation to get from a to b. As far as charging when not at home set up 2 phase 220V, not as quick as the best system, fast none the less. Set the chargers to charge to 80%, no electronics on the vehicle to do this. Make it so simple a shade tree mechanic can make repairs with a Chiltons like manual provided with the vehicle. No up charges or hidden charges. A 90 day warranty. 1 offered extended warranty. No financing offered. Perhaps a bit more, this is just off the top of my head.

Speyside2 wrote:

It’s all about clean air standards. No need to mandate a vehicle type to achieve clean air. Simply set ppm thresholds and the markets will react accordingly.

Abrignac wrote:

Agreed that mandates should be about emissions. And we do have emission standards now for the betterment of us all.

Yet - Many Americans will always fight any mandate that restricts their "right" to do whatever they want to - "screw the environment". Some kids spend good money messing up their ride so the can "roll coal" just to coat the streets with "liberal tears".

EV's are pretty harmless. And the minimal mandates that have been proposed are pretty harmless as well. Yet, just look at the self righteous indignation and outright lies. Makes you wonder about who we are...

Brewha wrote:

I firmly believe that Musk will shed Tesla and quite possibly X.

There's NOBODY doing what SpaceX is doing with the quality that they're doing it with.

Just remember, "Who is John Galt?"

If you haven't read "Atlas Shrugged", you should so you can figure out what lies in America's near future. In some instances, it's already happening.

DrMaddVibe wrote: