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Combustion Engine Bans Won’t Make More EVs

Thanks to the pandemic and pandemic policies, supply chain crunches, and sanctions on Putin, the globe is experiencing record gas prices. This should be a teachable moment for how diversified supplies and domestic production achieve energy security. Instead, energy instability has become a cudgel with which governments can beat combustion engines. Transport Secretary Pete Buttigieg suggested struggling families should just buy an electric car to avoid high gas prices. Joe Biden said the same: the EVs will save families $80 on gas a month. Former chief economist at the World Bank, Baron Nicholas Stern, went a step further: calling for a global ban on combustion engine vehicles. But supply-chain issues concerning metals and rare minerals, scarce charging infrastructure, and China’s manufacturing dominance mean petroleum will remain the primary transport fuel source until 2038. Blanket bans on gas cars won’t work economically or environmentally. Only cost-competitive, market-enabling, policies will get more Americans behind the wheel of EVs.

>>>READ: Free Market Reforms Can Put More EVs on the Road

The US has 280 million registered vehicles as of 2021. Ninety-one percent of Americans drive to work in personal vehicles. Despite suggestions made by European politicians that big cities can subsist on private transport alone, many States remain rural and navigable only by car. Though Biden would like EVs to be fifty percent of all car sales by 2030, electric cars comprise only four percent of annual sales currently in the US. Consumer demand means Teslas are $47,000 minimum. Additional forty-one-year record inflationary pressures, caused by the administration’s unprecedented $120 billion in monthly quantitative easing, make upgrading to EVs unaffordable at this time.

The Biden administration’s preferred method of easing the cost of EVs for Americans has been a subsidy programme. Subsidies account for eighteen percent of vehicle costs. Biden’s Build Back Better Act also included rebates for purchasing EVs of up to $12,500. $4500 of that potential $12,500 rebate would be given for purchasing union-made EVs. This distinction put leading producers like Tesla, Toyota, and Honda (all of which have factories making EVs in the U.S) at a competitive disadvantage to Ford and General Motors. This will be passed off onto consumers in increased costs, and slow innovation in the sector. Ninety percent of electric car credits went to the top ten percent of America’s earners — widening the chasm of EV affordability between the wealthy who already own one EV, and those disproportionately impacted by the gas price rise. Also, as Elon Musk has criticised, Biden playing favourites with unions also undermines American manufacturers: as Ford produces their electric cars in Mexico.

If this rebate dropped its union-based discrepancies, and were made a broader-based supply side tax cut, then prices would be reduced for consumers without capital needing to be taken and redistributed as tax revenue. That way less revenue would be lost on the bureaucracy to assess applications and allocate payments as part of a scheme. The ceiling for EV ownership would be lowered, and made more accessible to the low-income families most likely to be hit by inflation and cost associated with a net zero transition. This would likely attract bipartisan support from Republicans equally as concerned about conservation as balancing the ever-bloating budget.

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There are also infrastructure-related roadblocks to EV adoption. The Build Back Better Act promised $7.5 billion to installing EV 500,000 chargers by 2030; $42.5 billion short of industry projected figures. Population concentration necessitates a local, rather than federal, approach. Rurally dispersed communities will find it harder to access EV chargers outside their households. Inversely, built-up cities will see occupants of high-rise apartments competing for parking spots with charger access. Attracting investment for upgrading charging infrastructure should be done on a state-by-state needs basis. An application system, based on the Opportunity Zones application model, could aid in processing and prioritising EV charger rollout by location.

Finally, manufacturing hurdles must be overcome. As with many made-in-America goods, domestic EV production has the potential to reduce emissions within the supply chain by up to eighty percent. However, EVs require six times the minerals as combustion engine vehicles. China controls more than a third of the world’s precious metal deposits, and eighty percent of annual global battery production. For this reason, China makes more EVs than any other country

As explained in a previous article, the West should win the space race for asteroid mining if we are to avoid relying on our enemies’ resource monopiles to decarbonise. By laying down a legal framework for extending property rights beyond Earth’s atmosphere, America could empower the private sector to commercialise spaceflight. Meanwhile, back down on Earth, the West should leverage free trade incentives to crack the Chinese sphere of influence which has captured these key resources. The deep sea may also hold the key to metals for EVs: with trillions of metallic nodules ripe for mining in our equally-unexplored ocean depths. A robust legal framework of property rights must be set up, as with space, to ensure our seas are not excessively plundered for their invaluable resources.

>>>READ: Reduce Mining Regulations to Accelerate a Cleaner Energy Future

In the meantime, if EV production and charging infrastructure cannot be rolled out fast enough to meet decarbonising date deadlines, there are calls to ration energy consumption and implement consumer carbon credits. However, we are already experiencing how pandemic policies produced inflation, a halt in goods production, and supply-chain disruptions worldwide. Every unaccounted-for error in a ban or mandate has a human cost: be it colder homes, empty store shelves, or unnecessary deaths. Therefore, innovation and infrastructural development must rise to the occasion to meet consumer demand. Consumption should not be constricted to accommodate the insufficiencies of ideologically-driven government policies. Consumer choice must remain paramount if an economic transition toward sustainable consumption habits is to be conducted without needless suffering.

Until innovations into extraction techniques, or the billionaire space-race makes asteroid mining a reality, transport will rely on gas and electricity in equal measure. It is of paramount importance, then, that purchasing power, not punitive policies, keep the market moving.

Connor Tomlinson is the Head of Research for the British Conservation Alliance and a political commentator for Young Voices UK. He appears regularly in American Spectator and on talkRadio. Follow him on Twitter: @Con_Tomlinson

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

Copyright © 2020 Conservative Coalition for Climate Solutions

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