Electric Vehicles

EVANSVILLE, Ind. (WEHT)– Climate change, something representatives with Indiana University said could pose a threat to the world we live in if no steps are taken to tackle it.

“We will have coastal areas in the United States inendated by sea level rise. We will have increased incidents of disasters like hurricanes, wildfires, it will be a very challenging world to live in,” environmental economics and policy assistant professor Nikos Zirogiannis said.

President Biden announced Thursday plans that could help it. These plans include working with car manufacturers to get more electric-style vehicles on the roads, with a goal of having these vehicles make up half of car sales by 2030.

“But it’s not enough to address climate change. What is equally important is making sure that the electricity that fuels those electric vehicles is produced through renewable sources,” Zirogiannis said.

Altogether, Zirogiannis said it’s an ambitious goal, but could be doable. Eyewitness News spoke to general sales manager with D-Patrick, Tony Ricketts, about electric vehicles in the tristate.

“I don’t know if we’ll see fifty percent in the next ten years or not but we’re definitely seeing an increase in demand for electric vehicles,” Ricketts said.

Zirogiannis said there is another component that needs to be tackled to ensure this electric vehicle goal goes according to plan.

“They need to ensure that there are enough recharging stations,” he said.

Ricketts said he’s noticing an increase in charging stations across the board, and said these stations help people driving these cars.

“We have a lot of customers that aren’t just commuting fifty miles a day but might commute one hundred or two hundred miles in a given time and they need that reliance of being able to go further,” he said.

LOS ANGELES (CBSLA) – Following President Joe Biden’s executive order to set the U.S. on a path to have half of all new vehicles purchased by 2030 be electric, a motion was introduced in the Los Angeles City Council Friday to create a master plan for electric vehicle infrastructure citywide.

“Meeting our climate goals in less than 14 years requires urgent action and a broad-based approach,” said Councilman Mitch O’Farrell, who co-introduced the motion and serves as chair of the Energy, Climate Change, Environmental Justice, and River Committee.

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“We have a golden opportunity to work with the Biden administration on our shared objectives for a sustainable and clean energy future. The sooner we transition to all-electric vehicles, the sooner we clean the air in Los Angeles, mindful that this region still has the nation’s worst air quality. For that reason, incentivizing electric vehicle use in Los Angeles is arguably our top environmental priority.”

The motion, if passed by the City Council, would instruct the Los Angeles Department of Water and Power to lead in the creation of a citywide Electric Vehicle Master Plan, which would include provisions to maximize federal and state funding to ensure that electric vehicle infrastructure is equitably placed across Los Angeles.

“The city’s Green New Deal has already established ambitious targets for carbon neutrality, including converting all city fleet vehicles to zero emissions by 2028 and installing 28,000 publicly available EV chargers by the end of this decade,” said Councilman Paul Krekorian, who co-introduced the motion. “The development of a bold plan to increase electric vehicle use across the city is another essential component of the battle against climate change. I look forward to working with the Los Angeles Department of Water and Power — our partners in LA100 — and city agencies in this effort.”

The LADWP’s mater plan would also include incentives for residential, commercial and industrial customers to add electric vehicle chargers.

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The department welcomed the motion, and noted progress already being made to enhance electric vehicle infrastructure and increase access in disadvantaged communities through the Charge Up L.A. EV rebate program.

“The Department of Water and Power looks forward to being a full partner in the effort to create an electric vehicle master plan to build an even more sustainable city,” said LADWP General Manager and Chief Engineer Martin L. Adams.

Los Angeles passed its own Green New Deal in 2019, and by 2020, surpassed its goal of installing 10,000 commercial electric vehicle chargers throughout the city, two years earlier than the timeline in the Green New Deal.

In 2021, the city has about 11,045 commercial charging stations and is on track to reach 25,000 by 2025 and 28,000 by 2028.

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(© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)

NORTH MANKATO — A legislative forum on climate and energy issues Friday showed bipartisan support for biofuels and ethanol but a deep divide when it comes to the state’s new clean car standards and promotion of more solar.

Gov. Tim Walz, through the Minnesota Pollution Control Agency, instituted new Clean Cars rules that require manufacturers and dealers to meet higher fuel economy standards, which will effectively require that more electric vehicles are sold. The rules are based on a California program.

Rep. Jeremy Munson, R-Lake Crystal, said the rules don’t make sense here, noting California’s top sellers are smaller cars. 

“The No. 1 seller is the Ford F150 (pickup) in Minnesota. We drive different vehicles than in California.

“I think people are concerned about losing choice, losing options.” 

Sen. Sen. Nick Frentz, DFL-North Mankato, said he understands many people don’t like California policies in general but noted that 14 other states have adopted the same clean car standards. And he also said he understands some people just don’t like change.

“Nobody likes government mandates, but it is in the public interest. At a certain point, you have to take the stand.

“It doesn’t require anyone to buy an electric vehicle; it just makes more of them available,” Frentz said.

He predicts that by the time the rules take effect in 2025, there will be no opposition or talk about the rules as electric vehicles, including pickups, continue to improve and demand by consumers grows.

Rep. Susan Akland, R-St. Peter, said the rules put too much burden on auto dealers.

“Dealers say they will be required to have a certain number of electric vehicles and they won’t sell them. They’re not happy. Let the market decide electric vehicles,” she said.

Rep. Luke Frederick, DFL-Mankato, said the rules are a necessary push for what is coming and what is needed to move away from burning fossil fuels.

“Over the course of the next 10 to 20 years, electric vehicles are going to take over. It’s how the private sector works and what consumers want.”

Frederick said it’s important for the state to continue to help get more electric charging stations installed across the state.

The legislators, including Sen. David Senjem, R-Rochester, spoke in person or via Zoom at the forum in North Mankato, sponsored by the Southern Minnesota Clean Energy Council.

One of the most contentious differences arose over the issue of whether state programs subsidizing solar panels and electric vehicles support countries that use slave labor to mine for cobalt, lithium and nickel as well as other rare earth metals to make lithium batteries and solar panels.

Munson last legislative session introduced an amendment to ban the use of slave labor in Africa and South America mining operations for use in solar panels for schools but said Democrats defeated the measure

Frentz and Frederick said everyone opposes slave labor and abuse of workers, but said Munson and other Republicans only push the issue because they oppose state rules and subsidies that support solar and electric vehicles.

“To just focus it on solar panels is disingenuous,” Frederick said. “It in no way makes an impact on labor violations overall. The metals going into solar panels are the same metals being put in everyone’s cellphones and a lot of other things.” 

Frentz said pushing to end human rights abuses is important but noted Republicans aren’t calling for the end of the import of Nike shoes or other products that critics say are produced with child or slave labor. 

“Don’t just make a labor violation effort related to (clean energy). Make it on everything,” Frentz told Munson.

Munson said it’s a legitimate issue. “I don’t think I need to defend my opposition of slavery.”

He said there is a small amount of cobalt in his cellphone and other products, but he chose to purchase them himself. Subsidizing solar and EV are different, he said.

“We are taking money from Minnesotans and sending it to slave owners. The government doesn’t pay for Nike’s,” Munson said.

And he said the tiny battery in his cellphone doesn’t compare to large lithium batteries on electric vehicles.

Senjem stressed that both parties want to move ahead with clean energy initiatives but said Republicans are less interested in pushing big, quick changes from the state as reliance on fossil fuels will continue for many years.

“There’s nowhere near enough renewable power on the system,” he said.

Senjem said the GOP wants incremental approaches to bring more clean energy into the system over the next 10 to 30 years.

Frentz said bolder action is needed to rein in problems of climate change. He noted that in 2007 a bipartisan bill, signed by Republican Gov. Tim Pawlenty, required the state to reduce greenhouse gas emissions by 80% between 2005 and 2050,

“Now in 2021 we’re only at 8% reduction.”

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What a spectacle. We’re referring to the political advertisement that auto makers staged with President Biden on Thursday endorsing the Administration’s stricter fuel-economy rules and climate agenda. Behold Big Business colluding with Big Government to grab subsidies and raise consumer prices.

The White House previewed the electric-vehicle promo with joint statements from auto makers, the United Auto Workers and California Gov. Gavin Newsom. Ford , GM and Stellantis (formerly Fiat Chrysler ) announced their “shared aspiration” for electric cars to make up 40% to 50% of their sales in 2030. EVs make up a mere 3% of current U.S. sales, and most are Teslas.

“This represents a dramatic shift from the U.S. market today that can be achieved only with the timely deployment of the full suite of electrification policies committed to by the Administration,” including government incentives for consumers, charging stations and battery manufacturing, Detroit’s auto makers said. For “incentives,” read subsidies.

BMW , Ford, Honda , Volkswagen and Volvo seconded the need for “bold action from our partners in the federal government.” Politicians as partners? The five auto makers previously struck a deal with California to reduce their greenhouse gas emissions after the Trump Administration eased the Obama corporate average fuel-economy (Cafe) standards.

The Biden Administration is adopting the California deal as the framework for its revised Cafe rules from 2023 to 2026. The mileage mandate will increase by 10% in 2023 from the existing standards in 2022 and then by 5% each year through 2026 to 52 miles per gallon by 2026. They will also earn extra regulatory credits for producing more EVs.

Today, President Joe Biden signed an executive order that will push automakers to have 50 percent of all vehicles sold come equipped with plug-in hybrid, battery electric or fuel cell powertrains by 2030. Developed with the input of automakers and the United Auto Workers union, the framework follows the laws and guidelines already in place in California and seeks to build on them.

The order extends to light-, medium- and heavy-duty vehicles. Traditional hybrids and newer mild-hybrid technology are not counted.

Separately, President Biden will direct the Environmental Protection Agency (EPA) and the U.S. Department of Transportation to change the rollbacks of Corporate Average Fuel Economy (CAFE) standards that were set into motion by the Trump Administration.

Those proposed rules will then be available for public comment.

In response to the move by the Biden Administration the Alliance for Automotive Innovation, a mobility industry trade association and lobby group, issued a statement of support that says that manufacturers are committed to a future of net-zero carbon transportation.

“This upcoming rulemaking for light-duty auto standards is a chance to realign the auto industry in preparation for greatly expanding electrification of the fleet and rapidly decreasing GHG emission after 2026.”

According to the group, the automotive industry plans to have invested $330 billion in electrification by 2025. With more than 50 electric vehicle models on the market today, IHS Markit predicts that that number will expand to 130 by 2026.

With battery innovation and evolution, and new electric-powered vehicles on the horizon, the new standards and fresh direction of the government agencies will allow automakers to have government support for their products, a move that aims to push consumers into quickly adopting the advanced powertrain options that are coming to market to replace less efficient variants.

EV adoption in other countries has been successfully hastened through a series of regulatory measures and action to limit areas of the country where internal combustion engined vehicles can travel.

Current CAFE standards are 46.1 mpg for passenger cars and 32.6 mpg for light duty trucks. Those standards are set to gradually increase to 55.3 mpg and 39.3 mpg, respectively, by 2025.

Most manufacturers have failed to meet those standards intended to curb greenhouse gas emissions for the last five years. Of the major automakers that are tracked, only Volvo, Subaru, Tesla, Aston Martin and Honda ended 2019 under the suggested level.

In its 2020 Automotive Trends report, the EPA said that 11 of the 14 manufacturers tracked were able to increase fuel economy thanks to product innovation, consumer preferences and other market factors.

General Motors, Ford and Mazda all increased their new vehicle carbon emissions rates. Despite this, those three manufacturers ended the year in compliance by utilizing the EPA’s averaging, banking and trading program for greenhouse gas emissions, which allows companies to trade credits to regain compliance.

In a December 2020 survey released by Consumer Reports, 71 percent of American adults with a valid driver’s license said that they would be interested in purchasing an EV at some point. Thirty-one percent responded saying that they would consider an EV for their next vehicle purchase.

The adoption barriers that drivers most commonly cited was the desire for more varieties of EVs and more consumer-friendly charging stations, as well as added government investment in EV infrastructure.

The Biden Administration plans to make a significant investments as part of its proposed $1.2 billion infrastructure plan. Currently, $7.5 billion is earmarked for funding EV charging stations. Another $6 billion is intended to help factories make the adjustment to electrification.

Consumers have also expressed worries about how far they can go on a single charge. Dubbed “range anxiety,” the consumer intelligence firm J.D. Power found in a January 2021 study with PlugShare that drivers were concerned with that distance even after purchasing an EV. Accuracy of the stated battery range versus the actual battery range accounted for 20 percent of owners’ overall satisfaction.

Currently, Tesla advertises a range of 396 miles for its Model S, the highest on the market. Beyond Tesla, Ford says its most efficient Mustang Mach-E has a 305-mile range. Automakers have said that powertrains in the near future will best those marks pushing range to over 400 miles per charge.

Among the big automakers, the EPA’s 2020 report lists Honda as the best when it came to average fleet fuel efficiency in 2019 with 28.9 mpg. Hyundai and Subaru follow with 28.5 and 28.4, respectively. Honda is projected to remain in the top spot when the 2021 report is published.

In July, the nonprofit American Council for an Energy-Efficient Economy argued that CAFE standards would need to be reach 55 mpg by 2026 in order to reverse the increased emissions released as a result of the Trump Administration’s rollback.

Automakers are already engineering efficient future vehicles that are powered by more robust batteries and cut through the wind with added ease, a move likely to increase fuel efficiency if the changes are enough to offset the added weight of the large powertrain battery.

In reaction to the executive order and subsequent agency charges, the Environmental Protection Network, a lobbying firm dedicated to resetting the course of the EPA, issued a statement praising the administration’s actions.

“The proposal announced today by the administration recaptures most of the pollution reductions that were lost under the Trump administration’s senseless rollback that was finalized last year,” former EPA official Jeff Alston said in the statement. “I’m also pleased to see U.S. automakers support EV sales targets for 2030 and trust that they will support future standards consistent with these targets.”

Text size

President Biden wants half of all new car sales in America to be electric by the end of the decade. It’s a bold goal—and it won’t be easy. It will require a lot of lithium, batteries, EV charging, and EV manufacturing capacity. Most important, it will require billions and billions of dollars.

Wednesday, the White House announced plans for Biden to sign an executive order supporting his goals of boosting the U.S. EV business. “The President believes it is time for the U.S. to lead in electric vehicle manufacturing, infrastructure, and innovation,” reads the news release.

It’s a tall order. There are only about 2 million EVs on U.S. roads today, and only about 2% of all cars sold in 2020 were all-electric. That works out to roughly 250,000 out of 16 million light vehicles. What’s more,

General Motors

(ticker: GM) delivered 1.3 million cars in the U.S. during the first half of 2021, and only 20,300 were EVs, just 1.6%.

GM, of course, has already announced plans to invest $35 billion in EV development between 2020 and 2025, which includes about $8 billion for battery capacity. That is supposed to result in 1 million EV sales a year, giving investors a useful rule of thumb.

If one million EVs need $8 billion of battery capacity, then 8 million EVs—about 50% of U.S. annual light vehicle sales—will require $64 billion.

And that’s just the battery capacity. Auto makers have to engineer and assemble the EVs too. Estimating capacity costs is a little harder because car plants have to be maintained and updated continuously.

Ford Motor

(F) spends roughly $5 billion to $7 billion a year maintaining and updating its 5 million to 6 million car assembly capacity. But

Tesla

(TSLA) has spent roughly $5 billion over the past few years installing about 1.5 million units of brand new EV capacity in Shanghai, Germany, and Texas—call it $3 billion for 1 million in assembly capacity. That means an additional $22 billion will need to be spent to increase and retool automotive capacity.

Then there is charging infrastructure. There are 150,000 gas stations in America and only a few thousand fast-charging stations. Of course, people plug EVs in at home, but they still need to be able to charge up while on the road. The fastest chargers cost about $100,000 each, according to Arcady Sosinov, CEO of FreeWire, which builds charging equipment with battery backup that doesn’t require complicated utility hookups. That price doesn’t include installation. To get to, say, 50,000 fast-charging stations might require another $10 billion.

That’s almost $100 billion in spending over the next nine years—in the U.S. alone—to have the capacity to build enough cars and batteries to reach Biden’s goal and to keep the infrastructure to enable their adoption. It’s certainly possible to spend that—there will be many companies, many industries, and many years involved—and that’s good news for EV charging companies such as

ChargePoint

(CHPT) and providers of capital and automation equipment such as

Rockwell Automation

(ROK), among others.

It’s also good for battery makers such as China’s

CATL

(300750.China), which has spent about $3 billion over the past 12 months boosting its capacity as Chinese EV sales expand rapidly. All the largest battery makers in the world are foreign, based in Korea, Japan, and China.

The spending won’t stop there. Batteries need lithium, so the lithium mining industry has to ramp capacity too. In 2020, the world was mining about 400,000 tons of lithium a year, enough to power 2 million to 3 million EVs a year, although only about one-third of global output is destined for cars. Don’t forget phones need batteries too.

If the U.S. is making 8 million EVs and the rest of the world is doing similar things, then the world will need to mine an incremental 5 million tons of lithium a year. It’s a massive 13-fold increase for the industry. That’s means demand growth as far as the eye can see and is good news for miners such as

Albemarle

(ALB). Albemarle is spending about $800 million $900 million a year on maintaining and expanding its operations. Albemarle has a roughly 20% market share of the global lithium mining market. That doesn’t including lithium refining, however, which mainly happens in China.

All this adds up to about 40 billion lithium-ion battery cells for the U.S. by 2030 and, perhaps, 225 billion annually for the globe. It’s a huge number and doesn’t include batteries going into power storage applications for utilities and backup power for consumers.

It’s a massive transition, one that has been enabled by falling battery costs and success from the likes of Tesla. But taking it mainstream will require hundreds of billions of dollars. It’s one of the largest changes in the car business in the last 100-plus years.

For not, stocks aren’t really reacting to the announcement. Tesla is up 1.2% The

S&P 500

and

Dow Jones Industrial Average

are up 0.4% and 0.6%, respectively.

The market doesn’t typically react to 2030 targets set by politicians—but the transition is under way nonetheless.

Write to allen.root@dowjones.com

WASHINGTON—Roughly half of all cars and light trucks sold in the U.S. by 2030 would be electric, hydrogen-fuel cell or plug-in hybrid vehicles under voluntary targets to be announced Thursday by the Biden administration and backed by auto makers contingent on government support.

General Motors Co. , Ford Motor Co. , and Chrysler maker Stellantis NV said their commitment hinges on federal funding for manufacturing and supply-chain research and development, purchase incentives and a national electric-vehicle charging network.

Leaders of those companies and the United Auto Workers are set to attend a White House event Thursday afternoon, where administration officials will also announce tougher fuel-efficiency standards.

The new standard would be a fleetwide average of 52 miles per gallon by 2026, according to a senior administration official. The mark was originally set at 54.5 mpg by mid-decade under the Obama administration, but gradually revised downward and ultimately set at 40 mpg by former President Donald Trump.

The shift to electric vehicles will help auto makers reach those higher fuel-efficiency standards. But in a joint statement, the companies said the voluntary targets for electric-vehicle sales “can be achieved only with the timely deployment of the full suite of electrification policies committed to” by the administration in the roughly $1 trillion infrastructure plan now moving through the Senate and related initiatives.

Text size

President Biden wants half of all new car sales in America to be electric by the end of the decade. It’s a bold goal—and it won’t be easy. It will require a lot of lithium, batteries, EV charging, and EV manufacturing capacity. Most important, it will require billions and billions of dollars.

Wednesday, the White House announced plans for Biden to sign an executive order supporting his goals of boosting the U.S. EV business. “The President believes it is time for the U.S. to lead in electric vehicle manufacturing, infrastructure, and innovation,” reads the news release.

It’s a tall order. There are only about 2 million EVs on U.S. roads today, and only about 2% of all cars sold in 2020 were all-electric. That works out to roughly 250,000 out of 16 million light vehicles. What’s more,

General Motors

(ticker: GM) delivered 1.3 million cars in the U.S. during the first half of 2021, and only 20,300 were EVs, just 1.6%.

GM, of course, has already announced plans to invest $35 billion in EV development between 2020 and 2025, which includes about $8 billion for battery capacity. That is supposed to result in 1 million EV sales a year, giving investors a useful rule of thumb.

If one million EVs need $8 billion of battery capacity, then 8 million EVs—about 50% of U.S. annual light vehicle sales—will require $64 billion.

And that’s just the battery capacity. Auto makers have to engineer and assemble the EVs too. Estimating capacity costs is a little harder because car plants have to be maintained and updated continuously.

Ford Motor

(F) spends roughly $5 billion to $7 billion a year maintaining and updating its 5 million to 6 million car assembly capacity. But

Tesla

(TSLA) has spent roughly $5 billion over the past few years installing about 1.5 million units of brand new EV capacity in Shanghai, Germany, and Texas—call it $3 billion for 1 million in assembly capacity. That means an additional $22 billion will need to be spent to increase and retool automotive capacity.

Then there is charging infrastructure. There are 150,000 gas stations in America and only a few thousand fast-charging stations. Of course, people plug EVs in at home, but they still need to be able to charge up while on the road. The fastest chargers cost about $100,000 each, according to Arcady Sosinov, CEO of FreeWire, which builds charging equipment with battery backup that doesn’t require complicated utility hookups. That price doesn’t include installation. To get to, say, 50,000 fast-charging stations might require another $10 billion.

That’s almost $100 billion in spending over the next nine years—in the U.S. alone—to have the capacity to build enough cars and batteries to reach Biden’s goal and to keep the infrastructure to enable their adoption. It’s certainly possible to spend that—there will be many companies, many industries, and many years involved—and that’s good news for EV charging companies such as

ChargePoint

(CHPT) and providers of capital and automation equipment such as

Rockwell Automation

(ROK), among others.

It’s also good for battery makers such as China’s

CATL

(300750.China), which has spent about $3 billion over the past 12 months boosting its capacity as Chinese EV sales expand rapidly. All the largest battery makers in the world are foreign, based in Korea, Japan, and China.

The spending won’t stop there. Batteries need lithium, so the lithium mining industry has to ramp capacity too. In 2020, the world was mining about 400,000 tons of lithium a year, enough to power 2 million to 3 million EVs a year, although only about one-third of global output is destined for cars. Don’t forget phones need batteries too.

If the U.S. is making 8 million EVs and the rest of the world is doing similar things, then the world will need to mine an incremental 5 million tons of lithium a year. It’s a massive 13-fold increase for the industry. That’s means demand growth as far as the eye can see and is good news for miners such as

Albemarle

(ALB). Albemarle is spending about $800 million $900 million a year on maintaining and expanding its operations. Albemarle has a roughly 20% market share of the global lithium mining market. That doesn’t including lithium refining, however, which mainly happens in China.

All this adds up to about 40 billion lithium-ion battery cells for the U.S. by 2030 and, perhaps, 225 billion annually for the globe. It’s a huge number and doesn’t include batteries going into power storage applications for utilities and backup power for consumers.

It’s a massive transition, one that has been enabled by falling battery costs and success from the likes of Tesla. But taking it mainstream will require hundreds of billions of dollars. It’s one of the largest changes in the car business in the last 100-plus years.

For not, stocks aren’t really reacting to the announcement. Tesla is up 1.2% The

S&P 500

and

Dow Jones Industrial Average

are up 0.4% and 0.6%, respectively.

The market doesn’t typically react to 2030 targets set by politicians—but the transition is under way nonetheless.

Write to allen.root@dowjones.com