The left’s fascination with electric vehicles went into overdrive over the last several months as the energy crisis in the country created record gas price hikes and causes American families a lot of pain at the pump. But with the Manchin-Schumer Build Back Better v2.0 bill having cleared the Senate, it’s becoming more and more obvious that the Democrats have latched onto a solution without understanding the consequences of that solution.
Subsidizing electric cars for Americans is a major component of this climate initiative. This is why Americans are slow to get onboard this (non-coal fired) train. These cars can often be more expensive upfront as well as in maintenance. As it turns out these vehicles are still affordable even with this bill. stillIt is too costly, according to New York Times.
However, automakers complained that only a limited number of cars would be eligible for the credit, at least in the beginning, because there are strict domestic sourcing rules. Experts agree that more steps must be taken to lower the cost of electric cars and increase their availability to reduce greenhouse gas emissions.
The shortage of lithium batteries and components such as semiconductors, which are the main causes of high prices, is what has led to high costs. Carmakers don’t have the incentive to make cheaper electric cars due to strong demand from wealthy buyers. For low- and middle-income people who don’t have their own garages or driveways, another obstacle is the lack of enough public facilities to recharge.
To unclog the bottlenecks, it will take several years. New factories must be built and equipped by carmakers as well as suppliers of battery and chip supplies. Commodity suppliers must open new mines or build refineries. It is difficult for charging companies to quickly install new stations. Electric cars are still the exclusive domain of the well-off.
Passing this provision of the climate bill only makes sense if you have no knowledge of what the electric vehicle industry is currently going through – which is about par for the course when it comes to Congress taking action on just about anything. One of the best ideas in the EV provision is the focus on buying “America first,” so we aren’t propping up problematic regimes when we are buying the vehicles and components of said vehicles.
There is one issue: None of these cars seem to be on the marketplace..
To qualify for a tax credit to purchase an electric car, Democrats have proposed a budget agreement that requires at least 40 percent of battery minerals to come from North America. The battery component would also have to be 100% made in North America by 2029.
Perhaps the most difficult bar, though, considering China’s dominance when it comes to lithium-ion batteries and other minerals and componentsthe vehicles need, is the deal’s stipulation that the credit won’t apply to a vehicle that has any battery components made from an “entity of concern,” such as China, by 2024, and no critical minerals from those sources by 2025.
There is not one electric car currently available that would be eligible. It’s not surprising, considering that the United States accounts for just 8 percent of global lithium-ion battery production, compared to China’s 76 percent.
Companies may not be able trace their minerals and subcomponents in some instances.
It is simply amazing.
So we are supposed to be cheering a bill that is giving massive subsidies to Americans in the midst of an inflation crisis, hoping to convert a ton of Americans to electric vehicles when we’re struggling with our power grid as is, and thus avoiding a climate crisis using materials that we have to pollute the earth to collect. But the bill actually can’t achieve any of that because the parts needed in this adventure aren’t produced here and the bill requires them to be.
As a result, the linked POLITICO piece above describes that the Washington bureaucracy will have to fix all of this… which, incidentally, could put those regulating industries at odds with the recent EPA decision from the Supreme Court.
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