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Automotive

EV transition stalls despite government mandates and billion-dollar handouts

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6 minute read

By Elmira Aliakbari and Julio Mejía

Both Canada and the United States have set ambitious mandates to accelerate the transition from combustion vehicles to zero-emission vehicles. According to the Trudeau government, all new passenger vehicles and light trucks sold in Canada must be zero-emission vehicles by 2035, with interim targets of 20 per cent by 2026 and 60 per cent by 2030. Similarly, the Biden administration has mandated that two-thirds of new vehicles sold in the U.S. must be electric by 2032. But despite massive taxpayer-funded subsidies for the electric vehicle (EV) sector, storm clouds are growing for the industry.

In April, Tesla laid off 10 per cent of its global workforce as it grapples with slow EV demand and falling sales. Similarly, Ford recently announced it would delay the start of EV production at the Oakville, Ontario plant by two years to let the consumer market develop and allow for further development of EV battery technology. Car rental giant Hertz earlier this year announced plans to sell one-third of its U.S. electric vehicle fleet and reinvest in gas-powered cars due to high repair costs and weak demand for its battery-powered cars. General Motors has abandoned the goal of producing 400,000 EVs by mid-2024 due to lower-than-expected sales.

The sluggish demand for EVs and the response from automakers should raise red flags for both the Trudeau government and Biden administration, given the massive subsidies (a.k.a. corporate welfare) injected into the EV and battery production industry. For instance, in Ontario, the Trudeau government and the Ford government have given $28.2 billion to the Stellantis EV battery plant in Windsor and the Volkswagen plant in St. Thomas. According to the Parliamentary Budget Officer, it will take 20 years for the federal and Ontario governments to break even on the $28 billion pledged for those two plants. And this doesn’t include the $5 billion subsidy to Honda for a new EV manufacturing plant in the province.

Similarly, in Quebec, federal and provincial governments have pledged to spend $2.7 billion in subsidies for a new EV battery manufacturing plant and give $644 million to help Ford build a plant to produce EV battery materials.

But in reality, the EV transition faces major hurdles despite the massive amounts of taxpayer money being thrown at the industry.

Firstly, we lack adequate power grid infrastructure to meet the electricity demands of EV mandates. According to a recent study, meeting Canada’s EV mandate by 2035 could increase electricity demand by up to 15.3 per cent nationwide, necessitating substantial investments in new generation capacity and transmission infrastructure. Specifically, Canada would need to construct 10 new mega hydroelectric dams, comparable to British Columbia’s Site C, or alternatively, 13 new gas plants of 500-megawatt (MW) capacity to accommodate the surge in electricity demand from EVs.

Yet the timelines and costs associated with such projects are daunting. Drawing from recent experience with B.C.’s Site C dam, it took more than a decade to plan and comply with environmental regulations and approximately another decade to construct. To date, Site C, which remains under construction, is expected to cost $16 billion.

Secondly, there’s a shortage of mineral supply for EV batteries, with projections indicating the need for numerous new mines to meet EV adoption mandates. According to a recent study, to meet international EV adoption mandates (including mandates in Canada and the U.S.) by 2030, the world would need 50 new lithium mines, 60 new nickel mines, 17 new cobalt mines, 50 new mines for cathode production, 40 new mines for anode materials, 90 new mines for battery cells, and 81 new mines for EV bodies and motors, for a total of 388 new mines worldwide. For context, in 2021 there were only 340 metal mines operating in Canada and the U.S.

Historically, the development of mining and refining facilities has been sluggish. Production timelines range from six to nine years for lithium and 13 to 18 years for nickel—two elements critical for EV batteries. The aggressive government timelines for EV adoption clash with historically sluggish metal and mineral production, raising the risk of EV manufacturers falling short of needed minerals.

The EV transition faces major obstacles, and the recent scaling back or delays in EV production by automakers should serve as a warning to governments about the feasibility of their forced transition policies, which clearly put Canadian taxpayers at risk.

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Automotive

Biden’s Ambitious EV Charging ‘Fantasy’ May Be On A Collision Course With Reality

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From the Daily Caller News Foundation

By NICK POPE

 

President Joe Biden has pledged to install 500,000 public electric vehicle (EV) chargers around the U.S. by 2030, but logistical hurdles may be too much to overcome.

The Biden administration landed $7.5 billion to build out a network of public EV charging stations around the country in the bipartisan infrastructure package of 2021, but those funds have only led to a handful of operational charging stations to date. Transportation Secretary Pete Buttigieg reaffirmed the administration’s goal to build 500,000 chargers with the money by 2030 during a May television appearance on CBS News, but challenges like adding transmission lines, navigating the permitting process and coordinating with utility companies figure to make the goal improbable.

As of April 1, the administration’s $7.5 billion push had only led to seven operational charging stations combining for less than 40 chargers around the U.S., a pace that has drawn criticism from House Republicans and even Democratic Oregon Sen. Jeff Merkley. While other projects are on their way to being built and operational, the nation’s EV charging infrastructure remains mostly concentrated in more densely-populated, coastal areas of the country, according to the Department of Energy (DOE).

While results have been slow to materialize, federal funding should be sufficient to build approximately 25,000 charging spots at about 5,000 stations, according to Atlas Public Policy, a policy analysis organization that focuses specifically on EVs. In order to reach those figures by 2030, the administration’s funding will have to spur the construction of more than 900 stations each year until then, a big step up from the program’s output of less than 10 stations over nearly three years.

“Our programs are accelerating private sector investment that puts us on track to deploy 500,000 charging ports well ahead of schedule and continue to expand a convenient and reliable charging network,” a Department of Transportation spokesperson told the DCNF. “There are currently projects underway in partnership with states and local grantees for 14,000 federally-funded EV charging ports across the country under the [National Electric Vehicle Infrastructure (NEVI)] and [Charging and Fueling Infrastructure (CFI)] programs that will build on the 184,000 chargers operational today.”

Of the 184,000 chargers in operation today, more than 107,000 were already in circulation as of 2020, the last full year before the Biden administration took office, according to the DOE. Moreover, there are only about 10,000 fast charger stations in the U.S., a number that EV proponents would like to see increase to alleviate the public’s concerns about EV range and recharging wait times, according to The Washington Post.

Some of the biggest logistical hurdles are ones that may not be immediately obvious, such as enduring the process of building out needed transmission lines and upgrading existing utility infrastructure to accommodate hundreds of thousands of new chargers, according to experts who spoke with the Daily Caller News Foundation about whether such a number of chargers will be operational by 2030.

One skeptical expert is Dr. Jonathan Lesser, a senior fellow at the National Center for Energy Analytics and president of Continental Economics. Lesser estimates that “hundreds of thousands of miles” of new transmission lines will be needed to deliver enough electricity to the right places to meet the administration’s goal, a tall order given that the U.S. managed to complete less than 700 miles of transmission projects in 2022, according to data aggregated by Statista.

Lesser wrote his own analysis of the challenges the administration’s EV charger push faces for The Hill on Monday.

“The administration’s efforts to mandate EVs without considering the physical infrastructure to charge them (to say nothing of the cost), not only highway charging stations but also the necessary upgrades to millions of miles of local distribution circuits and transformers for home charging – is either an exercise in green virtue signaling or a cynical effort to restrict Americans’ mobility,” Lesser told the DCNF. “If EVs are the wave of the future then consumers will purchase them without the need for mandates and the private sector will develop the necessary infrastructure, just as it did a century ago and just as Tesla has done for its vehicles, without the need for government intervention.”

“If all those chargers were in place, you would need hundreds of thousands of large transformers and transmission lines along highways to provide the electricity,” Lesser continued. “You would also need linemen to install everything – and they are already in short supply. Of course, none of this addresses the issue of where the electricity comes from – if it is to be from renewables (e.g., wind and solar), there would have to be a massive building effort.”

Lesser believes there is “not a chance” that the 500,000 charger goal is met by 2030, and added that Buttigieg’s suggestion the administration will reach that target amounts to “pure fantasy.”

In addition to the billions of dollars meant to subsidize public charging infrastructure, the administration is also spending big to help manufacturers produce more EVs and to blunt the higher costs of EVs for consumers. Further, federal agencies have also promulgated aggressive fuel economy standards and tailpipe emissions rules that will force significant increases in EV sales over the next decade for light-, medium- and heavy-duty models.

Energy Secretary Jennifer Granholm described the chargers covered by the $7.5 billion program as “the hardest ones because they’re going to places where the private sector hasn’t gone because there’s no electricity, because they’re remote” at Politico’s 2024 Energy Summit remarks on Wednesday.

Aidan Mackenzie — an infrastructure fellow at the Institute for Progress with particular expertise covering energy, transportation and housing policy — agreed that logistical challenges are likely to hinder the administration’s goal for charger deployment by 2030. Specifically, he highlighted securing complementary infrastructure, like transmission lines, as likely to sap time and resources away from the effort to construct a national network of public chargers.

“It seems like it’s going to be hard to meet this target,” Mackenzie told the DCNF. “Different utility regions do not necessarily have an incentive to plan or build large capacity transmission lines that share power. They often interrupt the way that utilities want to control the generation in their region. So, I would very much expect that to be the binding constraint.”

However, Mackenzie added that the administration could achieve the desired results of its $7.5 billion program and its broader goal of 500,000 charger goal if regulators and builders are able to develop “muscle memory” in the earlier stages of rollout so that officials from both sectors can more easily and quickly navigate complex processes in the near future.

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Automotive

Current EV strategy charging ahead to failure

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Dan McTeague  Written By Dan McTeague

For years now I’ve been saying that electric vehicles, and EV mandates, are bad for Canada.

Back in 2020, when the then-CEO of Toyota, Akio Toyoda, voiced his concerns that governments were moving too fast in their push for an all-electric car market when there were other good options available which didn’t require the same multi-billion dollar infrastructure overhaul or increase in electricity generation, I asked why we weren’t listening to a man who knows his own business.

When Europe found itself in an energy crisis in the winter of 2022, and the Swiss government asked its citizens to avoid driving their EVs, even considering an outright ban, to protect their fragile electricity grid, I said that with our already-strained grid we were seeing our future playing out before us in Switzerland and mandates or no, consumers just wouldn’t stand for it.

And more recently, as stories have piled up of EVs’ vulnerability to the cold — “We got a bunch of dead robots out here,” as one frustrated EV owner put it, surrounded by frozen EVs that had run out of juice while waiting for a charge in a cold snap — I’ve asked over and over again, why on earth our government is trying to force the large scale adoption of an automobile technology which functions so poorly in a normal Canadian winter.

I take no pleasure in being proved right, but nearly every day brings about a new story of EVs failing to meet the lofty expectations our leaders have set for them.

  • Recent headlines have trumpeted the difficulties EV drivers are having getting their cars fixed, because so few mechanics know how to work on them.
  • People are finding that the resale value of their EV is falling at a much faster rate than their neighbour’s reliable internal combustion engine vehicle.
  • Rental car companies like Hertz have been taking major losses after over-investing in EVs, that no one wants to rent. Apparently people don’t like the idea of pinning their vacation on a car they might not be able to charge.
  • And major auto manufacturers have been significantly scaling back their annual EV production, despite impending mandates which will force consumers to buy their product in just over a decade.

Even with the generous government subsidies handed to Ford in order to produce made-in-Canada electric SUVs, that company has decided to push their release date for the vehicles back two years — a decision that means layoffs for the majority of the 2,700 workers at the plant, according to the Globe and Mail. GM has followed suit, with recent  reports  claiming that they are “having a second look” at plans to build EV motors at their plant in St. Catherines, Ontario.

Those companies are beginning to accept reality, something various nations around the world have started to do, as well. The U.K., Germany, Italy, and other European countries, as well as the U.S., have had resistance to EV mandates play a big role in their politics lately. The Biden campaign was even forced to issue a statement saying, “There is no ‘EV mandate,’” after Donald Trump predicted to Detroit autoworkers that the White House’s pro-EV policies would put them out of work.

In the face of all of this, the Trudeau government continues to double down, reaffirming mandates and shovelling more and more tax dollars into the EV fire.

They should know better.

And maybe they do.

But maybe the dollars and the promises to their activist friends have just gotten so big that they feel like they can’t change course now.

Or maybe they are just too stubborn to admit that people like me were right all along, that they bet big and they bet wrong. And they can’t say they weren’t warned.

Buckle up.

Dan McTeague is President of Canadians for Affordable Energy

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