Electric vehicles stand at the center of every “green energy” initiative. Multiple jurisdictions mandate and subsidize the inevitable transition to “clean” transportation. Some policymakers have gone further, setting deadlines for outright bans on the internal-combustion engine (ICE), and Green pundits regularly issue forecasts promising the imminent dominance of electric vehicles (EVs).
The EV is central to the notion that we’re on the cusp of a grand shift to a “new-energy economy.” In addition to its putative environmental benefits, the EV, we’re told, is a better machine than an ICE. It’s easier to manufacture, uses less labor, and will—eventually—cost less. Since consumers will soon demand an all-EV future, we should embrace policies to accelerate the transition.
Rarely have so many claims about a product been so wrong. The only unequivocal fact in the EV narrative is that more EVs exist today—approximately 4 million—than ever before. Lithium-battery chemistry—the inventors of which received the 2019 chemistry Nobel Prize—along with advances in power electronics, has made it possible to build practical, if expensive, electric cars. But everything else in the popularized EV storyline is deeply misguided. Advocates claim that EVs are far simpler machines than combustion engines. But the essential “engine” for both is similarly complicated. While the EV’s electric motor is simple, its battery is a half-a-ton electrochemical machine with thousands of parts and welds, along with wiring, electronics, and cooling. It’s every bit as complex as—and far more expensive than—the combustion-mechanical drivetrain that it replaces.
Manufacturing automotive batteries is surprisingly labor intensive. Tesla’s gargantuan battery factory in Nevada produces about 1,000 propulsion batteries per year per 12 workers. Meantime, a modern engine and transmission factory produces about 1,000 mechanical-propulsion systems per year per four workers. EVs don’t reduce total labor requirements; they simply outsource American labor. Since most automakers aren’t capable of fabricating batteries, EV-battery jobs reside mostly in Asia. China alone produces 60 percent of the world’s lithium batteries. There’s no prospect of creating a domestic EV supply chain anytime soon, regardless of incentives.
To EV enthusiasts, U.S. job losses are beside the point because ending our reliance on fossil fuels and saving the planet takes precedence. But it requires the energy equivalent of about 100 barrels of oil to fabricate one battery capable of storing the energy contained in a single barrel of oil. Importing batteries manufactured on Asia’s coal-heavy grid means that consumers are just exporting carbon-dioxide emissions, along with jobs. It takes years to offset those emissions when the EV is plugged into our real-world power grid, where coal and natural gas still account for 70 percent of electricity generation.
Then there’s the array of primary minerals—lithium, cobalt, manganese, carbon, nickel, copper, aluminum—needed to produce a 1,000-pound automotive battery. Accessing the necessary minerals for that one battery entails mining, moving, and processing some 500,000 pounds of raw materials. Embracing batteries at automotive scales would lead to an unprecedented global expansion in mining, with all the accompanying negative environmental effects that tend not to be palliated in developing countries.
None of this seems to concern China, which boasts 60 percent of global EV sales. There, the EV supply chain’s labor intensity is a feature, not a bug. After all, Western nations have largely given up on the related manufacturing, as well as materials-mining and chemical-refining industries. China has spent $60 billion cumulatively in domestic subsidies in order to become the dominant global player, but it ended the EV gravy train this year, cutting subsidies by 65 percent, with plans to eliminate them entirely next year. The result? China’s vaunted EV sales growth went negative. Having abandoned direct subsidies, China will now simply require that EVs make up 3 to 4 percent of all domestic car production. Policymakers in democracies and autocracies find mandates appealing because they are a de facto hidden tax wherein industries, rather than government, get blamed for resulting higher costs.
Mandates and bans can enhance EV sales for as long as markets and consumers tolerate them. But that approach makes a lie of claims that “EV sales are accelerating.” Capitulating to a mandate, much less one set to a mere 4 percent, means that we’re miles away from seeing a new-energy transportation system. Sales data show what consumers actually want. Light trucks—SUVs and pickups—make up 70 percent of all vehicle sales in America. This trend accelerated after the Great Recession, during a period of supposedly rising “climate awareness” and the emergence of the millennial car buyer. There isn’t a battery option for SUVs at a price that consumers, rather than governments, will pay. The few successful EV-SUVs are strictly for the 1 percent crowd.
In reality, 96 percent of America’s consumer vehicles are gasoline-fueled ICEs, and 3 percent have the diesel option, the latter outselling electrics. The ratios are similar globally. Odds are the EV option will eventually do far better than the venerable diesel, but the jury is out on how much better. And arithmetic reveals that even a 100-fold growth in EVs wouldn’t displace 10 percent of world oil.
In one of history’s ironies, the Tesla Model S was introduced in 2012, exactly 100 years after Studebaker ended production of its lineup of electric cars. Back then, EVs had dominated car sales for nearly 25 years. It’s taken one century since then to invent a useful battery. But an EV is still a car with the same features consumers focus on when making buying decisions: body style, paint, seats, cup-holders, cool touchscreens, and so on. Changing a car’s fuel source is about as revolutionary as changing the feed for a horse.
Choosing a battery over an ICE isn’t a revolution. It’s an option—an expensive one—that reduces neither total labor nor environmental impacts.
Mark P. Mills, a Manhattan Institute Senior Fellow, is author of the just-released The New Energy Economy: An Exercise In Magical Thinking.