Air Date: Week of March 29, 2024

The Nissan Leaf, priced around $30,000 in March 2024, is one of the cheapest electric vehicles available in the US. (Photo: Benespit, Wikimedia Commons, CC BY-SA 4.0)

China’s electric car sales are in the fast lane and lead the world while the U.S. EV industry lags. Although Biden administration policies are designed to jumpstart EVs, a partisan divide on EVs is slowing adoption. Jim Motavalli writes for Autoweek and Barrons and joins Host Aynsley O’Neill to explain what’s going on with the U.S. EV industry and why the future looks bright.

Transcript

DOERING: From PRX and the Jennifer and Ted Stanley Studios at the University of Massachusetts Boston, this is Living on Earth. I'm Jenni Doering.

O’NEILL: And I’m Aynsley O’Neill.

China's electric car sales are in the fast lane, leading the world with 7.7 million sold in 2023. And China is sending its EVs abroad, too. The US Energy Information Administration reports that China was responsible for 35% of global EV exports in 2023. That’s in stark contrast to the United States, where automakers like Ford are tapping the brakes on production of the F-150 lightning pickup truck and other EV models. Compared to Chinese drivers, US consumers overall have been slower to switch to electric vehicles. And in this country, where politics drive so much of the conversation, especially during an election year, attitudes towards EVs notably differ across party lines. A 2023 Pew Research Center survey found that 70% of Republican-leaning adults are not likely to consider electric with their next car purchase, while 56% of Democrat-leaning adults were somewhat or very likely to consider an EV. So to help us make sense of the future of electric vehicles, I’m joined now by Jim Motavalli, who writes about green transportation for Autoweek and Barron’s. Welcome back to Living on Earth, Jim!

MOTAVALLI: Great to be on.

O'NEILL: Now I understand that in China, over a third of all the cars that were sold last year were electric vehicles--EVs--assuming that you include a plug-in hybrid in that category. And in the United States, it was less than 10%. Why do you think that China is so far ahead of us in moving to this electric vehicle future?

MOTAVALLI: Well, first off, it is definitely true that EVs are a much smaller part of the market in the US than they are in China. But the market in the US is also growing dramatically. And I would predict 2024 will be the biggest EV sales year. Now China has basically a command-and-control type approach. And they can basically dictate that the country's carmakers will switch to EVs. Right now, it's a big debating point in the presidential election. And we are allowed to give a lot of pushback to any proposal, including switching to electric cars. But the world has basically already voted for that to happen, and it is going to happen very soon. So I think the change is inevitable, though it may take longer in the US than it does in China. I mean, there's other parts of the world that are even more adopting to EVs. In Norway, it's 90% of all new car sales, and you can't even buy from the Volkswagen Group anything but an EV. And that's a major sea change.

O'NEILL: Well, one of the things I've just seen is that BYD, a Chinese company, has just sort of lapped Tesla and become the biggest maker of EVs worldwide. And you wrote an article about BYD now building factories in Mexico?

MOTAVALLI: Exactly. Yeah. And these are the type of small cars, very bare bones vehicles, that Americans don't really like that much. But there's a lot of fear in the auto industry that they could start selling those EVs built in Mexico in the US, and they would avoid some of the biggest tariffs that are now in place against Chinese-made vehicles if they import them from Mexico. But BYD is saying that it's not going to do that. They say they've got their hands full just meeting orders in Mexico and in South America. If you go to Europe now you'll find a lot of Chinese-made cars on the market, in the US hardly any.

O'NEILL: So in your article, you mentioned that some Chinese cars in Mexico are as cheap as $21,000. And in China, the automaker BYD has started selling a car as cheap as $9700. Either way, that's a pretty drastic difference from a lot of cars here in the US. What's going on there?

MOTAVALLI: Well, right now you can't buy an EV in America for less than about $30,000. The average price of an EV I think is around $54,000. But keep in mind, gas car prices have gone up way high too—the average one of those is 45 to $50,000. Because people are buying big trucks with lots of options, and large cars are back in favor again. So the average price of any car in America is pretty high. I don't know if people realize it, but America has some of the strongest safety regulation for cars overall, with airbags, and early warning systems, and crash protection. China doesn't have those same regulations, it's not nearly as tough. And it makes it possible for them to build cheaper cars, which they can sell in markets like Mexico, which don't regulate cars as much as the US does either. I went to China, and I drove some Chinese EVs. This was like 10 years ago. And some of them were downright frightening. They would never pass American safety standards. But they were aimed only at the Chinese market. Now, when the Chinese have actually built cars intended for export to the US, like Volvo and Polestar both have done, they make pretty good cars.

O'NEILL: And a key aspect of buying electric in the US is that there are some pretty nice tax incentives, even with a high price point. But there's a number of requirements in order to get these tax credits. What's going on there?

MOTAVALLI: The Biden rules, to the Inflation Reduction Act, essentially had the effect of creating a lot of American manufacturing, because you don't get the incentives unless the car was built in America. And you'll get more incentives if the battery was built in America and the raw materials in the battery come from America. So that has led to the biggest boost in US manufacturing in, I don't know, 50 years—automakers and battery companies and recyclers announcing US-based plants. So it's really been a boost to the American economy.

O'NEILL: I'm thinking again about China and their significantly cheaper EVs. To what extent does something like that affect American carmaker ability to be competitive in a global marketplace?

MOTAVALLI: It affects it very much. But the US automakers are not competitive in the global marketplace. We hardly sell cars outside the US. There's some slight penetration in Europe now. I mean, you've got Stellantis is an international company. So it is selling Jeeps in Italy, for instance, and you could buy Chrysler minivans in Rome, or whatever. But you know, that's not a big part of the mix. And American companies have never had a huge export business, in general because they build cars that are not compatible with other markets. Like Ford, for instance. They have their own divisions in Europe that make cars for the European markets that are just more suited to those markets. So they're there, but they're not selling cars made in America that were intended for American audiences. American cars have just been too big, too gas guzzling, all those things.

O'NEILL: So as I understand it, on March 20, the EPA announced strict new emissions standards for cars and other vehicles. The rules are going to apply to models for 2027 and later, and they don't affect used vehicles. But even with those caveats, this is being described as, you know, a crucial climate action, one of the most important that the Biden administration has taken. What do you think the impact of these rules are going to be? And what kind of responses have you seen to them?

MOTAVALLI: It's nothing new. These rules have been in evolution for a number of years. It's essentially creating very strong incentives for people to buy EVs. But I've seen a sort of partisan uproar over it. Right now, in part because of a lot of rhetoric about EVs, both on the positive side from Democrats and on the negative side from Republicans, it's very split along party lines. A majority of Democrats say they would consider an EV for their next car. And a majority of Republicans say they would not consider one.

O'NEILL: Well, Jim, what do you make of this partisan split? What's going on there? Is it just increasing polarity in the US landscape generally, or--?

MOTAVALLI: Well, Americans are very sensitive about their car choices. It's like if you tell people they're going to take the guns away, people get very upset. If you tell people, you're not going to be able to buy your Ford F-150 pickup truck because the Democrats are going to take it away, that's a very effective organizing tool. The fact is, it's wrong. The Biden initiative is not a ban on gas cars. It is a evolution into electric and it's incentives for electric. And in any case, the Ford F-150 will be available as an EV. And it's going to be more capable than the one you already own. But you know, in terms of campaign rhetoric that might score with the public, you probably do fairly well with a message like that. And again, as I think it's akin to guns, telling people you're going to take their guns away.

O'NEILL: Jim, what kind of misconceptions do you think Americans tend to have when it comes to EVs?

MOTAVALLI: Well, the biggest one is what they call range anxiety. And range anxiety is thinking you're going to run out of juice and get stranded somewhere. EVs have a lot more range than they used to. And it's typical that a new EV you buy should go 300 miles on a charge. It's not that different from the range of a gas car. So that's one. And they don't understand the public charging network that much. I don't think they realize that those networks are fairly robust now, and they're really across the country. So refueling your EV should be fairly easy. But the main things are range anxiety and price. EVs are still higher priced than gas cars. But I think that EVs are better cars than gas cars by almost any measure. And the people who are skeptical about them haven't driven them. You will immediately find that EVs are quieter, that they accelerate better, that they're going to need a whole lot less maintenance, and operating them also costs a whole lot less. So the purchase price is higher. But almost every other measure, they're better. They're also faster. If you look at the three fastest cars on the market today, which are under two seconds to 60 miles an hour, all three of them are electric.

O'NEILL: Well, so let's imagine a situation. I'm situated up here in Boston. Let's say I want to drive down to Philadelphia in an electric car. To what extent would I need to be worried about the distance?

MOTAVALLI: Well, depends on what kind of car you have. Like if you have a Tesla, you shouldn't worry at all, because there are Tesla charging stations everywhere. All the other automakers are switching to the Tesla standard, but that hasn't happened just yet. So if you have something other than a Tesla, you're going to be dependent on ChargePoint and Electrify America and other stations that are now dotting the landscape. Those charging stations have had a very hard time being 100% reliable. So people are showing up at charging stations and finding them out of order. And that's a big issue. It's one reason auto manufacturers are switching to the Tesla standard. Because the Tesla network has been much more reliable. Pretty soon you'll be able to charge your EV at Tesla stations, no matter what kind of brand it is. And so that should actually make things a whole lot better with charging.

O'NEILL: Well, Jim, so we had this all starting out in the context of China's massive EV market. But it sounds like you don't feel like the US is too far behind.

MOTAVALLI: I think we're gonna end up in the same place as China. It might take a little longer, but we're all heading in the same direction. If you look at the way the world is evolving, Europe as a whole, the European Union has actually enacted a ban on internal combustion cars as of 2035. Several American states have also done that, including New York and California. And this is the de facto rule in China. India has even talked about it. So the world is basically moving towards a situation where there will be no new gas cars sold by 2035. And if you look at what the automakers are saying, what their plans are, they're not planning to build any internal combustion cars after 2035. And many of them will stop selling them earlier than that. So this is not something that can be either stopped or started by the Biden administration. It's essentially where these global automakers have to be anyway.

O'NEILL: Jim Motavalli is a blogger with Barron's and Autoweek. Jim, thank you so much for taking the time with us today.

MOTAVALLI: Sure, great to be on.

 

Links

Read Motavalli’s Autoweek article “Are Chinese EVs from Mexico a Threat to the US?”

MIT Tech Review | “How Did China Come to Dominate the World of Electric Cars?”

Learn more about the new EPA emissions rules