Political Propulsion: Policy and the Rise of the Electric Vehicle
![The Global Rise of the Modern Plug-in Electric Vehicle book cover with a plug-in electric car on the front](/sites/default/files/styles/max_325x325/public/images/Graham_Global_copy.png?itok=ZsOWN6HN)
Last May, Ford rolled out its first full-size electric pickup, the F-150 Lightning, retaining the name of its famous muscle truck that is the most popular vehicle in America year after year. According to Dan Neil, an admitted fanboy of electric vehicles and auto reviewer for the Wall Street Journal, “The Lightning represents an American manufacturing triumph, a brand resurrection, a win for working people, a vehicle segment out of the darkness into the light.” Raves Neil, “I can’t believe they got all those smart people to move to Michigan.”
The coming of the hard-working electric F-150 is a departure from the high-tech Tesla, the strongest brand in what the Germans call “electro-mobility,” catering to young, hip, and rich buyers. Whether or not this new plug-in all-American truck is the harbinger of mass commercialization is the subject of John D. Graham’s massive, comprehensive, thorough, enjoyable, and in-depth study The Global Rise of the Modern Plug-In Electric Vehicle: Public Policy, Innovation and Strategy.
Longtime readers of The Environmental Forum will recall Graham’s service as director of the Office of Information and Regulatory Affairs, within the Office of Management and Budget, during the George W. Bush administration, where he functioned as “regulatory czar” overseeing all rules promulgated by federal agencies. His portfolio, both in academia and government, encompasses public policy and health, relative risk, and benefit-cost analysis. Oliver Houck and this reviewer noted his book, Risk v. Risk, co-edited with Jonathan Wiener, in our survey of best books for ELI’s 50th anniversary issue (“Reading the Environment—1969-2019,” November/December 2019). He also led the Paul H. O’Neill School of Public Affairs at Indiana University, where he still resides as professor of risk and policy analysis.
It is hard to conceive of a more exhaustive, informed study of the history of electro-mobility than the The Global Rise of the Modern Plug-In Electric Vehicle. Its thirteen chapters contain one hundred to two hundred footnotes each, citing a vast literature on its subject. It is global in reach and granular in its technical, environmental, economic, and political analysis. The book explains how politics, i.e., “industrial policy,” is at the heart of the rise of electrified vehicles.
This is not a story of spontaneous free markets responding to consumer demand, although many enterprising people and companies are highlighted throughout. Nor is this a case of the supply creating the demand or an inventor, like Steve Jobs, creating something people want without prior knowledge—“People don’t know what they want until you show it to them.” Electrifying vehicles is a government-run show from end to end, be it in California, Japan, China, Europe, South Korea, or the United States as a whole. That said, absent outright bans on the internal combustion engine, unlikely at the federal level in the United States but not in California or Europe, “politicians will allow consumers to decide the rate of PEV (plug-in electric vehicle) penetration in the marketplace from 2021-2025.”
The marketing challenge of electric vehicles is illustrated by a study cited by Graham comparing the costs to drive a Hyundai Kona BEV, or battery-electric vehicle, and a Kona turbocharged gasoline vehicle over a 515-mile route in California. The gas vehicle “charged” twice, filling up at the pump while taking five minutes each time. The BEV recharged at Level 3 stations twice, but took 2.3 hours each time. “The cost comparison found that the energy costs of the BEV are more than twice the costs of the gasoline.”
Rachel Wolfe wrote of her trip in a Kia EV6 from New Orleans to Chicago and back for the Wall Street Journal. The title: “I Rented an Electric Car for a Four-Day Road Trip. I Spent More Time Charging It Than I Did Sleeping.” $7.5 billion has been allocated in the newly enacted Infrastructure Investment and Jobs Act for the deployment of 500,000 hopefully faster charging stations.
Graham describes how concerns with energy security, urban air pollution, and climate change have all motivated national governments to promote electro-mobility, although the relative weight of these motives has changed over time. Fracking, directional drilling, and the demise of “peak oil” theories and the success, say, of the Clean Air Act in the United States have shifted the focus to climate—as has happened decisively in California.
A word about terminology and acronyms and other abbreviations the reader will encounter in Graham’s magnum opus. Much of the technical discussion in the book revolves around batteries, specifically, lithium-ion batteries, (LIBs). They are the single largest cost item in a plug-in electric vehicle (PEV), and have been instrumental in the rise of electro-mobility. The verdict is still out as to future LIB improvements, which might enable mass commercialization. Breakthroughs are needed.
The hybrid electric vehicle (HEV), think Toyota Prius, combines electric power and the internal combustion engine, allowing the batteries to be constantly recharged during “regenerative braking” or by the gasoline or diesel engine. “The plug-in hybrid vehicle (PHEV) is different because the battery charges from a standard electrical wall socket,” reports Graham. Since the PHEV does not unduly limit driving range, it reduces customer “range anxiety” over finding charging stations or the length of time that it takes to charge, which is a concern with battery-electric vehicles (BEVs) as well as PHEVs.
There are also fuel cell electric vehicles (FCEVs or FCVs) utilizing hydrogen instead of a battery to store electricity. Drive trains are the same in both fuel cell vehicles and BEVs.
Plug-in electric vehicles (PEVs) is an umbrella term covering both BEVs and PHEVs, since both have plug-in capability for charging, unlike HEVs. The phrase “electrified vehicles” includes HEVs, PEVs, and FCVs.
According to Graham, “We may be standing on the precipice of a revolution in propulsion not seen since the horse and buggy.” Still, “the pace of the transition to PEVs will be determined as much by politics as by markets.”
Thus, he discusses subsidies, tax credits, protectionism, manipulation of markets, feebates, limits on cars in city centers, and other creative interventions by governments around the world. Clearly, Norway and California are in the vanguard of these efforts, with the former way ahead of the latter.
Germany was committed to diesel engines until the Volkswagen cheating scandal, described at length by Graham in a very interesting chapter. VW viewed the California zero-emission vehicle (ZEV) standards as more protectionist than protective. German Chancellor Angela Merkel even met with Governor Arnold Schwarzenegger and California Air Resource Board Chair Mary Nichols over breakfast at the Four Seasons Hotel in Beverly Hills to argue the benefits of diesel in reducing carbon dioxide levels, but to no avail. This trauma transformed Germany, and, hence, the European Union, from laggards to enthusiastic supporters of electrification. As another bit of good news, Japan has made hybrid vehicles work and is hoping, eventually, to move to a “hydrogen society.”
Each jurisdiction discussed in this volume has a unique story or history behind its governmental approach to electric vehicles, batteries, supply chains, subsidies, and regulation. To take another country and only one aspect of the topic, China, deciding it could not compete with traditional auto companies worldwide on the internal combustion engine, has sought to “leapfrog” to electric vehicles, as well as controlling the essential minerals and supply chains.
“China has been successful in manipulating the global price to discourage private investments in competitive mining and processing activities,” writes Graham. “Since the central government of China is willing to use rare earths as a geopolitical weapon, it will take coordinated governmental policies of multiple countries to neutralize China’s power.”
At the end of his tome, Graham revisits his earlier claim that we are on the “precipice of a revolution in propulsion not seen since the horse and buggy,” declaring that “we are, but the transition will move faster in some parts of the world than others.” He notes a study by the Boston Consulting Group, pre-Covid, estimating that “the 29 largest automakers in the world will invest more than $300 billion over the next ten years on new offerings of electrified vehicles. More than 400 new models (MHEVs, HEVs, PHEVs, and BEVs) should appear in 2025.” 78 will come to the U.S. market alone; six will be pickup trucks. A MHEV is a “mild” hybrid electric with a small, higher-voltage LIB, usually 48 volts supplementing the 12-volt lead-acid battery.
Despite this impressive investment, the future is uncertain, given the great unknown: consumer reaction. So Graham sets out four different scenarios which may, or may not, play out between now and 2030: BEVs are restricted to niche markets; a decade of robust competition between MHEVs, HEVs, and PEVs; PHEVs share the limelight with BEVs; and, finally, BEVs share the limelight with FCVs. He then goes on to discuss the variables of consumer appeal, CO2 regulation, and other policy that might tip the balance, one way or the other, among the various technologies.
While “some politicians may be inclined to make the decision for consumers by banning, restricting, or taxing heavily (as does Norway) the use of conventional powertrains,” again, it is unlikely to happen in the United States as a whole, California excepted. China and Europe are a different case entirely.
For electric vehicles, the consumer is still king in America, at least for the foreseeable future.
G. Tracy Mehan III is executive director for government affairs at the American Water Works Association and an adjunct professor at Scalia Law School, George Mason University. He may be contacted at gtracymehan@gmail.com.
On the Plug-in Electric Car Movement.