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Surprising no one, newly minted U.S. Transportation Secretary Sean Duffy, a former Fox News personality and Wisconsin congressman, kicked off a rollback of Biden-era vehicle rules that pushed automakers to make cleaner, more fuel-efficient cars and trucks. The reason given was certainly honest: “President Trump has announced that it is the policy of the current Administration to promote the production, distribution and use of reliable domestic energy supplies, including oil, natural gas and biofuels.”
The move was presented as one that will lower vehicle prices and save carbuyers money by reducing “the burdensome and overly restrictive fuel standards that have needlessly driven up the cost of a car in order to push a radical Green New Deal agenda.”
But there’s no data to support that the move will lower new vehicle costs. Price increases are mostly driven by the fact that Americans keep buying pricier large pickups and SUVs and fewer sedans and small cars, rather than more efficient engines or electric powertrains. And of course, the cost of vehicle ownership doesn’t end with the purchase price. Fuel costs for EVs, for example, vary by region but are typically less than half that of gasoline vehicles. One study last year found that Americans who drive 11,000 miles a year would save $1,200 annually by switching to an EV. Even conventional hybrids like Toyota’s stalwart Prius, averaging over 50 miles per gallon, are much cheaper to operate over the long run. (That benefit may get more appealing as Trump’s 25% tariffs on Canadian goods could push up U.S. gas prices.)
That said, upfront costs of electric models are definitely higher, so Trump’s plan to eliminate the $7,500 tax credit people get for buying them–and federal funds for EV charging stations–will slow purchases. Even so, industry forecaster Cox Automotive expects EV sales to rise further in 2025, accounting for 10% of all new vehicle sales, up from about 8% last year.
Automakers, who’ve poured tens of billions of dollars into R&D and new battery and EV production facilities aren’t thrilled with the shift in policy because it not only risks their investments but puts the U.S. at a disadvantage with China, the world’s dominant EV producer and seller.
“The only beneficiaries will be oil executives and China’s auto industry, which will be happy to sell electric vehicles around the world with little U.S. competition,” said Dan Becker, a long-time advocate for tougher fuel economy rules and director of the Safe Climate Transport Campaign.
The Big Read
Copyright 2023 The Associated Press. All rights reserved
How GM Topped Tesla To Become One Of The Fastest-Growing U.S. EV Makers
Tesla CEO Elon Musk kickstarted the market for electric cars when he first began selling the Roadster in 2008, but 17 years later his dominance is slipping.
The company’s sales are in decline for the first time and with the mercurial billionaire’s short attention span fragmented between five different companies, a key role in the new Trump administration and a monomaniacal obsession with owning the libs, he’s off his game. And rivals are taking notice.
Top among them is General Motors. The Detroit-based carmaker, which notoriously killed off its first commercial electric car, the EV1, in 2002–a move that inspired Tesla’s creation in 2003–is positioning itself for major growth in the space.
In 2024, GM’s EV sales surged 50% to 114,432, its highest ever aided by the new Equinox EV, a Tesla Model Y fighter. That made it one of the fastest-growing players in the electric space. Meanwhile, Tesla, long past its scrappy startup years, reigns as the dominant electric nameplate, selling 633,762 EVs to U.S. buyers, five times GM’s volume. But that’s down 5.6% from 2023, even with the addition of its polarizing Cybertruck. Add in CEO Elon Musk’s controversial behavior and the brand faces further challenges this year–especially in EV-crazy California, the country’s top market.
Hot Topic
© 2023 Bloomberg Finance LP
Kurt Kelty, GM’s vice president of battery operations, on creating lower-cost EV batteries
We’ve discussed batteries since Tesla’s early days. Is a breakthrough in cost close or is it still a gradual progress?
We don’t have Moore’s law in the battery industry. It’s gradual, incremental improvements–and it’s across the board. It’s in the binders that we’re using, in the copper foils, as well as the cathode and anode material. The active materials, yes there’s work there and we’re getting improvements, but it’s all the other things like the separators, making thinner separators. The biggest thing that’s going on is the cost reduction in each one of these, where people are figuring out different ways to manufacture the same thing.
For example, we met with a company that’s working on a cathode material. The end result is the same cathode material, but it’s using this entirely different process to get there which is much lower cost. We’re getting more of these kinds of things.
What’s the biggest change in the battery landscape since things got rolling at Tesla in 2006?
The number of companies that are in this space and the investment dollars–it’s orders of magnitude greater.
There’s just a lot of companies now, like GM. We’ve invested in over a dozen companies in the battery supply chain. You’re getting companies like us investing, you’re getting companies like us making contracts. And it’s not just investment. The contracts we’re doing with LG Chem, we’re not an investor in LG Chem, but we’re giving them a supply agreement that they can then bring to the bank. There’s so much activity that’s driving these little incremental improvements that keep driving down the cost of batteries.
Along with battery cost, driving range, charging time and access to charging infrastructure remain issues for EVs. How are you trying to solve those?
That’s another area that our RD team is working on because batteries are a bunch of trade-offs. We could optimize around fast charge and get you a five-minute charge vehicle today if you wanted that, but it would have lower range.
It’s all these trade-offs. Which one do we want to go with? Ideally what we want is a battery without the trade-off. We want the five-minute to 10-minute charge and we want the 300-mile driving range. Those are some of the things we’re working on with our R&D team. And we’ve got some unique technologies, actually IP that GM owns, that will enable us to get there.
The more challenging part is actually not the battery cell, it’s the charging station. Because right now a 350 kilowatt station is the highest you can get out there. What you need is closer to a megawatt for charging stations. But building those is hard. You need a lot of electricity. These are things we’re working on.
What Else We’re Reading
The United States earned the dubious distinction of being the world’s largest generator of waste. Despite having less than 5% of the global population, Statista estimates Americans produce over 12% of the planet’s municipal solid waste. In fact, Americans produce three times as much waste per capita as Chinese citizens and are the only country that generates more waste than it recycles. (Forbes)
Global investment in low-carbon energy transition exceeded $2 trillion for the first time last year, a report by BloombergNEF showed. Countries around the world are investing in and developing cleaner sources of power and infrastructure to meet climate targets under the Paris Agreement but many experts say the pace is not fast enough. (Reuters)
Scientists are racing to learn what L.A.’s deadly fires have done to the sea. Ash from the fires has been detected 100 miles offshore and public health officials are urging people to avoid several miles of beaches as recent rains wash contaminants into the sea. (The Los Angeles Times)
Global sales of fully electric and plug-in hybrid vehicles will rise by at least 17% this year to over 20 million cars, helped by an extension of China’s auto trade-in subsidies, according to a forecast by research firm Rho Motion. Europe, the world’s second-biggest EV market, will return to sales growth as CO2 emission targets come into effect and cheaper models become available, but the pace will remain slower than in 2023. (Reuters)
Following a spate of fires at battery storage facilities across California, the state’s Public Utilities Commission is establishing new standards for maintaining and operating them. If passed, the proposal also increases oversight for emergency response at energy storage sites that use batteries. (San Diego Union-Tribune)
A third of the Arctic’s tundra, forests and wetlands have become a source of carbon emissions, a new study has found, as global heating ends thousands of years of carbon storage in parts of the frozen north. (The Guardian)
