Traditionalists, naysayers and fair-minded experts in and around the car business have seen this before. They’ve seen the ebb and flow of the promise of electric vehicles (EVs) for decades. And they largely remain skeptical.
Skeptical because they’ve seen EVs come and go and come and go again. EVs, in fact, have been the next big thing for decades. Thus, they do not get much of a charge out of the current energy around EVs.
So, why are they wrong? What’s different now? Why should we trust that Volkswagen, General Motors, Tesla and others have it right this time – that going all-in on EVs is now a trusted play, as it has not been ever before?
I believe this is not a technical challenge, though issues around battery technology remain daunting. Carmakers still need to overcome the battery problem: heat, range and efficiency, durability, cost and sourcing. By sourcing, I specifically mean the many environmental issues associated with mining the raw materials batteries require. Nickel, lithium, copper and the rest do not come easily or cleanly out of the ground.
As one Nature study notes, “We find that in a lithium nickel cobalt manganese oxide dominated battery scenario, demand is estimated to increase by factors of 18–20 for lithium, 17–19 for cobalt, 28–31 for nickel, and 15–20 for most other materials from 2020 to 2050, requiring a drastic expansion of lithium, cobalt, and nickel supply chains and likely additional resource discovery.”
The auto industry and its suppliers, however, have spent a century proving they can overcome enormous obstacles. But only if the right economic, societal and, most of all, political conditions are in place.
What makes this moment in time for EVs different than in the past is this: the right societal and political conditions exist to make the shift to EVs a reality. By that I mean, the three largest economies in the world are now being led by political leaders who plan to drive this EV push.
China and the European Union, with the United Kingdom both in and out, have been on side with EVs and a broader green shift for a while now. The United States, with the election of the Biden administration and a fully Democratic Congress, is on board, too.
Leadership, as history teaches, is everything in war, politics and business. Joe Biden, elected in part on a green platform, has firmly aligned himself with a wholesale move to policies that rebuild the U.S. economy and infrastructure in a world desperate to deal effectively with climate change.
Biden campaigned on a Green New Deal in all but name, then tipped his hand on how it would be realized with the appointment of Brian Deese to head the National Economic Council in his administration. As Ezra Klein points out in The New York Times, Deese is the “climate wonk..in charge of the nerve center of White House economic policymaking. A young phenom from the Obama administration, Deese has, apparently, held sway with Biden in discussions on “the scale of the climate disaster, and the speed at which it must be addressed.” Government must intervene now in ways not unlike what you’d expect in a global depression or a world war.
“If you think across the big systems in our country — the transportation system being one, the power and energy system being another — in order to actually solve climate change, we’re going to have to transform those systems,” Deese told The Times.
Klein argues that “Biden and his team see this as fundamentally a political problem” and if Biden knows anything, he knows politics. Unlike, say, the current Liberal crew in Ottawa, Biden’s team believes a carbon tax is a political non-starter as a tool to address climate change. Carbon taxes, as we’ve seen in Canada, are polarizing. It may seem reasonable and even intellectually justified to put a price on carbon, but it’s unsellable to too broad a swath of voters.
Deese tells Klein that instead of trying to convince voters and consumers of the nobility of addressing climate change through taxes, penalties and targeted incentives, voters need to see and experience green initiatives that make their lives better and happier and richer.
In a nutshell, Biden and his team are not interested in taking a know-it-all, finger-wagging approach to addressing climate change. They see a green agenda as an opportunity to create wealth and well being by rebuilding the transportation, energy and power systems. Carbon taxes are a stick that will not work. But wealth-building and quality-of-life government policies and programs can be carrots that can sell to voters the value of wholesale changes that mitigate climate change.
“It has to be that Americans see and experience that the investments in building out a more resilient power grid actually improve their lives and create job opportunities for them, or their neighbors,” Deese told Klein.
Biden, over and over, argues that he sees himself as a problem-solving president, not as an idealogue. His job as president is to make the lives of Americans better, longer, more fulfilling. He will appeal to the better natures of Americans by serving their wants and needs, not lecturing them.
There is an election coming in Canada. The Liberals have already staked out their position on carbon taxes, affirmed by the Supreme Court, and splitting the electorate. Indeed, the carbon tax has made Liberal candidates unelectable west of Thunder Bay, with few exceptions.
Yet it’s not too late for the Liberals to take a page out of the Biden playbook by turning down the righteous rhetoric and instead championing a non-ideological approach to addressing climate change. Rather than make their lives more expensive with a carbon tax, why not make the lives of voters better in tangible ways that rebuild Canada and mitigate climate change.
Or the Conservatives could park their socially conservative impulses, as polarizing in Canada as the carbon tax, and instead adopt the Biden playbook. My bet is that the Biden approach will work and among other things we’ll see a flood of EVs supported by an charging infrastructure. In the U.S.
Eventually, Canada will follow. But not as a function of this coming election. But eventually.