With gas prices swelling to and remaining at over $4/gallon in many areas of the U.S., in part due to the Russo-Ukrainian War, American consumers are searching for alternatives to their gas-guzzling cars. An increasingly promising and accessible option is buying an electric vehicle (EV) instead. What once seemed a futuristic and far-off America—one with battery-powered cars filling the streets—is becoming a more realistic possibility.
Support for EVs
While environmentally-conscious liberals have previously characterized the EV market, lower prices, government subsidies, and developing technology have given a variety of Americans sufficient reason to switch to the battery-powered option. Even in reliably-red Texas, initiatives to increase charging infrastructure and EV purchasing have recently passed with bipartisan support. Texas Senate bills 1001 and 1002 are two such examples. These bills outline plans to provide funding and registration guidelines to statewide charging networks, though a bill requiring EV owners to pay car registration fees has also been enacted. Still, if EV sales continue to rise, infrastructure to support more charging ports will likely expand as well.
Across the U.S., there are a number of monetary incentives that are currently strengthening the financial benefits of owning and driving an EV. Implementation of efficient and cost-effective EV technology—such as “solid-state” batteries that allow for faster charging and longer battery life—alongside government tax incentives are encouraging more people to opt into the EV trend.
The Inflation Reduction Act, which passed through Congress just last year, also gives electric car buyers up to $7,500 in tax credits and provides automakers with subsidies that may reduce production costs by up to $9,000 on qualifying electric models.
These financial benefits, along with the low maintenance costs and lack of reliance on the gas pump that come with owning an EV often make up for their slightly higher price tag compared to their gas-powered counterparts. Furthermore, Tesla, the undeniable leader of the EV market, has recently lowered the price of their Model 3, and many manufacturers have followed suit to remain competitive.
Politics and Trade: The Worldwide Impact of EVs
The Biden administration aims for EVs to make up at least half of new vehicle sales by 2030. But, with such increased demand, problems with procuring the resources necessary for battery production have become apparent.
Before the increased popularity of EVs in recent decades, resources like lithium were not highly sought after. Now, with electric vehicles accounting for about 30% of the global demand for lithium, EV companies have needed to ramp up extraction to keep up with demand.
In March of this year, Tesla announced its plans to build a lithium plant in Texas. According to Jose W. Fernandez, undersecretary for economic growth, energy, and the environment at the State Department, the U.S. lithium supply must increase by 42 times its current amount by 2050 if the Biden administration wants to fulfill its goal of transitioning to cleaner energy.
With the vast majority of battery resources like lithium and cobalt currently imported from outside of the U.S., activists have raised concerns about the prospect of procuring minerals from countries with few environmental and ethical regulations. After receiving heavy criticism on their cobalt supply chain in the Democratic Republic of the Congo earlier this year, Tesla published a report detailing its efforts to move towards more ethical and environmentally-conscious practices. Still, the U.S. government has been pushing for domestic resource extraction by only providing tax cuts to vehicles made partially with American materials and attempting to expedite the permitting process for new extraction sites.
America’s biggest competitor in electric vehicle production, by far, is China. By 2030, China is projected to produce more than two-thirds of the world’s electric vehicle batteries, and the rest of the world isn’t likely to catch up anytime soon.
Not only does China control 28% of the world’s lithium, but they have also used their $130 billion research budget to develop the best electric car battery on the market. Their lithium iron phosphate (LFP) batteries are cheaper and better at storing energy than the nickel manganese cobalt (NMC) batteries widely used in the U.S. The capabilities of LFP batteries solve a lot of the qualms that consumers have with EVs, such as their short battery life.
Because China has such a strong hold on the EV battery market, it would be exceptionally difficult for the U.S. to successfully produce more EVs without relying heavily on Chinese resources and technology in the future.
Outlook for EVs in the U.S. Marketplace
Despite China’s influence on the EV market, EVs are still advantageous for the U.S. government because of the decreased reliance on foreign oil that they necessitate. Considering the U.S.’s historically tumultuous relationship with oil-producing countries in the Middle East—as made especially apparent in the recent and drastic Saudi Arabian oil production cuts—increased EV use seems like it could be part of the solution to growing oil prices.
According to Kelley Blue Book, EV sales rose 66% just last year. Moreover, after this year’s first quarter, electric vehicles make up more than 7% of the total U.S. car market. With more accessible pricing, more efficient technology, and less reliance on oil, electric vehicles may very well be the future of American transportation.