Government’s EV push may actually increase emissions

By Matthew Lau of The Fraser Institute. 

"In Canada, government efforts to reorganize the automobile industry from the top down, supposedly to save the world from global warming, include heavy subsidization of electric vehicles (EVs), almost $30 billion in handouts to two manufacturers to keep battery plants in Ontario, significant spending on EV infrastructure, and plans to ban sales of gasoline powered cars by 2035. The subsidies and handouts are already burning taxpayers and consumers; the forthcoming ban will be at least as painful.

Besides Canada, many other countries and jurisdictions are imposing their own prohibitions on internal combustion engines in the next decade or so. But as Mark P. Mills, a senior fellow at the Manhattan Institute, lays bare in a recent study, the mandates will be economically disastrous and the environmental benefit are dubious. “Bans on conventionally powered vehicles,” he writes, “will lead to draconian impediments to affordable and convenient driving and a massive misallocation of capital in the world’s $4 trillion automotive industry.”

Even with significant government incentives to bend consumers to buy EVs, Mills notes it took two years for Ford’s electric Mustang Mach-E to reach 150,000 sales. By comparison, when Ford introduced its 1964 Mustang, it sold one million within 18 months. While EVs are a compelling choice for many consumers, their rate of adoption would have to far surpass anything seen historically to reach government objectives.

Specifically, Mills writes, “in service of government climate strategies to achieve radical emissions reductions, consumers will need to adopt EVs at a scale and velocity 10 times greater and faster than the introduction of any new model of car in history.” This is not something likely to occur due to consumer preferences; politicians will have to browbeat millions of people into buying cars they do not really want through taxes, subsidies and mandates. Thus the forthcoming prohibitions.

The government project to mandate EVs is also fraught with shaky and uncertain economics. As Mills points out, “no one knows when or whether EVs will reach economic parity with the cars that most people drive” because “for the majority of drivers, there’s no visibility for when, if ever, EVs will reach parity in cost and fueling convenience, regardless of subsidies.” The price of EVs is determined largely by the costs of critical materials including a wide range of minerals mined mainly in foreign countries.

Finally, Mills argues the environmental benefits of EV mandates are doubtful. “No one knows how much, if at all, CO2 emissions will decline as EV use rises,” he writes, due to uncertainties in the emissions in EV production. “Those emissions substantially offset reductions from avoiding gasoline and, as the demand for battery minerals explodes, the net reductions will shrink, may vanish, and could even lead to a net increase in emissions.”

New York Times columnist Peter Coy recently raised similar concerns. Partly due to increasing battery sizes to satisfy consumers, EVs are consuming huge quantities of materials and their prices are trending up, not down. Moreover, due to their emissions-intensive production, EVs must travel 28,000 to 68,000 miles before they’re more greenhouse gas-efficient than conventional gasoline-powered cars, eroding their environmental benefits.

Electric vehicles may be a good choice for some people. The evidence clearly shows, however, the tens of billions of dollars in government subsidies are financially impoverishing, and the government’s compulsion of consumers to buy such vehicles when they prefer conventional gasoline powered cars is an overreach with little to no compensating environmental benefit."