The EV Revolution? — When you hear about battling climate change, some of you probably think about jobs. Unfortunately, it’s not the kind of news about jobs that politicians and job seekers alike would predict.
For example, to move from only producing less than 30k EVs in 2021 to a 2026 number of a whopping 2 million per annum, the Detroit-based automaker Ford is slashing up to 8k jobs.
In order to fund the transition, internal combustion engine vehicle producers need to find the money somewhere. There’s an opportunity cost, and that means ICE vehicles need to be more profitable to automakers, which not only means more efficient production but it also means eventual price increases too.
Another major challenge is the battery supply chain for EVs. Ford just last week entered into a deal with a Chinese supplier for more battery packs which will enable them to 10x their EV production by the end of 2023.
Indeed, even Elon is struggling with batteries. Recently quoted saying, “The fundamental rate limiter for Earth transitioning to sustainable energy is how fast can you grow lithium-ion battery output per year,” Musk was cautious about committing to increased production due to significant limitations in the EV supply chain.
Chinese companies dominate the Li-ion-meets-EV battery space, as do other Chinese raw materials producers in the rare earth metals game. This limitation highlights to me the importance of both a partnership between EV makers and China as well as Western policymakers and Beijing. Without these partnerships, getting to an EV-fueled future won’t happen on schedule.
These aren’t the only challenges for EVs.
First, the electric grid in many places probably couldn’t handle an extra several thousand large appliances with relatively serious amperage draws each day in order to keep the wheels spinning in that microcosm of the local economy.
Next, the infrastructure for charging is not there. In a country with 145k gas stations, there are only like 6k EV charging stations, many of which do not guarantee receptacle or interface compatibility with your particular flavor of EV.
Elon is trying to help with an answer to that problem too. In a fiscal environment that is ripe for anyone pivoting towards green solutions, Tesla is jockeying for public dollars from federal and state governments to expand its supercharging network to accommodate non-Tesla EVs. Tesla already operates almost a quarter of EV charging stations in the United States, so this seems like a logical pivot for the EV maker.
The EV space has some political challenges to overcome, but we won’t get into those here.
The final serious challenge for the EV market is the cost of the vehicles compared to their ICE predecessors. The average cost of an EV is significantly higher than that of a traditional car or truck, and that’s hard to stomach for the average American.
With all this talk about this green revolution and a future powered by electricity, it makes me wonder: when will this future actually get here?
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