Let’s not put all our cars in the EV basket

In 1900, one-third of the 8,000 vehicles on American roads were battery electric (EV). Today, about one-half of 1 percent of 276 million operating vehicles are battery electric. However, every major automobile company in the U.S. and abroad is now manufacturing, or planning to produce, electric vehicles. 

The Biden administration sees EVs as the future of ground transportation and a critical component of a strategy to lower greenhouse gas emissions. To this end, it wants to spend $174 billion on EV investments, including 500,000 charging stations and vehicle purchase incentives.  In addition, Senate Majority Leader Chuck Schumer (D-N.Y.) wants Congress to approve $392 billion for 10 years of tax credits and vouchers for those who replace gasoline-powered vehicles with EVs.    

If the past is prologue, the bulk of these credits and subsidies will go to high-income families.   For example, a 2014 Internal Revenue Service study of existing EV subsidies found that the biggest beneficiaries were households with adjusted gross incomes of at least $100,000. Only 1 percent went to households earning less than $50,000.

Policymakers should think twice about putting all future cars and light trucks in the EV basket.  First, it’s not clear that “zero-emission vehicles” are environmentally benign, mainly because electric cars use far more critical minerals — lithium, cobalt, graphite, copper, nickel and rare-earths — than those powered by internal combustion engines. According to a recent report by the International Energy Agency, a typical electric vehicle requires six times the mineral inputs of a conventional car. Producing the battery for an electric car can emit almost a quarter of the greenhouse gases that a gasoline car will emit across its entire lifetime. What is more, the mining of these energy transition materials (ETMs) is energy and water intensive and occurs primarily in areas of high water stress, posing contamination risks through acid mine drainage, wastewater discharge, and the disposal of tailings.

Today, the bulk of ETMs are produced and processed abroad, with China alone controlling virtually all the critical minerals used in battery production. Of the 136 lithium-ion battery plants in the pipeline to 2029, 101 are based in China. Though the U.S. has some of the world’s largest lithium reserves, only one mine is currently in operation, producing less than 2 percent of the world’s supply. Projects to mine lithium from the Salton Sea in California and a dormant volcano in northern Nevada have met with pushback from Native Americans, ranchers and environmentalists. So heavy dependence on imports of the metals used to build electric vehicles will likely continue.  

With the ongoing hype over electric vehicles, hybrid-electrics and hydrogen fuel cells have been virtually ignored. Hybrids, which have been in use since 1997, pair a gasoline engine with a separate electric motor. The on-board battery is relatively small and can be charged by the engine or the power generated when the vehicle is coasting or braking. Fuel economy is typically twice that of a conventional car. Nearly 6 million hybrid electric automobiles and sport utility vehicles have been sold in the country through 2020, dwarfing the number of plug-in electrics. 

Hydrogen fuel cells are another promising technology. Put simply, a fuel cell combines hydrogen and oxygen to produce electricity through an electrochemical reaction. Because the byproducts are only water and heat, there are no carbon emissions. Small-scale fuel cells have been used by some automobile manufacturers for more than a decade, and Daimler plans to replace diesel with hydrogen in its heavy trucks within 15 years.   

Toyota, Hyundai and Honda currently sell vehicles that combine hydrogen and oxygen to generate electricity which powers the drive train. But unlike battery electric vehicles, fuel cell cars boast driving ranges comparable to those of gasoline or diesel vehicles, 300 to 350 miles.  Average mileage per gallon for fuel cell cars is 58, compared to 23 for gasoline-powered cars. Refueling can be done in less than 10 minutes, whereas it can take several hours to recharge a battery powered vehicle. The only negative, at present, is the limited number of fueling stations selling pressurized hydrogen.

Finally, the internal combustion engine gets a bad rap. Personal vehicles powered by gasoline and diesel account for less than 10 percent of all greenhouse gas emissions in the U.S., and that percentage continues to fall as both American and foreign car manufacturers focus on improving fuel economy to reduce tailpipe emissions.

Focusing on a single transportation mode such as EVs may discourage innovation and competition that can bring about greater reductions in greenhouse gas emissions at a lower cost.  If the ultimate policy goal is improved air quality, mandating vehicle electrification may, ironically, turn out to be both inefficient and expensive.

Bernard L. Weinstein is an emeritus professor of applied economics at the University of North Texas and a fellow of Goodenough College in London.