How Many Trillions Will You Pay for Electric Vehicles? Political fantasies keep crashing into automotive reality.

James FreemanJune 7, 2024 at 1:56 pm

It’s become common for some politicians to present a transition away from fossil fuels as similar to other historical transitions in which societies abandoned old energy sources in favor of new ones. But this time really is different. Consumers in previous societies embraced new technologies because they afforded easier and cheaper ways to sustain and enhance life. The contemporary mania is to abandon consumer preference and instead enforce a trade-down to uneconomical but politically favored methods of powering our lives. So it’s important to understand just how far the new government mandate and subsidy systems will travel away from economic sense.

In their stated efforts to reduce carbon emissions, 18 states (as of this writing) have approved regulations that will require all new vehicle sales to be electric vehicles (EVs) beginning in 2035. Similar mandates have been enacted for heavy trucks, which transport most goods in the country, although they will begin later. Meanwhile, the U.S. Environmental Protection Agency has introduced stringent carbon dioxide emissions standards for new vehicles, which the agency admits can only be met by automakers selling more EVs and fewer gasoline-powered vehicles.

While “make-it-so” mandates may be politically popular, physical and economic realities will ultimately prevail. The move to enforce an all-EV future, regardless of claimed environmental merits (which are hotly disputed), requires infrastructure to support it. However, that means far more than installing charging stations at home and work. Too little discussion has been devoted to the scale and cost of the infrastructure needed to deliver the electricity to those charging stations. Even if the additional electricity can be supplied, it must still be delivered—and that remains the least-discussed aspect of this new transformation.

Mr. Lesser figures “the physical infrastructure needed to support an all-EV future will entail overall costs ranging between $2 trillion and almost $4 trillion. That is before considering the impact of higher demand on the costs of materials and labor to build it all and also before considering the additional costs to build more electricity generation.” He adds:

To enable an EV future that provides the same freedom of movement we enjoy today will require massive upgrades to the entire electrical delivery system. Home chargers, which are called “Level 2” chargers, will require dedicated circuits, like electric stoves and electric clothes dryers do. The main circuit boxes in millions of older homes to which electricity is delivered will need to be upgraded.

To accommodate the increased electricity needed for EV charging (and other electrification goals), electric utilities will also have to upgrade their local distribution systems—the poles and wires running down streets—with millions of larger transformers, thousands (if not millions) of miles of larger wires, and even bigger utility poles to handle the additional weight.

On and on he goes, noting the thousands of miles of new or rewired transmission lines and the millions of tons of specialized metals involved in this proposed undertaking.

Many Americans were chuckling along with Margaret Brennan of CBS recently while listening to Transportation Secretary Pete Buttigieg try to explain why his multibillion-dollar program had resulted in so few charging stations. But nobody will be laughing if several zeroes are added to the taxpayer cost of EV virtue signals.

Speaking of the Buttigieg bumbling, some readers thought this column should have mentioned the contrast between the federal failure and the speed at which Elon Musk’s Teslahas been creating charging stations. But remember Mr. Musk is only one man and on his own cannot persuade all Americans to abandon their gas-powered cars.

The Journal’s Jennifer Hiller, Sean McLain and Ryan Felton reported last month:

Tesla’s move this week to lay off much of the team responsible for creating the largest and most successful electric-vehicle charging network in the U.S. threw the industry into a state of shock and confusion…

The upheaval comes as the EV industry struggles with sluggish sales growth and a bumpy rollout of a national highway-charging network…

Tesla has long been the bright spot in a messy charging world, outbuilding and outperforming other companies to create the closest thing the U.S. has to a national highway network, considered the linchpin to greater EV adoption. A Tesla pullback in EV charging could slow the entire U.S. market.

Even the most fervent believers in the EV dream would say we’re going to need a lot more Elon Musks. Unfortunately the giant proxy advisory firms are urging investors to mistreat the only one we currently have—by denying him compensation he’s already earned.

Even if the proxy advisors suddenly begin to behave, there is no getting around the titanic cost of this unprecedented attempt to change the way Americans get from here to there.