Leading carmakers say President Joe Biden’s electric vehicle initiative is overambitious and doomed to fail. Battery-electric vehicles are still too expensive for a majority of the market, major automakers say, with most EV drivers taking up to 10 years to break even on their purchase.
President Biden based part of his campaign on electrifying America’s transportation sector and passed legislation that would invest billions of dollars into the development of EV infrastructure and EV purchase incentives soon after he came into office. The Biden administration has also committed to investing $2 billion to speed up domestic electric vehicle production.
Automakers have also invested billions of dollars into building new EV models and electrifying their existing lineups, with several carmakers pledging to completely stop selling internal combustion engine-powered cars over the next couple of decades. However, comments from several auto industry executives and industry reports indicate that current electrification plans are too optimistic.
Electric vehicles are more expensive than traditional cars, and EV drivers have to either use an insufficient and often unreliable public-charging infrastructure or shell out thousands more to install private charging stations. With a significant portion of the American population currently grappling with inflation and increased cost of living, electric vehicle sales likely won’t be increasing in the near future.
EVs still make up less than 10% of the car market, and EV adoption rates in the United States simply aren’t high enough to meet the Biden administration’s EV plans. Toyota Group VP Tom Stricker said that current electrification targets are unfeasible, explaining that they underestimate the challenges involved in accessing EV battery minerals and the fact that the United States neither mines nor refines any EV battery metals. Stricker said that the auto industry will need more time to invest in developing electric vehicles and building up its capacity for battery production.
Furthermore, it will take time for the market to mature and the country to develop reliable nationwide charging infrastructure. Carmaker Stellantis also noted that the proposed timeline of transition did not account for the challenges involved in building an operational electric vehicle market from scratch.
Recent research has also shown that although EVs are said to be cheaper to run over the long-term compared to traditional cars because of tax incentives and cheaper charging costs, it can take EV owners up to 10 years to break even.
However, it may not be as doom and gloom as some EV executives think. The recent price cuts by electric vehicle industry leader Tesla Inc. (NASDAQ: TSLA) and the battery-tech innovations suggest that these vehicles will become more affordable as the years go by, which will accelerate EV penetration.
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