On August 5, 2021, the White House announced that President Biden will sign an Executive Order that sets an ambitious new target to make half of all new vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric, or fuel cell electric vehicles. President Biden was joined in the announcement by executives from General Motors, Ford and Stellantis, which have separately announced that 40%-50% of their vehicle sales will be electric by the end of this decade.
The elephant in the room, of course, is how do you make that happen? The even bigger elephant is how do you ensure that the batteries that power those vehicles will be made in the United States?
The White House announcement outlines four approaches:
- Installing the first-ever national network of electric vehicle charging stations.
- Delivering point-of-sale consumer incentives to spur U.S. manufacturing and union jobs.
- Financing the retooling and expansion of the full domestic manufacturing supply chain.
- Innovating the next generation of clean technologies to maintain our competitive edge.
All four approaches will be helpful. Installing vehicle charging stations will make electric vehicles more attractive to consumers by reducing range anxiety. This approach seems to have political support, as the Bipartisan Infrastructure Deal which seems to be working its way through Congress includes $7.5 billion in funding for this purpose.
Supporting innovation and the retooling of the full domestic manufacturing supply chain (presumably with government grants and loans) will also be helpful. But this approach risks falling into the ARRA trap of 2009-10, which invested a lot of public money into infrastructure that the market did not ultimately support.
The single most important thing the federal government can do to ensure U.S. leadership in critical advanced battery technology is to make sure that there is a vibrant, early market for that technology in the United States. For all the hand-wringing about Chinese leadership in battery manufacturing, it is worthwhile remembering that the Chinese did not get that leadership because they out-innovated or out-smarted the United States. The Chinese got and continue to hold that leadership because the Chinese government made sure that there was a vibrant, early market for advanced battery technology in China that only Chinese manufacturers could reliably access.
If the United States wants to gain leadership in advanced battery technology and manufacturing, it simply needs to do what the Chinese have done in China. There is no magic or complexity to the formula for success.
Unfortunately, incenting consumer purchases of electric vehicles and other advanced battery-powered technologies (approach #2 of the Biden Administration, summarized above) is the most politically problematic of all the approaches. American consumers are still largely skeptical of electric vehicle technology and the whole subject of vehicle electrification has become unfortunately politicized. As a consequence, the Bipartisan Infrastructure Deal does not contain any meaningful consumer incentives for electric vehicle procurement.
While it may be easy to blame Congress for failing to seize an opportunity, the reality is that Congress cannot get much ahead of its constituents. It falls to the battery industry, not Congress or the Administration, to explain to the American public why battery technology will be so important to their future and why buying advanced battery-powered technologies today is practical and makes sense. We as an industry need to re-double our public outreach efforts in the year ahead if we want to make meaningful consumer incentives for U.S.-made advanced batteries a reality.