Only one day after President Joe Biden signed an executive order on climate change establishing new tailpipe pollution regulations, General Motors made the surprising announcement that it will sell only zero-emission cars and trucks by 2035.
U.S. Rep. Debbie Dingell in November summed up the political realities facing the automobile industry: “When Joe Biden gets elected, your world will turn upside down. You have got to be at the table or else things get jammed down your throat.”
The action of other states and countries also pushed the auto industry toward electric cars. California, the world’s fifth-largest economy, will stop sales of gasoline-powered automobiles within 15 years.
Yunshi Wang, the director of the China Center for Energy and Transportation said, “The world’s shift to electric cars is based on the Chinese technological road map.”
Three months ago, Chinese policymakers ordered that most vehicles sold in China be electric by 2035. China, the world’s largest car market, accounts for a third of global sales. It is bigger than the American and Japanese auto markets combined.
During the presidency of Donald Trump, General Motors’ chief executive, Mary Bara, pushed Trump to relax Obama-era fuel economic standards. However, given Biden’s efforts to fight against climate change, Bara recognized the new political realities. Bara said on LinkedIn, “As one of the world’s largest automakers, we hope to set an example of responsible leadership in a world that is faced with climate change.”
GM executive Dane Parker said that the company was not just seeking favor with the new administration. Instead, its decision was based on the assumption that electric cars will become the best sellers. Wall Street investors have enthusiastically embraced electric cars. Tesla is worth more than General Motors, Toyota, Volkswagen and Ford combined.
Currently, less than 1% of American cars are electric. However, a seismic shift is underway. The International Energy Agency projects that the global number of battery-powered and hybrid vehicles could increase from just over 5 million to nearly 140 million by 2030.
To reach its goal, GM has committed spending $27 billion to introduce 30 electric vehicles by 2025. By then, 40% of its models will be battery-powered vehicles. By 2040, all of its factories and other facilities will be carbon neutral.
There are challenges for electric cars to go mainstream. For example, charging equipment will need to be widely accessible, convenient and economic. Biden has set a goal of building 500,000 new public chargers by 2030. However, financing this infrastructure is complicated, and will likely require public spending.
Most electric car owners now plug in their vehicles at home. While it is fairly easy for single-family homeowners to install a charger, it is far more difficult for people who live in apartments.
If every American switched over to an electric vehicle, analysts have estimated that the United States could end up using approximately 25% more electricity than currently expended. To meet the demand, utilities will need to build new power plants and upgrade their transmission networks.
On the flip side, electric vehicle supporters point out that their widespread usage will reduce the overall costs of transportation as well as lowering carbon emissions.
Transportation currently accounts annually for one-third of America’s greenhouse gas emissions
In 1953, former GM chairman and Secretary of Defense Charles Wilson said during his confirmation hearings: “I thought what was good for our country was good for General Motors, and vice versa.” Bara, like Wilson, believed that the country’s interests come first, even if they were intertwined with GM’s interests.
Stated differently, America is a mixed economy, which embraces freedom when it comes to the use of capital, but allows for government intervention for the public good.
Originally published in the Sarasota Herald-Tribune
