The word “decarbonization” has become something of a buzzword in transportation policy circles. Count Ontario as having capitalized on the idea at the very beginning — when the province’s eco-friendly premier announced a so-called green jobs project to build a $3 billion national network of electric vehicle charging stations.
But not everyone saw the wisdom of that move. American Enterprise Institute Fellow William M. Easterly noted that it was “an ethically questionable action by Canada’s national government that would provide incentives for building charging stations for electric cars that do not cost much, charge infrequently, are not very efficient, and are incompatible with our rolling roadways system.”
For years, environmentalists and mainstream media experts alike have focused most of their attention on making vehicle sales go electric. Some politicians have even mentioned climate change as a reason for doing so.
Even Americans are wondering how we got here: In 2009, only 7 percent of new vehicles sold in America were electric. The most recent figures from the Census Bureau showed that electric vehicle sales, mostly plug-in hybrid and pure electric models, reached 2.8 percent of new vehicles sold in 2017. So rather than creating mass-market demand, the surge in sales has been driven mostly by government incentives — such as generous tax credits and low-interest loans.
Ontario’s push, which began with the purchase of electric vehicles and innovative charging infrastructure by car companies and brands owned by General Motors, Nissan, Ford, Toyota, and other large, innovative automakers, has seemed to offer a blueprint to other governments — especially those around the world, many of which are interested in warming up their energy grids by making significant investments in electric vehicle infrastructure.
The auto industry’s strategic commitment to plug-in hybrids and pure electric cars is clearly working. In 2018, U.S. sales of electric vehicles have reached 48,000 (double 2017’s number) while sales of pure EVs have jumped to 13,600. For two years in a row, plug-in hybrid sales have doubled, accounting for more than half of all hybrid sales in the United States last year. Ontario, with its pledged network of 400,000 charging stations, gets most of the credit for driving these electric vehicle sales.
By contrast, sales of pure plug-in hybrid and all-electric vehicles in the U.S. are projected to peak at fewer than 1 million this year, barely a fifth of the number expected in 2050.
Many have predicted that electric vehicle sales could rise to double that expected range by the middle of the next decade. But a look at the initial development of the market is disheartening. Apart from global corporations like Tesla and General Motors, other major automakers have resisted the idea of making plug-in hybrid and pure electric vehicles.
For example, Ford Motor announced in 2017 that it would discontinue all-electric models until 2022 and instead focus on “solutions that deliver affordability, fleet flexibility, vehicle reliability,” and “standards-based access.” This was shortly after GM disclosed that it was developing a battery storage system it hoped would make up 30 percent of the cost of plug-in hybrids. In response, the Society of Automotive Engineers tasked the auto industry with developing a system that would make up 80 percent of the cost of plug-in hybrids by 2025. In 2018, according to an internal Ford memo reviewed by Bloomberg, “approximately 90 percent of [Ford’s] future cars will have either hybrid powertrains or one of two ‘zero-emission’ powertrains – battery electric vehicles (BEVs) or [hydrogen] fuel cell vehicles (FCVs).”
While the auto industry’s track record in determining how to develop and price new technologies is not without its problems, it is more careful than most others that do not have a demonstrated track record in doing it. Who are we to argue with smart people who recognize new technology?
But GM and Ford have also noted that today, however well-designed a plug-in vehicle or hybrid may be, they cost tens of thousands of dollars more than their counterparts that still rely on internal combustion engines. Because of the steep cost difference, lower-cost pure EVs will remain unprofitable. In 2018, for example, 70 percent of Volts and 52 percent of LEAFs sold in the United States were leased. With such pricey plug-in vehicles, the important problem isn’t whether EV sales go up — it’s whether the world needs a new industry to manufacture electric vehicles. And that’s where