Electric vehicles (EVs) faced intense criticism during the recent Republican debate and in a speech given by former President Donald Trump near Detroit. While some of the claims lacked coherence, others raised valid concerns. One thing is clear: the EV industry must address its challenges, as it appears that Republicans harbor animosity towards electric vehicles.
President Trump declared, "If you want to buy an electric car, that's absolutely fine. I am all for it. But we should not be forcing consumers to buy electric vehicles." It is important to note that no one is actually compelled to purchase an EV. However, various environmental regulations and consumer subsidies heavily favor electric vehicles.
Originally, subsidies were implemented to bridge the purchasing cost gap between EVs and traditional gasoline-powered cars. As battery costs continue to decline, these subsidies should become unnecessary. In fact, industry experts predict that upfront costs for EVs will be comparable to those of traditional cars within a few years.
The Environmental Impact of the Oil Industry vs the Battery Industry
One often overlooked fact is that the extraction of oil for gasoline also causes significant environmental damage. While much attention is given to the environmental impact of the battery industry, it is important to recognize that the oil industry is approximately 40 times larger than the combined copper, aluminum, cobalt, and lithium industries. Furthermore, these metals have a wide range of applications beyond just batteries.
Contrary to popular belief, the dominance of China in battery material processing is not as significant as it may seem. Mining of battery materials takes place all over the world, with numerous companies involved in the process. Additionally, there is a shift in progress towards local production of batteries and battery components, as encouraged by the Inflation Reduction Act.
One of the key advantages of establishing local battery plants is the employment opportunities they provide. With approximately 2,500 workers per plant, the growth in battery capacity announced in the U.S. is expected to power around 10 million to 13 million electric vehicles (EVs) annually by 2030. This represents a significant increase from the 2022 levels, marking a 20-fold expansion.
While it is essential to address the debate surrounding the realities of the EV industry, Ford, GM, and Tesla (TSLA) are primarily focused on gaining support from Republicans. The lack of Republican backing poses a major challenge for the EV industry, as it could result in unprofitable and undersized EV businesses alongside declining gasoline-based operations.
To combat this, auto manufacturers must pursue all legal avenues to win over Republicans. Collaboration on marketing strategies, purchase incentives, free charging options, lease subsidies, and even political contributions should all be on the table. The goal is to remove any political bias from EVs and ensure their widespread acceptance.
Despite recent negative political press, Tesla's stocks remain unaffected, with a 2.1% increase in late trading on Thursday. In comparison, the S&P 500 and Nasdaq Composite show smaller gains at 0.6% and 0.8% respectively.
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