eMobility refers to the development and use of electric-powered modes of transportation, including electric vehicles (EVs), e-bikes, and e-scooters. This article focuses on the relationship between eMobility and the role of US government policy in influencing its adoption and proliferation.
Electric vehicles have a history dating back to the 19th century when inventors like Nikola Tesla were pioneering early technologies. Tesla's work on electric motors and alternating current (AC) systems laid foundational technology that would later become crucial for electric vehicles. Limited battery technology, lack of infrastructure, and the rise of cheaper gasoline cars prevented early adoption.
Fast forward to the late 20th century, the Energy Policy Act of 1992 aimed to decrease energy consumption and increase the use of renewable energy. The American Recovery and Reinvestment Act of 2009 further supported this vision by injecting capital into the clean energy sector. Additionally, the establishment of Corporate Average Fuel Economy (CAFE) standards tightened fuel economy regulations, indirectly promoting the adoption of cleaner vehicles. These policies set the stage for the modern resurgence of electric vehicles, paving the way for companies like Tesla to lead the charge in the 21st century.
To stimulate the EV market, the US government provides various federal tax credits and rebates, with additional incentives at the state level. Recent changes in tariff policy, such as President Biden's increase in tariffs on Chinese-produced EVs, underscore an effort to bolster domestic manufacturing and create jobs, impacting US-China trade dynamics.
In May 2024, Biden increased tariffs on Chinese EVs from 25% to 100%, aiming to ensure the future of electric vehicles is rooted in American production, particularly by union workers. This policy builds on tariffs imposed by former President Trump, which Biden maintained and expanded to other products like solar cells and batteries. The White House argues these tariffs, along with substantial subsidies, will develop a U.S.-based green energy supply chain and protect American jobs from the threat of cheaper Chinese EVs.
This strategy aligns with Biden's climate and jobs plans, aiming to create a domestic green energy supply chain from raw materials to finished products, with American jobs at every step. While consumer tax credits for EVs have restrictions to promote U.S. suppliers, there is bipartisan support for this protectionist approach, which contrasts with previous bipartisan support for free trade. The increased tariffs may lead Chinese automakers to build plants outside China to avoid tariffs, reflecting the global nature of the auto industry.
In August 2022, President Biden signed the Inflation Reduction Act of 2022, aligning with the Electrification Coalition's federal policy priorities. This shift to electric transportation is aimed at reducing economic, national security, and emissions impacts from oil dependence, creating jobs, saving costs, improving air quality, and reducing greenhouse gas emissions.
The introduction of the Inflation Reduction Act represents a significant federal commitment to eMobility, promising substantial investments in the sector. The National Electric Vehicle Infrastructure (NEVI) Program specifically targets the expansion of the EV charging infrastructure, which is pivotal for widespread eMobility adoption.
Despite government support, American car manufacturers, including Ford, are facing significant losses on EV sales. This raises questions about the sustainability of the electric vehicle market, suggesting it may be driven more by government incentives and cronyism than by a genuine emerging market.
Policymakers are advised to be cautious and distance themselves from what some perceive as an elite-driven attempt to reshape the vehicle market. Concerns include rising prices of non-EV vehicles and an increased supply of EVs, indicating potential challenges in the EV market. The push for EVs has been fueled, in part, by government incentives during a period of low interest rates, raising doubts about the long-term viability of the electric vehicle market.
Current incentive models face criticisms for possibly distorting the market and not adequately ensuring equitable access to eMobility. The balance between nurturing adoption rates and mitigating potential market distortion remains a delicate task for policymakers.
Shifts in government stance, often influenced by political changes, have ripple effects on the EV market and consumer confidence. The long-term trajectory of eMobility is thus closely tied to the stability and commitment of government policy.
As political landscapes evolve, the future of eMobility in the US appears to hinge on bipartisan support and the rate at which technological breakthroughs can be integrated. Predicting outcomes becomes a complex consideration of various interwoven factors.
The dance between eMobility and government policy is intricate and influential on the sustainable growth of the electric vehicle industry in the US. A strategic and consistent policy framework is therefore vital for maintaining momentum on the path to a greener, more eMobile America.
