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John F. Floyd
This is a follow-up to last week’s discussion on total electric cars and trucks. As I stated in previous commentaries on the subject of electric vehicles, there seems to be no planning for the change from gasoline powered vehicles to all electric go-karts.
Hybrid technology is developed, tested and is a proven technology. Utilization of hybrid technology would have been a good first step in this massive and questionable change to all-electric vehicles.
The major cause of American automotive companies not taking a measured response to the manufacture of all electric vehicles is pressure from the radical left environmental movement. The radical left environmentalists think the mandate of technology is appropriate. In some small cases, technology follows demand, but most technology precedes utilization.
One major vehicle manufacturer, Toyota Motor Corporation, has taken a different view to this leap of faith transition to all-electric vehicles. A Wall Street Journal article by Christina Rogers and River Davis, quoted Toyota’s chief executive officer, Akia Toyoda, as saying, “Pursuing all-electric vehicles exclusively would be too narrow an approach for an (automaker) that sells to customers in disparate markets around the world.”
Mr. Toyoda went on to say, “There remain formidable challenges to mass-market adoption of fully electric models, including a shortage of battery materials and an undeveloped charging infrastructure. In many parts of the world, the electric grid is still lacking and roughly a billion people don’t have adequate access to electricity. Hybrid cars, such as the Toyota Prius, can serve as an important near-term solution for reducing tailpipe emissions and the focus on achieving carbon neutrality should encompass a range of vehicle technologies.”
But Toyota is more of an international supplier of vehicles than United States-based companies. Here at home, as an incentive to purchase an all-electric car or truck, the U.S. government has signed a law extending the $7,500 tax credit through 2032. The tax credit has helped to bring the total market share of EV to 6%. In September of this year, the average price for an EV is just over $60,000.
With the new Inflation Reduction Act comes mystifying stipulations concerning the material and labor content of batteries used to power the EVs.
Amara Omeokwe wrote in the Sept. 28 edition of the Wall Street Journal, “The Inflation Reduction Act stipulates at least 40% of the value of crucial battery materials, such as lithium and nickel, must have been extracted or processed in the U.S. or in countries which the U.S. has free-trade agreements, or have been re-cycled in North America. Then, at least 50% of the value of the vehicle’s battery components must have been manufactured or assembled in North America.”
The U.S. doesn’t have a definition of free-trade agreements for the purpose of tax application.
Another pitfall for some U.S. manufacturers is the battery content provisions of the Inflation Reduction Act that influences the $7,500 tax credit for electric vehicles. As it stands now, U.S. automobile companies use different companies to source EV batteries and associated components. For instance, Tesla Motors has a dedicated battery manufacturing plant domestically. One company has an agreement to manufacture batteries offshore and another automotive company is involved in a joint venture.
Dan Bowerson, senior director at the Alliance for Automotive Innovation, a trade group whose members include auto manufacturers, said, “We are going to be as clear as possible, so that everyone is looking at the same thing.”
Even though the automakers are looking at the “same thing” it doesn’t mean there will be equity. The U.S. Treasury Department will be writing the rules with input from the Energy Department and the Environmental Protection Agency.
One thing is for sure, there is very little lithium in the U.S. Lithium is a mineral that is integral to battery formulation. A company is opening lithium mines in West Virginia, but production is forecast in two years.
As I have stated, there are too many unanswered questions concerning the present government’s headlong plunge into total electric vehicles. A planned program, hybrid weighted, without the hysterics of the left would have been more advisable.
John F. Floyd is a Gadsden native who graduated from Gadsden High School in 1954. He formerly was director of United Kingdom manufacturing, Goodyear Tire & Rubber Co., vice president of manufacturing and international operations, General Tire & Rubber Co., and director of manufacturing, Chrysler Corp. He can be reached at johnfloyd538@gmail.com. The opinions reflected are his own.
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