The Fuse

U.S. Losing Ground In CASE Race

by Alex Adams | @alexjhadams | August 19, 2020

The transportation sector is on the cusp of a worldwide shift from today’s conventional gasoline vehicles to a future that is connected, autonomous, shared and electric (CASE). Governments and automakers have invested billions of dollars—and are poised to spend hundreds of billions more—in preparation for this transition.

“The U.S. is falling further and further behind the rest of the world’s major auto markets in the transition to EVs.”

However, American dominance in this emerging market is far from guaranteed. And as former EPA Office of Transportation Air Quality director Margo Oge and International Council on Clean Transportation executive director Drew Kodjak note in a recent op-ed in The Hill, “The U.S. is falling further and further behind the rest of the world’s major auto markets in the transition to EVs.”

Analysis of stimulus spending elsewhere in the world reveals the United States is lagging behind as others invest in preparation for this CASE future. Stringent EU rules have resulted in countries like Germany and France including increased EV incentives in stimulus spending packages, whereas EV sales in the United States are anticipated to remain flat without additional policies. “I don’t think, as a matter of public policy, the United States has really gotten behind electrification and EVs,” James Chen, vice president of public policy at U.S. EV manufacturer Rivian, said in an interview for Political Climate.

Companies in other countries are already leading innovation in critical areas. For example, China-based CATL, one of the world’s biggest EV battery manufacturers, has announced it is developing a battery that contains neither nickel nor cobalt—two of the strategic minerals critical for current EV batteries. Tesla CEO Elon Musk, in particular, has urged mining companies to produce more nickel as the current cost of batteries hinders the automaker’s growth.

A solution to this problem can be found in federal government support.

A solution to this problem can be found in federal government support. As part of its Advanced Technology Vehicles Manufacturing Loan Program (ATVM), the U.S. Department of Energy loaned Tesla $465 million in 2010 to develop its Model S. This financial support has created a global market leader in EVs, overtaking traditional automakers in the race to develop these vehicles.

Beyond Tesla, the ATVM program has contributed to a total of 17 facilities being built or retrofitted in nine states, leading to the direct employment of 38,000 Americans in automotive manufacturing. The program has resulted in an annual reduction of 282 million gallons of gasoline consumed, and 98 percent of the loans have been paid back—with interest.

Expansion of such programs is critical if the United States wishes to remain in the race to lead in CASE development, deployment and commercialization. As noted in its recent Get America Moving Again (GAMA) report, SAFE called for the expansion of the ATVM program beyond light-duty vehicles into medium- and heavy-duty EVs to jump-start the development of commercial truck electrification.

In addition, GAMA also recommends expanding the oversubscribed Low- or No- Emission Vehicle Grant Program, which will expedite the transition of the nation’s fleet of 49,000 transit buses to electric versions or alternative fuels. The FY 2019 grant solicitation received applications for 157 projects requesting a total of $500 million but funded just 38 projects for $84.95 million, demonstrating significant unmet demand for the program.

Electrifying our nation’s vehicle fleet, from light-duty vehicles through medium- and heavy-duty trucks, promise greater energy security by further reducing American reliance on oil. But an equally important consequence of engaging federal support to bolster U.S. CASE development will be to help position the United States as a leader in the next generation of transportation.