The complicated economics of electric vehicles (2022)

Make Me Smart August 08, 2022 transcript

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Kimberly Adams: Let’s do it.

Meghan McCarty Carino: All right, let’s do it

Kimberly Adams: Hello, everyone I am Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense. And we are back after our little break.

Meghan McCarty Carino: Yep, I’m Meghan McCarty Carino, I’m here for Kai Ryssdal today. Thank you so much for joining us this Monday, the first Monday after a little hiatus last week. We’re gonna, you know, do the news, share a couple make me smiles, the usual. So let’s start with the news fix.

Kimberly Adams: Yeah, but before we get into that, I just want to say, thank you so much to everybody who sent the notes of condolences about my uncle, like y’all are amazing. And I shared a lot of those with my uncle, he got a ton himself. And so just wanted to say thank you everyone for being so kind and generous and thoughtful. And I know it really lifted him up. So that was really sweet of everybody. Yeah. Um, but my news fix is this just stunning article in The Atlantic, about the family separation policy under the Trump administration. And it’s – you know, I don’t like using these sort of like weird journalistic idioms and throw aways and cliches, but tour de force, all the things. Caitlin Dickerson has been reporting this for more, I think like a year and a half, she was on our show a while back talking about family separations, and the fact that some of these kids are still not back with their parents. But she really gets into how this policy came about, the lies that were told, and just the levels of coldness really, where not just politicians, but sort of bureaucrats and lots of people involved in the process, just felt it was somebody else’s problem, or that it wasn’t a big enough problem to risk their careers. And these kids and their families are traumatized, and irreparably so in some cases. And so, it is an extraordinarily long article, but set some time aside to read it, it is worth it. I know Caitlin worked super hard on it. And I know her personally, and I can speak to her being a stellar reporter, and it’s just worth knowing how things can go so terribly wrong, and unpacking all the things that led up to it, ideally, so it doesn’t happen again. But I guess we will see.

Meghan McCarty Carino: That was really nice. I mean, I only got, I don’t know, maybe a 1/10 of the way through? This is a multi-chapter, it’s a huge, huge project. I started checking it out today. But just, I mean, it requires that level of investment, you know, as an investigation, as a reader, just to try to wrap your head around. This is a huge system that did this thing, you know, that had such dire ramifications for families, and how a system kind of did that, understanding the full system at all levels, and the planning that went into it, despite what appeared from the outside to often be just chaos, and the intentions that went into it, and then just sort of the, you know – yeah, as you said, all of the tiers of decisions that were made by so many different, you know, levels of people in this system that kind of enabled this to happen.

(Video) The economics of electric vehicles - Romeo Danielis

Kimberly Adams: Yeah, so again, go read it. And you know, it takes some time but worth it. What about you, Megan, what do you have?

Meghan McCarty Carino: Alright, well, I thought I would take a look at this little climate bill, since y’all were off Last week. I was particularly interested in the electric vehicle section of it, I think this is probably, you know, the bite of this almost $400 billion climate bill that the Senate passed last night. I think this is kind of one of the most digestible parts and the parts that are going to seem the most immediately impactful for your average person, you know. It’s kind of making electric vehicles more affordable, because they have been quite unaffordable up to now. And that’s for a lot of different reasons. You know, part of it is kind of the technology side, they are more expensive to produce than internal combustion engines and all these various things. So this bill reinstates tax credits for all kinds of new clean-air vehicles, and I say clean-air vehicles, because it also includes not only electric vehicles, but I believe hydrogen fuel cell vehicles as well, you know, any other kind of clean, zero-emission vehicle. So the $7,500 tax credit that has been available for new clean-air vehicles, would get reinstated for all the vehicles, all new vehicles, you know, with kind of a sunset date, which had been phasing out for the early adopters, Tesla, GM, Toyota, I think Nissan, you know, they had already had to start phasing out those tax credits, because they had sold over the 200,000 units. That was kind of the initial thing, was you saw this money, and then the tax credits start scaling back. So it was kind of penalizing, you know, kind of like the winners, the front runners in the race for electric vehicles and – oh geez, sorry, there’s some sirens going by, of course. But that is life these days. But um, yeah, so, $7,500 for new cars, including all of those cars that no longer have the tax credit. And then for the first time, $4,000, or 30% of the purchasing price of used electric vehicles, which is totally new. And there is of course, like, a big used electric vehicle market that used to be that you couldn’t get any tax credit for. So this is kind of a big deal. Of course, there are still some very big barriers for kind of mass adoption of electric vehicles, and especially among lower-income folks. And I would honestly say even, you know, middle-income folks. So I have an EV – I’m one of those annoying people that’s like, well, I have an EV. So let me tell you about it.

Kimberly Adams: That’s not annoying, come on. I think there was definitely a time when it was just like, Oh, you have an EV.

Meghan McCarty Carino: Yeah, that’s my identity.

Kimberly Adams: But it’s more common now. It’s like, I know people from tree huggers to hardcore conservatives who have EVs at this point, and –

Meghan McCarty Carino: Especially at this point, yeah, gas prices. Okay, good. Then I’ve been given permission to be that annoying person by Kimberley. But no, so I have an EV and when I purchased it, my life conditions were very different. I went to work in an office. I live in a small four-unit multi-unit apartment building, and we do not qualify for any kind of commercial incentives for our landlord to install a charger. I do actually have off street parking but we can’t install any kind of charger. Even a trickle charger, even you know just something that I could plug in a normal outlet, so I cannot charge at home at all. I depend entirely on public chargers. I had been depending on charging at work but since I seldom go in there. So I mean this is obviously a huge problem for so many people. I mean the majority of people in most cities don’t have off street parking, don’t have their own personal garage where they can install a charger. And charging at home, charging overnight, when your car is sitting there, that is the best time to charge the car. I use public chargers I’m able to get by. It’s not ideal. You know, I have to go, like set aside of half a day, go to a public charger or somewhere and then go shopping or something. Also not good for my wallet. So that’s a big barrier still for lower income communities. And then one of the issues with the climate bill that has been brought up by some experts is the – in order to meet the requirements in the bill, to qualify for these tax credits, automakers need to have basically a domestic supply chain for their battery production, for the car production, you know, it’s supposed to incentivize –

Kimberly Adams: Which is really hard.

Meghan McCarty Carino: So hard. Yeah, I mean, that could take a really long time to set up. I think something like 80% of the battery supply chain right now is based in China, and so trying to move away from that is going to take some time, but the bill requires that it happened by 2023, in order to qualify. So basically, right now, none of the car makers would qualify for these tax credits. So it gets tricky.

(Video) Battery Chemistry and the Economics of Electric Vehicles

Kimberly Adams: It’s such a big piece of legislation. And I mean, Kai and I have spoken a lot on the show about, you know, does Congress ever get anything done. And the last couple of weeks Congress has gotten a lot done. I mean, if you think about it, we’ve got the infrastructure law a while back, we got the gun law, and then chips was signed into law with the semiconductor funding. And now this, like, this is a lot of meaningful legislation now likely to be law, that is going to fundamentally change the way our economy works. We’re talking about, you know, moving more semiconductor production here, moving more green energy production and EV production here to the United States. All of this is really big. And I think we’re going to be unpacking the economic impact of all this rush of legislation for months to come.

Meghan McCarty Carino: Absolutely.

Kimberly Adams: But for the moment to come, I think we need to smile.

Meghan McCarty Carino: Okay.

Kimberly Adams: So, this kept popping up on my feed while I was out, about the rotation of the earth, and that the earth just broke the record for the shortest day since atomic clocks were invented. I’m reading the headline from CNN, but it was in a whole bunch of places. The International Earth Rotation and Reference Systems Service, an organization that actually exists, said that on June 29, our planet’s rotation measured at 1.59 milliseconds short of the normal 24 hour day. And not only was the day a little bit shorter there, but the speed of the earth seem, Earth’s rotation seems to be increasing slightly. So every few years or so, you know, these folks have to add a leap second into our clocks, just to sort of adjust the timing to make sure a day actually matches up with the speed of the Earth’s rotation. But it seems to be getting faster. So here’s a cool stuff in the CNN article. When dinosaurs still roamed the planet 70 million years ago, a single day on Earth lasted about 23 and a half hours. Since 1820, scientists documented the Earth’s rotation slowing down. In the past few years, it began speeding up. And they give an explanation for why nobody really knows why the speed is slowing up. But one of the theories is of course, climate change. And the idea that glaciers melting at the north and south poles are literally slightly changing how roundish the Earth is, which changes the speed a tiny bit. That was that’s one of the theories.

Meghan McCarty Carino: That’s not a good make me smile.

Kimberly Adams: Yeah, I was half thinking I shouldn’t mention that. but I think the numbers are cool.

Meghan McCarty Carino: No no, I mean, that makes absolute sense.

(Video) Why Electric Cars Companies Are Lying To You

Kimberly Adams: Yes. All right. Well, yours is way more fun.

Meghan McCarty Carino: Okay, mine is very fun. So I had to do this one with you, Kimberly, because I know you love the James Webb Space Telescope. I’m sure we all do. You know, it has been bringing back these amazing images of space, the clearest images that we’ve ever seen. It’s this amazing leap forward in imaging. And a famous French physicist on Twitter tweeted a photo and said, you know, this is, I’m paraphrasing here because it was in French. He said, you know, this is the most beautiful pictures of the Proxima Centauri that we’ve ever seen. And people were retweeting it all over the place. And, and finally, he had to come clean and say, no, this was a joke. The image was actually exactly what it looks like, which was a slice of chorizo.

Kimberly Adams: And I believe he followed it up with a little warning that people should, you know, take what they see on the internet with a little bit more of a grain of salt.

Meghan McCarty Carino: A grain of, yeah, many grains of salt.

Kimberly Adams: And you know, so often when someone has like credentials we think we understand, if they’re sending something out, we’re like, well, this person seems authoritative, it must be true. But doing stuff like that also kind of undermines the ability of people who are trying to send out legit stuff to get it without there and believed without skepticism. But I think he also shared that Pinwheel Galaxy that the photos came out of also, have you seen that one?

Meghan McCarty Carino: No.

Kimberly Adams: There’s another actual real photo of James Webb Space…

Meghan McCarty Carino: It does. It looks a little bit, to me, like ox tail. Yeah. Are you sure it’s not oxtail?

(Video) How green are electric cars? | It's Complicated

Kimberly Adams: Okay, I think we’re done here. That is it for today. Join us tomorrow for a deep dive on monkey pox. What we know, what we don’t know about the latest public health emergency, how it became a crisis, and where we go from here. I was on a plane this weekend. And I was like, oh my gosh, I’m touching all of the things. And I certainly want to know more about where we stand with this.

Meghan McCarty Carino: We’ll get into it. We’ll figure it out. All right. In the meantime, send us your questions and comments, our email is makemesmart@marketplace.org. Or of course you can call and leave us a voice message. It’s 508-U-B-SMART.

Kimberly Adams: Make Me Smart is produced by Marissa Cabrera. Today’s program was engineered by Juan Carlos Torrado.

Meghan McCarty Carino: Our senior producer is Bridget Bodnar and the director of on demand is Donna Tam.

Kimberly Adams: Gonna just like not speak for the rest of the day.

Meghan McCarty Carino: Preserve the voice. It is sounding very lovely though at the moment.

Kimberly Adams: It’s like a nice gravelly tone right?

Meghan McCarty Carino: It is.

(Video) Investment Thesis for Battery Materials & the Hidden Economics of Electric Vehicles

FAQs

How electric vehicles affect the economy? ›

How electric vehicles affect the economy?

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What is the biggest challenge with electric vehicles?

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What are the disadvantages of electric vehicles?

What are the pros and cons of electric vehicles? ›

What are the pros and cons of electric vehicles?

What are the economics of electric vehicles? ›

What are the economics of electric vehicles?

How our economy is being affected by the increase of vehicles? ›

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What are the challenges of using electric vehicles at present in our country?

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What challenges do owners of electric cars face?

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Why electric vehicles are the future?

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Are electric cars a positive externality of consumption?

Videos

1. Economics: Are Electric Cars the Solution?
(Josie Cunningham)
2. Electric Vehicle Benefits Explained
(Union of Concerned Scientists)
3. Electric Cars: How Do Electric Vehicles Change the Economy?
(edX)
4. Why The EV Industry Has A Massive Supply Problem
(CNBC)
5. Synopsis of the Electric Vehicle Ecosystem
(PPFAS Mutual Fund)
6. Are Electric Cars Actually Good for the Environment?
(The Gravel Institute)

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