On Thursday evening, New York Senator Chuck Schumer announced that he is preparing a $454 billion plan to switch approximately 25 percent of the U.S. vehicle fleet, or 63 million vehicles, away from conventional internal combustion engine (ICE) vehicles to electric vehicles (EVs) within 10 years.
Unveiled by Sen. Schumer in a New York Times op-ed, the plan involves awarding $392 billion in subsidies for drivers to trade in their ICE cars—provided they are at least eight years old—for an American-made electric alternative. To incentivize the switch, the plan will provide rebates of at least $3,000 to motorists.
As explained in the op-ed, Sen. Schumer’s plan rests on three core pillars. The first, as outlined above, is to provide a large discount on an American-made EV in return for trading in a gasoline-powered car. “In total,” he writes, “these discounts should result in 63 million fewer gas-powered cars on the road by 2030.”
The plan is similar in approach to the ‘Cash for Clunkers’ program instituted in 2009, a $3 billion initiative that provided a stimulus to beleaguered automakers by encouraging drivers to trade in older, less-efficient cars for newer models.
The second pillar in Sen. Schumer’s plan is to make EVs and the necessary charging infrastructure accessible to consumers across the United States, no matter where they live or work. To achieve this, Sen. Schumer proposes to provide grants to states and cities to build charging stations, with a particular focus on underserved communities such as low-income areas or rural districts.
Finally, Sen. Schumer’s proposal aims to establish the United States as the global leader in the EV supply chain. To accomplish this, the plan proposes to offer grants to turn manufacturing plants across the country into factories that specialize in the manufacturing of EVs and batteries.
Sen. Schumer’s plan comes at a time in which the transportation industry stands on the cusp of a technological revolution. Recognizing that their future lies away from traditional ICE vehicles, automakers are spending heavily in anticipation of an electrified and digitized future. At the same time, this plan also arrives as China continues to take a commanding lead in the still-nascent EV industry, seeking to capture the entire supply chain—from minerals to markets—as part of a strategic plan from Beijing to undermine U.S. global authority.
The program has reportedly earned praise from a diverse array of stakeholders, from environmentalist groups like the Natural Resources Defense Council and Sierra Club to unions including the United Autoworkers and International Brotherhood of Electrical Workers, as well as automakers like Ford and GM. In Reuters, GM praised the effort to “advance electrification through much-needed infrastructure investments, consumer incentives and promotion of American electric vehicle manufacturing.”
Yet while Sen. Schumer believes this combination of support for the plan gives it a “real good chance” of passing, much of its success hinges on the Democrats retaking the Senate—an outcome that is far from certain. Additionally, the program is primarily climate-focused, making it an unappealing prospect for congressional Republicans.
The economic and national security benefits of any plan to jump-start mass vehicle electrification are frequently compelling
However, the economic and national security benefits of any plan to jump-start mass vehicle electrification are frequently compelling.
Currently, the United States is the largest oil consumer in the world, accounting for one-fifth of daily global supply. More than 70 percent of this oil is used to power a transportation system that is 92 percent dependent on petroleum-based fuels that power ICE vehicles. This extreme reliance stresses the economy in a variety of ways: When oil prices spike, business and consumers are stranded and household budgets are stretched, leaving Americans with nowhere to turn. When oil prices are too low, the domestic energy industry suffers and vital upstream investment is deferred.
The recent increase in domestic production has certainly aided U.S. energy security by reducing our imports, but the continued dependence on oil means the United States is not shielded from events in oil-producing regions worldwide. It is this reliance on oil to power our economy that forces the U.S. military to shoulder the burden of securing global oil supply lines, at a cost of at least $81 billion per year—and is why the United States has deployed 1,800 more troops to Saudi Arabia in the wake of the September 14 attack on Saudi Aramco’s globally-important Abqaiq oil processing facility.
The path to true energy security in the long term lies in reducing U.S. oil dependence, and requires demand-side measures such as greater fuel choice. To achieve this, we must not only decouple the U.S. economy from oil, but also scale up our domestic EV industry to counter Chinese efforts to dominate the industry at American expense.
The impending transportation revolution gives the United States a once-in-a-lifetime opportunity to make meaningful energy security gains by significantly reducing our dependence on oil. We cannot afford to squander this by switching our reliance on an unstable oil market to a dependence on China for our future transportation needs.
Twitter
