[Senate Hearing 118-388]
[From the U.S. Government Publishing Office]
S. Hrg. 118-388
CHARGING AHEAD: THE FUTURE OF
ELECTRIC VEHICLES
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HEARING
BEFORE THE
COMMITTEE ON THE BUDGET
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
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July 31, 2024
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Printed for the use of the Committee on the Budget
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www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-442 PDF WASHINGTON : 2025
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COMMITTEE ON THE BUDGET
SHELDON WHITEHOUSE, Rhode Island, Chairman
PATTY MURRAY, Washington CHARLES E. GRASSLEY, Iowa
RON WYDEN, Oregon MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan LINDSEY O. GRAHAM, South Carolina
BERNARD SANDERS, Vermont RON JOHNSON, Wisconsin
MARK R. WARNER, Virginia MITT ROMNEY, Utah
JEFF MERKLEY, Oregon ROGER MARSHALL, Kansas
TIM KAINE, Virginia MIKE BRAUN, Indiana
CHRIS VAN HOLLEN, Maryland JOHN KENNEDY, Louisiana
BEN RAY LUJAN, New Mexico RICK SCOTT, Florida
ALEX PADILLA, California MIKE LEE, Utah
Dan Dudis, Majority Staff Director
Kolan Davis, Republican Staff Director and Chief Counsel
Mallory B. Nersesian, Chief Clerk
Alexander C. Scioscia, Hearing Clerk
C O N T E N T S
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WEDNESDAY, JULY 31, 2024
OPENING STATEMENTS BY COMMITTEE MEMBERS
Page
Senator Sheldon Whitehouse, Chairman............................. 1
Prepared Statement........................................... 43
Senator Charles E. Grassley...................................... 4
Prepared Statement........................................... 45
Senator Lindsey O. Graham........................................ 6
STATEMENTS BY COMMITTEE MEMBERS
Senator Debbie Stabenow.......................................... 17
Senator Jeff Merkley............................................. 25
Senator Mike Braun............................................... 27
Senator Tim Kaine................................................ 29
Senator Ron Johnson.............................................. 32
Senator Chris Van Hollen......................................... 34
Senator John Kennedy............................................. 36
WITNESSES
Dr. Jesse Jenkins, Assistant Professor and Macro-Scale Energy,
Systems Engineer, Department of Mechanical and Aerospace
Engineering, and the Andlinger Center for Energy and
Environment, Princeton University.............................. 8
Prepared Statement........................................... 48
Ms. Britta Gross, Director of Transportation, Electric Power
Research Institute............................................. 10
Prepared Statement........................................... 58
Ms. Maureen Hinman, Co-Founder and Chairwoman, Silverado Policy
Accelerator.................................................... 12
Prepared Statement........................................... 70
Errata....................................................... 79
Mr. Dave Schwietert, Chief Government Affairs and Policy Officer,
Alliance for Automotive Innovation............................. 13
Prepared Statement........................................... 80
Mr. Jeff Davis, Senior Fellow, Eno Center for Transportation..... 15
Prepared Statement........................................... 95
APPENDIX
Responses to post-hearing questions for the Record
Dr. Jenkins.................................................. 107
Ms. Gross.................................................... 115
Ms. Hinman................................................... 121
Mr. Schwietert............................................... 128
Mr. Davis.................................................... 131
Chart submitted by Chairman Sheldon Whitehouse................... 135
Charts submitted by Senator Lindsey O. Graham.................... 136
Chart submitted by Senator John Kennedy.......................... 139
Documents submitted for the Record by Chairman Sheldon Whitehouse 140
Document submitted for the Record by Senator Charles E. Grassley. 150
Document submitted for the Record by Senator Tim Kaine........... 153
Statements submitted for the Record by the Alliance for
Automotive Innovation.......................................... 156
CHARGING AHEAD: THE FUTURE OF ELECTRIC VEHICLES
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WEDNESDAY, JULY 31, 2024
Committee on the Budget,
U.S. Senate,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:00
a.m., in the Dirksen Senate Office Building, Room SD-608, Hon.
Sheldon Whitehouse, Chairman of the Committee, presiding.
Present: Senators Whitehouse, Stabenow, Merkley, Kaine, Van
Hollen, Grassley, Graham, Johnson, Marshall, Braun, Kennedy,
and R. Scott.
Also present: Democratic Staff: Dan Dudis, Majority Staff
Director; Kara Allen, Senior Energy and Climate Advisor, Energy
Lead.
Republican Staff: Chris Conlin, Deputy Staff Director;
Krisann Pearce, General Counsel; Jordan Pakula, Professional
Staff Member; Ryan Flynn, Budget Analyst.
Witnesses:
Dr. Jesse Jenkins, Assistant Professor and Macro-Scale
Energy Systems Engineer, Department of Mechanical and Aerospace
Engineering, and the Andlinger Center for Energy and
Environment, Princeton University
Ms. Britta Gross, Director of Transportation, Electric
Power Research Institute
Ms. Maureen Hinman, Co-Founder and Chairwoman, Silverado
Policy Accelerator
Mr. Dave Schwietert, Chief Government Affairs and Policy
Officer, Alliance for Automotive Innovation
Mr. Jeff Davis, Senior Fellow, Eno Center for
Transportation
OPENING STATEMENT OF CHAIRMAN WHITEHOUSE \1\
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\1\ Prepared statement of Chairman Whitehouse appears in the
appendix on page 43.
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Chairman Whitehouse. Good morning. I am going to call this
hearing of the Senate Budget Committee to order and welcome my
distinguished Ranking Member, Senator Grassley.
We are going to begin with opening remarks and then Ranking
Member Grassley, and then Senator Graham, at whose request this
hearing is taking place. So let me start by thanking Senator
Graham and his staff for their partnership on today's hearing,
and thank Ranking Member Grassley for his blessing of this
effort.
Today's bipartisan hearing looks at transitioning away from
fossil fuels, in my view an economic, national security and
climate imperative, in a way that effectively seizes
opportunities and addresses challenges.
The auto industry is a major economic engine as Senator
Stabenow, who is here, will be the first to argue. In 2023, the
global auto market was valued at $4 trillion, of which the
United States (U.S.) accounted for a bit less than 17 percent.
Two U.S. automakers, Ford and General Motors (GM), are
among the world's five largest automakers. Foreign companies
operate assembly plants in the U.S. Senator Graham is attentive
to the BMW plant that operates in his home state, and whenever
we go to the Munich Security Conference, he is sure to check in
with the BMW folks, to make sure they keep building in South
Carolina.
Motor vehicles and parts were America's second largest
export, and the auto market could increase to over $6 trillion
by 2031. So we want to be a part of that action. To grow U.S.
automakers' share of this growing pie, we need to understand
and respond to this global market.
So here is where we are. Globally, 20 percent of vehicles
sold in 2023 around the world were electric, 20 percent. In
China, which is the world's largest auto market, 33 percent of
cars were electric. In Europe, 20 percent of vehicles sold were
electric, and other major markets are racing to Electric
Vehicles (EV)s.
Between 2022 and 2023, electric car sales tripled in
Brazil, and more than quadrupled in Thailand. And I put into
the record an article from the New York Times, which I have
just now misplaced, but that points out how the Thai auto
market has been lost to Japanese manufacturing, which used to
control it, because they are not producing the electric
vehicles that the Thai market demands.
So you have got to have the vehicles people want to meet
the market. Ah, here it is. Thank you. Without objection, I
will add that to the record.\2\
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\2\ Statement submitted by Chairman Whitehouse appears in the
appendix on page 146.
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The writing is on the wall for us. Around the world, the
future of personal transportation is electric, completely
independent of whatever the United States decides to do. And
that is great. First, it means more freedom from a global
commodity whose price is manipulated by international petro-
dictators.
Over and over American consumers suffer as the geopolitical
designs of petro-dictators cause oil prices to soar. Real
energy independence comes from independence from fossil fuel
cartels. Going electric benefits western democracies, as oil
and gas revenues fund many of our worst foreign adversaries.
Look no further than the corrupt petro-tyrant Vladimir
Putin. As we reduce our dependence on oil and gas, we diminish
our foreign adversaries' ability to bully and corrupt. Senator
Graham and I wrote in 2021 op-ed published in Time magazine,
``If you wave a magic wand and transition the world away from
fossil fuels, American would instantly be safer.''
And without objection I ask that that be made a part of the
record.\3\
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\3\ Statement submitted by Chairman Whitehouse appears in the
appendix on page 140.
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As the driver and owner of two Chevy Bolts, I will also add
they are just better cars. They are quieter, faster and more
fun to drive. They do not have tailpipe emissions stinking up
highways and neighborhoods. Repair and maintenance costs are
nearly non-existence. No oil changes, one-tenth the number of
parts to break or fail, no expensive, dangerous, smelly
gasoline.
In emergencies, EV fleets can even provide backup power to
families when the grid goes down, and smart EV chargers can
help shave dangerous load peaks for electric utilities, if we
make the needed small investments in the required
infrastructure.
And of course yes, electric vehicles dramatically reduce
carbon pollution in the transportation sector, currently the
largest source of fossil fuel emissions in the U.S. The more we
reduce carbon pollution, the better our chances of avoiding the
dire systemic climate-related economic risks we have discussed
in this Committee over the last 18 months.
It may be too late to save Florida's property insurance
market, but there are plenty of other risks we would be wise to
avoid and fools to stumble into. Electrifying the
transportation sector presents a tremendous economic
opportunity. Automakers get the message that people want EVs
and they are responding.
Since 2017 they have, along with their battery partners,
invested $125 billion in electrification. 20 states have or
will have EV production or assembly of battery facilities. For
some reason, Tesla is taking a hit but other makers are seeing
surging sales year over year. Ford EV sales increased 86
percent from the first quarter of 2023 to the first quarter of
2024. Rivian sales jumped 59 percent over the same period.
So how do we position our auto industry and our nation for
that economic opportunity and for global competitiveness? As
our economy electrifies, it needs to be supported by a 21st,
not a 20th century grid. The grid will need to handle increased
demand, from electric vehicles, from heating and cooling, from
manufacturing from hydrogen electrolyzing, and from energy-
gobbling data centers.
To meet this demand with clean power requires new and
upgraded transmission to deliver that power to consumers. That
means smart reforms to our cumbersome and antiquated permitting
process.
Domestic supply chain investments must accelerate. Look at
China. 15 years ago, China saw the value of electric vehicles
and batteries and began investing, and now it dominates
critical mineral and battery manufacturing markets.
Let us learn the servitude lessons of from fossil fuel
dependence, and from our lost manufacturing capacity. Let us
swiftly counter this emerging geopolitical risk with smart
investment, and take back our economic dominance in clean
energy products.
We must also find a way to reconcile the surging EV market
with the Highway Trust Fund, that provides 80 percent of
federal highway spending with a majority of its revenue from
federal gas taxes. The Bipartisan Infrastructure Law, which
most recently replenished the fund, sunsets in just two years.
The clock is ticking on highway infrastructure funding.
To my mind this is a morning in America moment. Freedom
from dependence on petro-dictators; opportunity to reclaim from
China clean energy leadership; better, safer products for
American consumers, with more money in their pockets.
Cleaner air to breathe along highways and neighborhood
streets, and an important step forward on our pathway to
climate safety. What is not to love if we do this right? Thank
you again to Senator Graham for this hearing. I look forward to
the conversation, and I turn now to Senator Grassley, followed
by Senator Graham for opening statements.
OPENING STATEMENT OF SENATOR GRASSLEY \4\
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\4\ Prepared statement of Senator Grassley appears in the appendix
on page 45.
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Senator Grassley. Thank you, Mr. Chairman. Welcome to our
expert witnesses. Our last hearing was with Congressional
Budget Office (CBO) Director Swagel. He was welcomed, a very
welcoming event at this Committee, and unfortunately a rare
opportunity for this Committee to focus on critical broken
budget process.
It gives us a chance to talk to somebody that knows that
that process needs to be fixed, and a primary responsibility of
this Committee. In exchange for holding a CBO hearing at my
request, I agreed to Senator Graham working with Chairman
Whitehouse to put together today's hearing.
We will be discussing electric vehicles and barriers to the
electrification of America's light duty fleet. The Biden-Harris
administration's unattainable goal of 50 percent new EV sales
by 2030 has been on full display over the last four years, from
the imposing expensive Environmental Protection Agency (EPA)
regulations to doling out about billions in EV subsidies for
the rich.
The economic detriment to America's EV policy is quite
evident. Now I do not want to give the wrong impression. EV
technology is impressive for some, but Iowans know that there
are far more challenges to EV adoption than many care to admit.
EVs best serve wealthier people, who also live in or near
suburban and urban areas. Perhaps the most prominent barrier to
EV adoption is that EVs are uneconomical.
CBO's February baseline set the record straight, telling us
that the so-called Inflation Reduction Act's EV handout would
increase the deficit by hundreds of billions of dollars. I also
could not help but notice that the price of EVs rose
immediately after the IRA's passage, to absorb the bill's
$7,500 new EV tax credit. These EV costs were then of course
passed on to the consumer.
Of course, now many had to be discounted because they have
not been able to sell them, and I have yet to hear a
comprehensive plan to make EV owners pay into federal Highway
Trust Fund. EV drivers are currently free riding on the backs
of the middle class, and although some states have instituted
an extra fee for so-called fuel efficient vehicles, making them
even more expensive.
There are many holes in the rapid EV transition fantasy.
They include a lack of critical minerals needed to produce EVs,
lack of transmission infrastructure needed to support the
increased electricity demands, and our current reliance upon
nefarious countries in the EV supply chain. According to the
University of Michigan, the world would need to mine 115
percent more copper from 2018 to 2050 than has been mined in
all of human history up until 2018, just to do business as
usual.
This copper mining does not even include the green
transition, and the EV, they take three to five times as much
copper as a standard vehicle. I hope we discuss where these
critical minerals for the so-called EV transition will come
from.
China dominates the global critical mineral supply chain,
accounting for approximately 60 percent of the worldwide
production, and 85 percent of processing capacity, and we
struggle to permit federal projects here in America.
From wind turbines to transmission lines to pipelines to
hard rock mines, left wing environmentalists are holding the
permitting reform needed for the very EV expansion that they
claim to support. The left claims climate crisis, but backs
away from comprehensive reform when the environmental lobby
comes calling.
They also claim to care about air quality and environmental
justice, but ignore the unreported and under-reported
particulate emissions from tires under the heavy weight of EVs.
Legislators must do better, and I hope this hearing serves as a
stepping stone for honest permitting of dialogue moving
forward.
As we grapple with the environmental red tape, the Chinese
are rapidly expanding coal power plants to fuel the EV
manufacturing boom. I would like to welcome all today's
witnesses invited here by Senator Whitehouse and Graham, and
finally Mr. Chairman, I request unanimous consent to put this
article called ``Copper Can't Be Mined Fast Enough to Electrify
Vehicles.''
I thank you. Before you go on, I was thinking I mentioned a
few inconsistencies in my opening remarks, but I think of
others. And maybe it is being the adjective unrealistic or
inconsistency may fit a couple of things.
But Iowa is the number one producer of ethanol. We have
43,000 jobs in Iowa, and if we had every vehicle in the United
States be EVs, you could see what that could do to the
particular jobs that we created 40 years ago, to produce a more
environmentally friendly product then petroleum is.
We have the inconsistency of the rain forest being hacked
away to mine nickel in Indonesia. We have the inconsistency of
people in the Congress that talk about we gotta stop the use of
child labor around the globe, and yet we have children mining
cobalt in Congo. I mentioned transmission in my opening
comment. The Chairman mentioned transmission. But this
permitting process is halted by environmentalists not wanting
to cut red tape here in Washington, D.C.
And then you have the silly posture of the Inflation
Reduction Act, appropriating billions of dollars for charging
stations, and I guess to date we have about eight. So I just
think there is a lot about this whole process that has not been
thought out very well. I am done now.
Chairman Whitehouse. Well, I hope that the $125 billion in
private capital that has been dedicated to this says otherwise.
Senator Graham.
Senator Grassley. That's mercantile economic policy of the
federal government.
OPENING STATEMENT OF SENATOR GRAHAM
Senator Graham. Well, thank you. Good morning. What have I
learned? We have donuts at the Budget Committee, and I am going
to take a wild guess. Senator Grassley did not buy them. But he
is welcome to as many of them as he wants.
Senator Grassley, you laid out real challenges, and
everything you said is real. So what I want to do is thank the
Chairman for having this Committee hearing about electric
vehicles, because I am in a very heavy car manufacturing state.
And they are making electric cars and hybrid cars and all kind
of cars.
And I am trying to figure out, sort of like where should
we--what should we be doing and when should we do it as a
nation. I met with the Chinese Ambassador yesterday. I had not
talked to him in a very long time. I am going to go to China
next year.
They decided 15 years ago to get in this business for some
reason. It seems to be like they were pretty smart. A lot of
people are buying electric cars. President Trump says let them
buy electric cars, do away with the mandate. Yeah, it makes
some sense to me.
The world seems to be making more electric cars and using
electric cars, and what does that mean for us? Well, if you
really want to compete in this space, Senator Grassley laid out
some real challenges. Power. Let us say half the cars on the
road at some point in time become electric.
The grid demand will go through the roof. How can you
generate enough power to accommodate electric vehicles and
where does it come from? Can you do it with all renewables, and
how do you do it without natural gas? You can't. So to my
friends in the environmental world, we need to be thinking
about increased power production that can actually occur.
That means regulatory form and everything Senator
Whitehouse just mentioned, but nuclear power. EVs as projected
will take up all the power produced by the nuclear industry and
certain renewables just by themselves. These data centers, you
know, you are blessed to have them but you are cursed too,
because they are just power consumers.
So it seems that the digital economy and electric vehicles
is going increase demand for power in a way nobody has really
thought through. And where does the new power come from? How
you get it online and how do you get it delivered is something
I think worthy of the Congress's consideration, not just this
Committee.
So Chairman Whitehouse, thank you very much for having
this. The demand seems to be real, apart from the mandate.
So what happens to the Highway Trust Fund? $5 billion in
lost revenue if the numbers projected come true in the United
States. So as Senator Grassley indicated, if you are driving an
electric vehicle, we have got to find some way for you to pay
in to maintaining the roads.
I do not know what the right answer is, but we had better
come up with it pretty quick. You know, we aim and--shoot first
and aim later is sort of what we are doing here. We are setting
a goal to have 50 percent of all the cars in America become
electric, but we have not really thought through how you
improve the grid to get there.
Where does the revenue come from that will be lost, and
China, to my colleagues, we are in competition with China in
many areas. They dominate this market. Do we really want to
replace dependence on Mideast oil and gas with China dominance
of the supply chain in electric vehicles?
The processing facilities to make a battery really do not
exist here. How do you create them, and as Senator Grassley
indicated, where do the resources necessary to make a battery
come from? If we could make a battery out of corn, that would
be good. I do not think we can, but I am willing to have an
open mind about that.
So the bottom line is this is coming whether we like it or
not, and I think there is an upside to it, to be honest with
you, and there is definitely a down side. So from a national
point of view, it seems to me that we have set a goal and we
have not put the infrastructure in place to meet that goal.
And from a Republican point of view, if you said there is
no more mandate, I would be curious to see what kind of sales
would occur without a mandate. It would not go to zero. Over
the arc of time, there are going to be more electric vehicles
not less and in the United States, and over the arc of time
they are going to be a lot of Chinese electric cars all over
the world.
I would like to compete in this space. Forget about the
mandate for a moment. Consumers, particularly younger people,
are into this and the world is into this. America needs to play
in this space for a variety of reasons, whether it is clean
air, whether it is just creating jobs for the new economy.
Whatever reason, we need to think long and hard about how
we compete, the challenges we face and we are behind in a game
that is being played by China very aggressively. When it comes
to America's national security interest, I think we need to
compete in the transportation space. So thank you for having
the hearing. I do not know what the answers are to all these
questions, but I do know that the march toward electric
vehicles is inevitable.
Chairman Whitehouse. Thank you, Senator Graham. We have
five witnesses here today who have been agreed on, each a
bipartisan selection. The first is Dr. Jesse Jenkins, Assistant
Professor at Princeton University with a joint appointment in
the Department of Mechanical and Aerospace Engineering, and the
Andlinger Center for Energy and Environment.
Dr. Jenkins also leads Princeton's Zero Carbon Energy
Systems Research and Optimization Laboratory, which conducts
modeling to evaluate low carbon energy technologies, and
generate insights to improve energy and climate planning.
Our second witness is Britta Gross, Director of
Transportation at EPRI, formerly the Electric Power Research
Institute. In her role, Ms. Gross is responsible for defining
the market strategies needed to accelerate the electrification
of the transportation system, with a focus on identifying the
gaps that need to be addressed to achieve 2030 climate goals.
She was formerly the director of Advanced Vehicle
Commercialization at General Motors, so I hope she was smiling
when we talked about Bolts.
Third is Maureen Hinman, the co-founder and executive chair
of Silverado Policy Accelerator. Prior to founding Silverado,
Ms. Hinman served as Director for Environment and Natural
Resources at the Office of the United States Trade
Representative.
She also served at the U.S. Department of Commerce as
senior industry trade specialist responsible for international
policy development and interagency advocacy for the U.S.
Environmental Technology.
Silverado is helping this Committee in a number of areas,
and I am grateful to Ms. Hinman for being here.
Our next witness is David Schwietert, the Chief Policy
Officer at the Alliance for Automotive Innovation. Before
joining the Alliance, David Schwietert was the interim
president and Chief Executive Office (CEO) of the Alliance for
Automobile Manufacturers.
Prior to joining the Auto Alliance in 2015, Mr. Schwietert
worked in the U.S. Senate for over 15 years, holding various
positions including staff director of the Committee on
Commerce, Science and Transportation. Welcome back, Mr.
Schwietert.
And last but not least, we have Jeff Davis, a senior fellow
with the Eno Center for Transportation. Mr. Davis joined Eno in
2015 from his own transportation and public works research and
consulting company. He started his career working in the House
of Representatives, so also welcome back to you, Mr. Davis.
Thank you all for joining us today. Dr. Jenkins, please
proceed. You have five minutes for an oral statement, and your
testimony, like that of all the others, will be put into the
record completely.
STATEMENT OF DR. JESSE JENKINS, ASSISTANT PROFESSOR AND MACRO-
SCALE SYSTEMS ENGINEER, DEPARTMENT OF MECHANICAL AND AEROSPACE
ENGINEERING, AND THE ANDLINGER CENTER FOR ENERGY AND
ENVIRONMENT, PRINCETON UNIVERSITY \5\
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\5\ Prepared statement of Dr. Jenkins appears in the appendix on
page 48.
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Dr. Jenkins. Thank you, Chairman and Ranking Member and
Senator Graham for organizing the hearing and the opportunity
to testify. My name--thank you. I thank the Chairman and the
Ranking Member and Senator Graham for the opportunity to
testify and for organizing the hearing today.
I am Jesse Jenkins, a professor of Energy Systems
Engineering at Princeton University. I also lead the Rapid
Energy Policy Evaluation and Analysis Toolkit (REPEAT) Project,
which assesses the impacts of federal energy and climate
policy. I have to note that all views expressed today are my
own.
The United States is now in the early stages of a momentous
transition in the automotive sector. Over 1.1 million battery
electric vehicles were delivered to U.S. consumers in 2023,
alongside over 183,000 plug-in hybrid electric vehicles. So by
the end of 2023, almost one in ten light duty vehicles sold in
the U.S. had a plug.
This transition to electric vehicles is a central pillar in
the United States' efforts to both cut greenhouse gas emissions
and reduce our vulnerabilities to shocks in global oil markets.
Today, the United States is producing more oil than any country
at any point in history. And yet the U.S. economy remains
dangerously exposed to the volatility of global oil prices.
The decisions of a dictator to invade a neighbor or a
disaster on the other side of the world can send the cost of
filling the tank in Denver or Des Moines soaring, and every $10
per barrel increase in the price of oil is $210 million per day
tax on American consumers and businesses.
So we simply cannot drill our way to energy security, but
we can electrify. By severing our reliance on gasoline and
diesel to fuel our cars and trucks, we can finally secure
America's independence from global oil shocks.
Electrifying transportation is also critical to meet
national climate objectives. Switching to EVs and cleaning up
our grid is the critical 1-2 punch that will decarbonize
transportation. President Biden established a goal to cut U.S.
greenhouse gas emissions to half of our peak levels by 2030.
To reach this goal, electric vehicle sales should make up
about half of all light duty vehicle sales by that date. That
is up about fivefold from today's share. Yet over the last nine
months, sales of plug-in vehicles in the United States have
plateaued, driving a growing gap between current trends and our
U.S. climate targets.
Electric vehicle sales growth actually accelerated through
the third quarter of 2023, regularly exhibiting explosive year
on year growth rates of roughly 40 to 60 percent. But beginning
in the fourth quarter of 2023, growth in U.S. EV sales has
stalled, a trend that has continued through the first half of
this year.
At the current pace, sales of plug-in vehicles are up just
nine percent this year. If we look beyond the top-line numbers,
it is clear that the story so far is mostly about Tesla.
Over the first half of 2024, Tesla sales contracted by 13
percent, while sales of all other plug-in hybrid vehicles and
electric vehicles are up a healthy 31 percent. That is right in
line with the REPEAT Project's expectations for this year for
the sector as a whole.
Taking a step back, consumer surveys find that about half
of U.S. vehicle buyers are considering buying an EV within the
next 12 months, indicating substantial consumer interest and
potential for large market growth. Cost and charging-related
concerns remain the most commonly cited barriers to consumer
adoption, but both trends are improving, thanks to both market
competition and private investment, as well as supported public
policy.
Millions of new EVs do mean much more demand for
electricity, raising the question is the U.S. grid prepared.
First, it is important note that given the dynamics of the
fleet turnover, even if 100 percent of new vehicle sales were
electrified tomorrow, it would still take about 15 years before
the entire fleet of on-road vehicles were electrified, and it
will take considerably longer than that given current trends.
So we have some time to prepare America's electricity
infrastructure, markets and regulations for widespread
adoption. But we best not waste that time. REPEAT Project's
2024 current policy scenario expects EVs to consumer the
equivalent of about eight percent of current total U.S.
electricity use by 2030, and 17 percent by 2035.
To put it another way, by 2035 EVs could consume nearly as
much electricity as is produced today by the entire fleet of
nuclear power plants, or all non-hydro renewables combined. So
while a lot of attention has recently been paid to increasing
demand from data centers and Artificial Intelligence (AI),
electric vehicles are actually likely to be a larger driver of
electricity demand growth over the next decade than artificial
intelligence.
EV chargers also represent large new instantaneous power
demands that could put stress on grid infrastructure. Coming
home and plugging an EV into a Level 2 charger is like flipping
the switch on about a dozen or more window-mounted air
conditioning units. Fortunately, it should be possible to avoid
charging EVs during peak periods.
Assuming only a modest level of flexible charging, REPEAT
Project scenarios expect EVs to contribute less than four
percent of peak U.S. electricity demand in 2030, and seven
percent by 2035. Broader use of managed charging programs could
further reduce if not eliminate the contribution of electric
vehicles to peak grid uses.
The technology for that is available today. All that is
missing are the appropriate incentives. Thank you.
Chairman Whitehouse. Thank you very much. Ms. Gross, please
proceed.
STATEMENT OF BRITTA GROSS, DIRECTOR OF TRANSPORTATION, ELECTRIC
POWER RESEARCH INSTITUTE \6\
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\6\ Prepared statement of Ms. Gross appears in the appendix on page
58.
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Ms. Gross. Mr. Chairman, Mr. Ranking Member and Members of
the Committee, thank you for the opportunity to testify today.
I am Britta Gross, the Director of Transportation at EPRI.
EPRI's an independent, non-profit energy research and
development institute founded in 1972.
The electrification of the transportation sector is
challenging from a grid perspective. Given the size of the
load, the shorter lead times and the fact that cars and trucks
are mobile, which means this load can appear just about
anywhere on the grid.
But a load of this size is not unprecedented. Between 1965
and 2005, the grid adapted to a load twice as large as
transportation. Electrifying transportation is also an
opportunity to diversify the load that is currently on the
grid, which normally shows up as early morning or late
afternoon load peaks.
Utilities have to design for these peak loads to ensure
electricity is reliable. But if utilities can take advantage of
this typically flexible transportation resource, for example to
charge most vehicles at night, this can help minimize new grid
investments and ensure a more affordable transition. Though the
grid impacts of electric transportation will eventually be felt
across the generation, transmission and distribution systems,
the near-term impacts are being felt on local distribution
systems, those wires that lead to our homes or offices, fleet
depots and charging sites today.
When we look at the overall impact that 279 million
vehicles will have on the grid, the light duty vehicles, the
cars most of us drive everyday, they will consume the most
energy. But that load will be distributed across the entire
grid, and its impact on a local distribution circuit is
generally minimal.
But heavily concentrated fleets such as airport, car rental
fleets and trucking fleets, will bring larger loads to these
local distribution systems. So in EPRI's work though we
consider all loads from light duty vehicles to heavy duty
vehicles, we are especially focused on fleets and trucking
loads.
A challenge that is unique to transportation is the timing
mismatch between vehicle procurement and the time it takes to
make grid upgrades. A fleet operator can order a dozen heavy
duty electric semis to be delivered in about four to six months
today.
Yet the time it takes to bring additional power to that
site for charging can take anywhere from 18 months on average
to multiple years if more significant grid upgrades are
required.
A second challenge is the market complexity. There are over
3,000 utilities and tens of thousands of fleet operators who
have seldom had to deal with electric utilities. This means a
fleet operator or a charging property developer with hundreds
of sites nationwide has to be able to identify the right
utility to begin planning efforts, and then figure out how to
apply for service when utilities all use different processes.
To address these pain points, these key industries have to
work together with utilities in unprecedented ways to share
their electrification plans earlier with utilities and with
utility regulators, so that there is advance knowledge of where
and when loads will show up on the distribution system.
Drawing on the expertise of the utility industry, fleet
operators, charger providers and vehicle manufacturers, we
launched the EVs2Scale Initiative, and identified two critical
tools to address current challenges and enable industry to get
to scale.
The first is an interactive online map that identifies
where and when transportation loads are likely to appear on the
grid at a local distribution feeder level. As fleet operators
and charging providers share more of their electrification
plans with us, confidence grows in where to prioritize these
grid investments.
And this map also now shows how much power is currently
available on a utility's feeders, to serve these loads. To our
knowledge, this is the first time available hosting capacity
maps have been aggregated in a single location and made public.
This online mapping tool is available today.
The second tool is a standardized service application
template for the utility industry that provides fleet operators
and charging developers with a common application form to
request service for a charging site anywhere in the U.S.
This will eliminate much of the time, complexity and cost
involved in reaching out to one utility at a time, and
providing the same information to different utilities. It is
analogous to the college Common App process. This common app
tool is in development and will be available by the end of this
year.
Leading companies in transportation electrification
including Amazon, Enterprise, Daimler Truck, Volvo Truck and
many others are working with EPRI and the utility industry
leaders to design these tools to ensure they will address the
barriers to large-scale electrification of transportation.
Thank you again to the Committee for the opportunity to
share insights on this important topic. I look forward to
answering your questions.
Chairman Whitehouse. Thanks so much, Ms. Gross. Dr.
Jenkins. Dr. Hinman, sorry.
STATEMENT OF MAUREEN HINMAN, CO-FOUNDER AND CHAIRWOMAN,
SILVERADO POLICY ACCELERATOR \7\
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\7\ Prepared statement of Ms. Hinman appears in the appendix on
page 70.
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Ms. Hinman. Chairman Whitehouse, Ranking Member Grassley,
Senator Graham and distinguished Members of the Committee, it
is my sincere pleasure to appear before you today.
My name is Maureen Hinman, and I am the chair and co-
founder of Silverado Policy Accelerator, a non-profit
bipartisan think and do tank, focusing on developing novel
policy solutions to our most pressing economic, environmental
and national security challenges, through a focus on rigorous
research, cross-domain policy engagement and granular policy
implementation.
Fittingly, the challenges before the global battery and
electric vehicle supply chain represent a fulcrum of these
risks, challenging our ability to transition American lives and
livelihoods to clean economy, maintain critical manufacturing
base, and to preserve energy independence.
Currently, the EV battery sector is following the well-
tread pattern of the United States acting as chief global
innovator on critical emerging technologies, but falling short
on the downstream industrial development because our market
economy, bound by the rule of law, cannot reasonably compete
with the openly predatory, non-market industrial policies of
the Chinese Communist Party.
To change this script, we need to broaden the collective
understanding of the impact the CCP's policies have on global
competition and American national security. While yielding
price distortions that have created low costs for consumers in
the short term, the CCP's industrial policies ultimately create
an unsustainable risk matrix for the United States.
For example, battery cell production costs, which comprise
about 30 to 40 percent of the total vehicle production cost
sell at $114 per kilowatt hour in the United States, compared
to just $82 per kilowatt hour in China.
This difference is owed to the fact that materials remain
about 30 percent cheaper in China.
A cursory look at the EV battery supply chain reveals a
troubling state of play. China has captured the balance of
global supply chains for refined minerals products, battery
components and final products including battery cells and
electric vehicles.
For several of the mined products that are unavailable
within China itself, Chinese firms own a major stake in mines
globally. China controls 28 percent of lithium mines, 41
percent of cobalt mines and nearly 20 percent of copper mines.
The Chinese Communist Party (CCP) achieves these results
through an industrial policy playbook I call ``The Successes.''
First, China sets specific goals and targets for what it
determines to be priority sector, including through sector-
specific five year plans. Next, the CCP shelters its infant
industries from markets and competition using tools such as
tariff and non-tariff barriers, and limits on foreign
investment.
Simultaneously, China subsidizes target industries directly
across the value chain and through a variety of payment
systems, both formal and informal, including environmental
arbitrage, and operating firms in a way that a market economy,
underpinned by the rule of law, could simply not sustain.
Concurrently, Chinese firms and often the government itself
are encouraged to acquire or outright steal foreign
technologies and then merge and innovate upon them without the
costs associated with legal acquisition of intellectual
property. Once Chinese technologies have a toehold in global
markets, the CCP subverts competition through a variety of
market strategies, including undermining market pricing by
building overcapacity and production untethered to real demand,
and then exporting the surplus onto global markets at below
cost prices, throttling or limiting supply to undermine
competitors, making strategic investments in adjacent
industries and critical infrastructure in key markets, and
engaging in economic coercion and intimidation.
Finally, once China has established a near-market monopoly,
Chinese firms sell everywhere at a price of their choosing,
weaponizing supply chains in their favor.
The CCP's approach dwarfs other nations' efforts, not just
in strategy but critically in scope, scale and consistency
across the entirety of the supply chain. Put simply, China
unfairly and illegally subsidizes more programs for more
critical nodes over a longer period, and with more dollars.
The CCP's stated goal is to establish a global monopoly
power in all critical industries, and they are well on their
way to achieving this end in the EV battery market. The
International Energy Agency anticipates that China's battery
manufacturing capacity will account for 77 percent of world
demand by 2030. These cheap batteries are no deal.
Effectively countering these efforts will require that the
United States and market economies deploy coordinated, agile
policies at a scale sufficient to correct for the market
distortions and to protect U.S. public and private investments
in industrial and environmental security.
Silverado and I remain at your service, as you devise
policies that can meet this generational challenge. Senators, I
thank you for your time.
Chairman Whitehouse. Thank you so much, Ms. Hinman. Next is
Mr. Schwietert.
STATEMENT OF DAVE SCHWIETERT, CHIEF GOVERNMENTAL AFFAIRS AND
POLICY OFFICER, ALLIANCE FOR AUTOMOTIVE INNOVATION \8\
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\8\ Prepared statement of Mr. Schweitert appears in the appendix on
page 80.
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Mr. Schwietert. Chairman Whitehouse, Ranking Member
Grassley, Senator Graham and Members of the Committee, my name
is David Schwietert. I am the Chief Government Affairs and
Policy Officer at the Alliance for Automotive Innovation,
representing the automakers, battery suppliers and producing
most of the vehicles sold in the U.S.
Thank you for the invitation to testify and to share our
perspective this morning on the U.S. electric vehicle market
and policies to help accelerate this transition.
Today, I want to provide the auto industry perspective on
the shift towards electrification, and to give the Committee a
status report about not only what is working but also where
there is work to be done.
Let us start with this. Electrification is transforming
personal mobility. It is rewriting global supply chains,
rebuilding domestic industrial base and creating jobs, and
underpinning of the American economy and of course our national
security in fundamental ways.
Today, 113 electrified products, sedans, pickups, utility
vehicles and van models are available for sale in the U.S. This
includes battery electric, plug-in hybrid and fuel cell
vehicles. There is also increasingly efficient internal
combustion engine technologies, lots of choices in power train
and vehicle type, something for sale that meets the needs of
every customer.
Choice is a priority for automakers. Last year, 9-1/2
percent of all U.S. light duty sales were electric or zero
emission, up from 2.4 percent in just 2020. Even with this
major momentum, we are in a challenging period, as Senator
Graham noted this morning.
Yes, the EV market is growing, but the growth is slowing.
One reason, most EV early adopters have already adopted the
technology. Spikes in EV demand or choppy growth are certainly
not surprising. In our view, this massive transformation is a
marathon, not a sprint.
Shifting to electric personal mobility requires nothing
short of a complete transformation of the global automotive
industrial base, and the companies I represent are self-funding
this transition, and have committed over $125 billion to EV
production and battery manufacturing across the country so far.
This is expected to create 100,000 jobs at major facilities
in South Carolina, Georgia, Tennessee, Alabama, Michigan, Ohio,
Kentucky, Kansas, Indiana and other states. My written
testimony includes a map of these cutting edge facilities all
over the Midwest and Southeast.
Senators, we are building these vehicles and localizing
these supply chains here at home right now. But the truth is
these massive capital transformations are huge bets, and they
are funded using profits generated from gas-powered vehicles.
Automakers know that a shift at this scale will not happen
overnight. The transition takes time and patience, and it is
important to the Committee and policymakers to understand these
dynamics as well.
Collectively, we cannot get ahead of the customer,
especially when we are expanding public charging infrastructure
or expanding grade capacity. Finding the right balance between
markets and regulations and policy is absolutely key to
remaining globally competitive.
Let me take one observation about supply chains. This is
partially a point about geopolitics, namely China that controls
a vast amount of raw materials and processing capacity for EV
batteries. By 2035, the U.S. is anticipated to have supply gaps
in excess of 50 percent of needed cathode and anode materials,
nickel, cobalt, manganese and graphite.
At the same time, America's allies and rivals are trying to
secure the same mineral supplies to support their own
electrification goals. Domestic mining and processing
facilities face long lead times for permitting and development,
as well as other obstacles.
This is an area where I believe Congressional attention and
action is needed, and I am actually pleased to know this
morning the Senate Energy Committee is taking up bipartisan
permitting reform legislation.
One last point on China and U.S. competitiveness. At the
turn of the century, China was manufacturing around two million
vehicles. Today, they manufacture 30 million vehicles and have
capacity for nearly 50 million. Nearly one-third of that
production last year was for EVs alone.
In other words, China is manufacturing EVs equivalent to
the entire U.S. manufacturing output. Without question, the
future offers consumers more vehicle choices than ever, but we
have got some challenges in front of us.
The auto industry and policymakers need a shared and a
realistic vision of success when it comes to automotive
electrification. Regardless of political views and what state
you live in, we need an approach in this country that balances
emission reductions and consumer choice, and expands our
industrial base and America's ability to compete around the
world. Thank you and I look forward to your questions.
Chairman Whitehouse. Thanks very much. Before I turn to Mr.
Davis, an administrative moment to let everybody know that
Senator Graham and I are yielding our positions to first
Senator Stabenow and then Ranking Member Grassley. So the order
at the conclusion of Mr. Davis' five minutes will be Stabenow,
Grassley, Whitehouse, Graham, Merkley, Braun, at least for
openers. Mr. Davis, please proceed.
STATEMENT OF JEFF DAVIS, SENIOR FELLOW, ENO CENTER FOR
TRANSPORTATION \9\
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\9\ Prepared statement of Mr. Davis appears in the appendix on page
95.
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Mr. Davis. Mr. Chairman, Mr. Ranking Member, Senators, my
name is Jeff Davis. I'm a Senior Fellow at the Eno Center for
Transportation. Eno is a 501(c)(3) non-profit, non-partisan
think tank founded by traffic pioneer William Phelps Eno in
1921.
All federal gasoline and diesel fuel tax receipts, along
with trucking industry excises, have been deposited in a
Highway Trust Fund since 1956, to make it clear that those
levies on highway users could only be spent on specific highway
programs.
Congress has since opened up the Trust Fund to highway
safety and mass transit spending as well. The Highway Trust
Fund has been fundamentally insolvent since 2008.
Electrification did not start this problem, but it stands to
make the problem much worse in the coming years.
The state of insolvency is the result of three trends.
First, the rate at which driving on U.S. roads increases every
year has leveled off. From the 1950's to the end of the 1970's,
total vehicle miles traveled (VMT) on American roads, grew at a
pace double every 16 years. It slowed so much now that the
Federal Highway Administration this month projected a future
rate at which it would take VMT 140 years to double.
Second, taxing the number of gallons of gasoline and diesel
fuel used on roads was originally a proxy for taxing VMT. In
1976, the average passenger car on the road burned 7.2 gallons
of gasoline for every 100 miles driven. Today, the average
passenger car on the road burns four gallons of gas every 100
miles.
For SUVs and pickups, fuel efficiency has increased from
9.3 gallon per 100 miles in 1976 to 5.6 gallons per 100 miles
today. Third, Congress has been unable to either keep Trust
Fund spending constrained to tax receipt levels, or else
increase tax receipts.
Congress now enacted five consecutive multi-year funding
bills, in which case new funding in the final year of each bill
was at least 25 percent above new Trust Fund taxes and
interest. These trends caused the Highway Trust Fund to run out
of money in 2008, before the first plug-in EV, and Congress has
since provided $272 billion in ad hoc bailouts from the General
Fund.
Now electrification is having its effects. According to the
Congressional Budget Office's June 2024 forecast, the number of
gallons of gasoline tax from the Highway Trust Fund will fall
from about 138 billion gallons in 2024 to 89 billion gallons in
2034.
Annual gasoline tax receipts are projected to drop more
than five percent per year starting in 2030. If we combine this
newly-projected drop in gas tax revenues with currently
predicted Trust Fund spending, annual cash deficits in the $13
billion a year range today will jump to an astounding $51
billion deficit in 2034, a decade from now.
Because the Trust Fund used to be solvent on a user pay
basis and for other historic reasons, Trust Fund spending is
exempt from most of the restrictions and controls in federal
spending written into the Budget Act and subsequent process
statutes in this Committee's jurisdiction.
If one were to try to fix that projected $51 billion Trust
Fund deficit in 2034 solely by increasing gasoline taxes, and
let me emphasize absolutely no one is advocating this, the
current 18.3 cent per gallon gasoline tax to the Trust Fund
will need to be increased by about 58 cents per gallon, to a
total tax of about 76 cents per gallon of gasoline.
There are alternatives to motor fuel taxes that could
continue the user pay/user benefit paradigm that underlies
federal trust funds, which I address in my written testimony,
but none are nearly easy to administer as the gasoline tax.
Going from fuel to vehicle as the subject of taxation,
means going from about 1,300 points of collection of gasoline
taxes and diesel taxes, to 279 million points of collection,
which is the number of registered private vehicles in the U.S.
in 2022. Taxing vehicles will be over 200,000 times as much
work for the Internal Revenue Service (IRS) as taxing motor
fuel.
In short, if rapid decarbonization of highway
transportation is to be federal policy goal, Congress should
carefully consider whether and how to replace the fossil fuel-
based highway user taxes that currently support highway and
mass transportation with some other revenue source. Thank you,
and I look forward to your questions.
Chairman Whitehouse. Thanks very much, and I will now turn
to the distinguished Senator from Michigan, who I think knows
and cares more about the auto industry than pretty much anybody
around here, Senator Stabenow.
STATEMENT OF SENATOR STABENOW
Senator Stabenow. Well thank you so much, Mr. Chairman and
Senator Graham, who I know cares passionately about
manufacturing. We share that in common, and I could talk all
day. I will not. I know I do not have all day to talk about
this.
But let me first start by saying that no one is forcing
Americans to buy electric vehicle, but I have one. Nobody
forced me to get it. My price did not go up with the Tax Code.
Unfortunately, the latest round of the Tax Code is so
complicated and limiting that I do not--it is certainly not
helping as much as it could help.
But I will say the biggest issue is charging stations, and
I am about to test that again. I mentioned to the Chairman I
have not driven my car from here to Michigan in about a year,
and I am going to test it again to see how many charging
stations we have, to be able to get me back to Michigan in a
couple of days.
I do want it emphasized, and I said this before, you know
in 1917, when Congress began heavily subsidizing oil production
because of fines down in Texas, we did not have gas stations on
every corner either. And in fact at the same time, Henry Ford
and Thomas Edison were working to develop a battery operated
car, but they had no subsidies.
So Congress picked a winner and they won for over 100
years, and now we are trying to expand this out. And I would
say also, Senator Graham, I agree with you. We have a lot of
issues, and I guess what I would say is I think we know more of
what the answers are; we just need to do it, and then we need
to find out where we need to, you know, know more about this.
But chargers not, you know, we know we need more charging
stations. Electric grid capacity, absolutely. Both of those
things are beginning to happen. We are investing in that
through the Bipartisan Infrastructure bill. More usable
consumer credit; more American access to rare earth materials.
We actually have new mining capacity, lithium capacity
being developed in Nevada, which is very exciting because we
are way behind. I would also say that our companies are looking
at using different kinds of technology, that do not take all
those rare earth materials.
Also recycling, which is becoming a job creator in Michigan
for materials. So there is a lot of things. More battery
production, which we know that we need in the United States,
and of course we need to change the Highway Trust Fund,
absolutely.
But I support American innovation. I will tell you in
Michigan right now, we have a stretch of road being built, that
actually has the charging technology in the road, Mr. Chairman.
So that when you drive, you will automatically have your car
charged.
So I support American innovation. Are we there? No. But we
are certainly getting there, and I would also say this. Our
biggest competitor, there is no question about it, is China.
But right now our companies are competing against the country.
That is what is happening. There is not a level playing field.
Specifically, China is coming for us. They want to corner
the EV market, and their government has heavily subsidized this
effort. And they have also been willing to steal our patents, I
should tell you, coming from Michigan.
So what do we do? I mean we, I believe, have the smartest
most talented auto workers and automakers in the world. We need
to do our part to help them create a level playing field, and
that is why I am so glad that we are doing this hearing,
because we are talking about more than ten million good-paying
jobs right now.
So Mr. Jenkins, in your testimony you mentioned the most
important thing Congress can do now for the EV sector is to
provide policy certainty and continuity. Could you talk a
little bit more about that? I know our private sector, our
automakers are saying just give me certainty about what is
going on.
Dr. Jenkins. Thank you, Senator. By that I mean that the
tax credits that were implemented in the Inflation Reduction
Act (IRA) have just been finalized in terms of their guidance,
and many of the programs authorized and funded by the
Infrastructure law are authorized to spend down through 2026.
So these programs are just getting underway, and industry
needs to know that they can count on a stable policy
environment, to make the hundreds of billions of dollars of
investment they have announced across the United States, to do
that with confidence to drive innovation and to expand our
supply chains.
So I think the most important thing that can be done now is
to provide that confidence for the industry with bipartisan
support for the maintenance of existing policies. Also note
that on the consumer side, consumers are just getting familiar
with how these tax credits work.
You know January this year, we started to offer at point of
sale rebates. That is a new thing for people. So there is a lot
for people to get familiar with. We just set the stage. Let us
let our American companies and innovators play on that stage
and do what they do best.
Senator Stabenow. Great, thank you. And Mr. Schwietert,
would you just briefly comment on the same issue?
Mr. Schwietert. Sure, Senator. Obviously policy certainty
is absolutely essential. I mean you talked about not just the
certainty as it relates to potential tax incentives, but in a
competitive environment, we need to look beyond just five or
ten years. We need to ensure that policies are in place to
ensure that the U.S. is competitive, not just tomorrow but well
beyond that.
So that certainty is important and Senator as you know,
oftentimes the general public forgets about the long lead times
in automobile manufacturing and production. The decisions made
today in calendar year '24, model year '25, are effectively
locked. Manufacturers are already looking out to model years
'28.
So policies that change today have a material impact, but
they do not fully get realized for years to come. So that is
why that policy certainty is so important. We need to ensure
incentives are here to build resilient supply chains, to
support consumers as well as to attract the investment and the
jobs that we are witnessing.
Senator Stabenow. Thank you. Thank you, Mr. Chairman.
Chairman Whitehouse. Thank you very much Chairman Stabenow.
Ranking Member Grassley.
Senator Grassley. I am going to start with Dr. Jenkins.
Your written testimony notes ``President Biden established a
target to cut U.S. greenhouse gas emissions to half of peak
levels by 2030. To reach this goal, electric vehicles sales
should be making up about 50 percent of the light duty vehicle
market by that date, up about fivefold from today. Your
testimony also recognized ``a remarkable collapse in EV sales
this year.''
Given the evident lack of demand for EVs, is this Biden-
Harris administration goal of five times today's EV sales
attainable by 2030?
Dr. Jenkins. Great questions, Senator Grassley. At this
stage, I should note that is a goal. It is non-binding, and we
will see where consumers go with the products that are being
offered on the market. I will note as I did in my oral
testimony that most of the collapse in sales, all of it really
is Tesla, who is the market leader responsible for about 45
percent of all plug-in vehicle sales.
So if they are stumbling to sell their vehicles, it is very
difficult to see the overall market expand at a pace that is
consistent with that goal. But the rest of the market is
becoming increasingly diversified. We are seeing strong growth
in a variety of companies offering more and more products that
consumers want, at price points that they can afford, and we
are seeing increased interest from consumers. As I mentioned,
over half of consumers surveyed are interested in buying an EV
within the next year. Not all of them will do so, but that
indicates substantial opportunity to grow, and we are in the
early stages of this transition.
Senator Grassley. Dr. Schwietert, your written testimony
states in bold ``If U.S. policymakers do not support the
development, commercialization and acceptance of electrified
vehicles, our nation risks becoming more dependent on foreign
sources for raw materials and critical minerals and the future
defined by our competitors.''
You also note that ``China is manufacturing EVs on a scale
equivalent to the entire manufacturing output of the auto
industry in the United States.'' The left is holding up the
environmental permitting reform necessary to mine for the
domestic critical mineral which we need to compete with China,
while urging a massive EV market share expansion. It just does
not add up.
So my question. Should we mine for more critical minerals
domestically, and what specific pieces of environmental
legislation should we amend to improve our mining capacity? And
let me suggest, before you answer that, that maybe a couple of
months ago I read about the nickel mining in Indonesia at the
same time that our own government was not allowing such mining
in Minnesota.
Mr. Schwietert. Well Senator, thank you for those
questions. I would like to underscore that you know, again
there is a record number of options and choices available to
consumers today. As it relates to the supply chains, the best
time to start was yesterday. The next best time on permitting
was to start today.
So we cannot have permitting reform fast enough, as it
relates to addressing not only what the U.S. may need for
future supply chain resilience, but also working with our
allies and partners, knowing that obviously auto standards are
set well into the future, and even if we started today with
mining and extracting in the U.S., it might be 15 or more years
before we may see the benefits of that extraction processing.
So again, I think that underscores the critical importance.
If the U.S. is to remain competitive across all vehicle
platforms, that the supply chain piece is fundamental.
Senator Grassley. I think you expressed the inconsistency
between environmental policies, and what the same
environmentalists think we ought to do for EV vehicles.
Mr. Davis, as you know, the federal Highway Trust Fund has
operated at a deficit. It is currently projected by the
Congressional Budget Office to become insolvent in 2028, even
though the existing taxes that fund the Trust Fund generally
adhere to user pays principle for surface transportation.
The federal government has not followed the lead of at
least 24 states that impose higher registration fees on EVs, to
compensate for lost gas revenue. Do you agree that if we want
to maintain the user fee pays principle that has traditionally
guided these Trust Fund taxes, we should ensure EVs are also
paying their fair share?
Mr. Davis. Thank you, Senator. If you want to maintain the
user pay/user benefit principle, that all vehicles that use the
road should pay something, the question of what would the
proper way be to tax EVs depends on first of all, if the
government is going to shift away from gasoline tax to another
method in general. If so, you tax EVs like you tax the rest of
them on mileage or whatever.
If not, the states that are doing EV registration fees, as
long as they are around the ballpark average of what an
internal combustion vehicle of the same size and actual weight
would do on average mileage, is a sort of proxy.
It is not a great proxy because it does not differentiate
between the car that drives 3,000 a year and the car that
drives 30,000 a year. But right now, it is about $89 a year is
the average in gasoline taxes paid for the passenger car, and
it is about $110 in federal fuel taxes paid for a larger Sport
Utility Vehicle (SUV) or pickup truck.
If annual registration for EVs were in that ballpark, you
could honestly say that it was as close in approximation of a
true user fee as it would easier for the IRS to administer, and
would be consistent with the user pay/user benefit principle.
Chairman Whitehouse. Thank you very much, Senator Grassley.
Ms. Gross, you and Dr. Jenkins both talked about how EVs can
contribute to our electric grid security through peak shaving,
or even putting power back into the grid when it is needed.
In terms of peak shaving, you would need the capacity to
tell charging EVs to stop charging through the peak period, and
then automatically resume charging. So you would need a signal
to the automobile from the utility, and willingness of the
consumer to accept that.
To do that peak shaving function, what does Congress need
to do to help? Are there standards that need to be built in? Is
industry doing that on its own? Let me ask you to go first, and
Dr. Jenkins if you had added thoughts, you can follow up. But
Ms. Gross, you first, please.
Ms. Gross. Sure, happy. Thank you Senator for the question.
Happy to talk through this one. Yeah, the electric vehicles, it
is unlike a load we have ever seen before on the grid. It is
the smartest, biggest and most flexible load. So there is this
huge opportunity to charge the vehicles at night. Many, not
all, not all. Not if you are taking a long distance trip or you
are trucking and you have to travel during the day.
But that opportunity to charge when the grid has spare
capacity is a huge opportunity. It is going to keep our costs
low on the grid too, that capital investment in ever increasing
the peak that has to be served on the load--on the grid.
So this idea that V2G and V1G, either single direction,
which is basically smart charging, charge when I want to.
Chairman Whitehouse. V2G meaning vehicle to grid?
Ms. Gross. Beg your pardon?
Chairman Whitehouse. V2G meaning vehicle to grid?
Ms. Gross. Vehicle to grid, perfect. Vehicle to grid is--
and also vehicle to grid meaning--and also bidirectional. So
that not only can I take power from the grid when there is
plenty of surplus capacity, at night or maybe when a lot of sun
is shining in some of the states, but I can also give back to
the grid when there are times when the grid is struggling to
keep up with maybe load on the grid.
And so V2G is certainly a promise that is out there. There
is a lot of work getting done in that area, but smart charging
is here today.
Chairman Whitehouse. Let me ask you and Dr. Jenkins both to
provide a written recommendation to Senator Graham and to
myself, about what we might do working together to make sure
that as EVs come online, they have the necessary capability so
that the consumer can take advantage of that capability.
And also, if you are going to offer a utility that
capability, that adds value to the utility. What benefit should
the consumer get from the utility for offering up their vehicle
as a resource, either by taking it willingly offline during
peak periods, or by limiting charging to the night or however
that works.
It is a bit of a complicated question, but I think there is
room for real bipartisan activity here, and I would love to
have a recommendation from both of you.
In my remaining two minutes, Ms. Hinman, first of all thank
you for all your terrific work. You have described the economic
and national security risks of Chinese, which you called
``weaponized'' supply chains. Is there also a climate risk
associated with China's supply chains?
Ms. Hinman. Yes. Thank you so much, Senator, absolutely. So
China----
Chairman Whitehouse. And is there a policy that would help
fix that?
Ms. Hinman. I think I--I think I know of at least one.
China's rent-seeking also arrives in this form of sort of what
we call environmental arbitrage or creating a pollution
subsidy.
So essentially how it works, even though China has the
technical capacity to enforce its own environmental rules,
because it produces many of those technologies and in fact is
the world's leading exporter of air pollution control
technology.
There is widespread evidence that China, particularly among
their state-owned enterprises, intentionally reduces its
inspection rates, and then refuses to operate its air pollution
control machinery. Now if you look at a coal fire power plant
scrubber, if you leave that scrubber off, that reduces your
energy cost of operation of air pollution control technologies
by about 15 to 20 percent total.
So you are getting a 15 to 20 percent pollution subsidy on
your total energy production for everything that you produce
that comes off that coal fire power plant. I do not know a
single manufacturing firm in the United States that would not
love a 20 percent subsidy on their energy costs. This is deeply
unfair. It is unfair in terms of competitive sense, but also in
a climate and environmental sense, because that is Sulphur
Oxides (SOx), Nitrogen Oxides (NOx), and of course carbon and
other climate pollutants being pumped up into the air at a
deeply unfair rate, that advances our decline in terms of
climate stability.
One important way that we could counter this is that both
the United States and friends could levy a border fee that
corrects for this market imbalance and levels the playing field
in terms of both climate and other pollution values.
The figures behind this are known, and I know there are
several very good bills floating around the Hill right now,
both on the quantification side, but also on the particulars on
those measures and how we might work with partners.
Chairman Whitehouse. And that makes the perfect segue to
Senator Graham, who along with Senator Cassidy, has a bill to
that effect, and I would note that Ambassador Lighthizer, who
was President Trump's Trade Representative, is also a fan of
that policy.
So with that, let me turn it over to Senator Graham and
thank him again for helping put this hearing together.
Senator Graham. And I will thank you and Senator Grassley
for having it, because this is the first of many conversations
I think we are going to have. Mr. Schwietert, did I say your
name right?
Mr. Schwietert. Schwietert.
Senator Graham. Schwietert, I am sorry.
Mr. Schwietert. It is a mouthful.
Senator Graham. How about David? Okay. David. Are car
companies making electric vehicles because they have to or they
want to?
Mr. Schwietert. Senator, I think there is no question, as
you noted earlier, that electrification is the future. So for
purposes----
Senator Graham. Well, I mean is it the future based on
consumer demand or government policy?
Mr. Schwietert. I would say it is a mix. Obviously, I think
regulations are positive.
Senator Graham. Well, I agree. Mr. Jenkins, why does--does
China make electric vehicles because of climate policy?
Dr. Jenkins. No. It is primarily a response to its
strategic manufacturing policy and air pollution reduction
goals. They basically strategically selected electric vehicles
as an opportunity to leapfrog internal combustion engine
manufacturing, which is an area that the west, the United
States has obviously dominated.
Senator Graham. But it is not driven by climate. I mean----
Mr. Schwietert. It's not primarily driven by climate.
Senator Graham [continuing]. If you are really worried
about the climate, you would not use a coal fire plant to power
an electric vehicle plant, right?
Mr. Schwietert. Well, with China's average grid mix, it
actually does reduce greenhouse gas emissions relative to an
internal combustion engine.
Senator Graham. So are they making all these cars because
they are worried about the environment?
Mr. Schwietert. They are worried primarily about air
pollution and their strategic role in manufacturing in the
global market.
Senator Graham. Okay, Ms. Hinman. Why do we make electric
cars? Is it because of consumer demand or government policy?
Mr. Schwietert. My sense is it is, per my colleague to my
left, is because it is a combination of the two. But you know,
we are a market economy, so the government does work----
Senator Graham. Right. So some people want them, right? So
David, if we did away with the mandate or the goal of having
half the vehicle electrified, a government policy, by 2035 what
percentage of the cars on the road do you think would be
electric without a mandate?
Mr. Schwietert. Senator, that is a very good question. Last
year was 9.5 percent. So if we fast forward, it is hard to say.
A lot of it depends on how reliant we are----
Senator Graham. Well, let us just say we did away with the
mandate. Trump says he wants to do away--we will end the
electric car manufacturing in America.
Mr. Schwietert. No. However, we might have unbalanced
things as it relates to whether or not the U.S. is competitive
as it relates to some of those supportive policies. Whether it
is tax incentives or----
Senator Graham. Right.
Mr. Schwietert. Yes.
Senator Graham. So Ms. Hinman? Is that right, Hinman?
Mr. Schwietert. It is Hinman.
Senator Graham. Okay, all right. Is the dominance of China
irreversible in this supply chain?
Ms. Hinman. I believe not, absolutely not. I believe the
U.S. and its allies and friends, if we move quickly to create,
agile, responsive and coordinated policies, could flip the
script and reestablish market dynamics in the global economy.
Senator Graham. Okay. I want to talk to you about that in
more detail. So forget about what we do here, Mr. Jenkins. Does
everybody agree China is going to continue to make a bunch of
electric vehicles no matter what we do.
Dr. Jenkins. Correct.
Senator Graham. Everybody agree with that?
Ms. Hinman. Yes sir.
Senator Graham. For whatever reason, they are going to make
a bunch of them, and it seems to me that the supply chain to
make a battery, if we do not change our policy, is going to be
so dominated by China we may just have lost this entire area of
our economy. Is that fair to say, David?
Mr. Schwietert. Yes. Senator I would note, and this is
something that hopefully resonates with this Committee. If we
did not have the regulations, obviously electrification is the
future. If the U.S. is taking itself off the global stage for
competition, for instance, on average we are exporting two
million vehicles a year.
So if the U.S. is not competing on electrification and the
rest of the world is, we have got a real risk.
Senator Graham. Well, that is what BMW is trying to do and
Volvo in South Carolina. Can you be for EVs and against mining?
Mr. Jenkins.
Dr. Jenkins. Well, I think we would need to source the
requisite materials for the entire supply chain, and I will
note the environmental impact of that is substantially lower
than mining billions of tons of coal or billions of tons
equivalent of oil each year that light on fire.
Senator Graham. So if you--okay. That is good. So if you
are for EVs, you need to be for mining here at home. Does that
make--does everybody agree with that? If you are for EVs, you
need to have a robust grid. Do you agree with that, Ms. Gross?
Ms. Gross. I agree with that.
Senator Graham. Because the demand is real. Mr. Jenkins,
are you opposed to natural gas as being part of the future of
the grid?
Dr. Jenkins. Natural gas generation is going to remain a
part of the grid for quite some time, particularly for capacity
needs, so to meet peak demands. And so----
Senator Graham. So without natural gas, it would be pretty
unrealistic to meet the demand?
Dr. Jenkins. That said, we are going to see a reduction in
the amount of natural gas consumed by those power plants as we
scale up American renewable energy resources that can displace
gas burnt, if not the capacity.
Senator Graham. Yeah, but as a--is a baseload fuel, are
renewables going to get us to where we need to go without
natural gas and nuclear power?
Dr. Jenkins. Senator, we do not need a baseload fuel. We
need as a combination of resources that can meet all of demands
throughout the year. Renewables are great at supplying energy,
but they are reliably unreliable. We know they are not going to
be there all the time.
Senator Graham. So natural gas is----
Dr. Jenkins. And so gas power plants are dispatchable, as
well as nuclear power plants.
Senator Graham. This is a rational discussion. I know I am
18 seconds over here.
Chairman Whitehouse. That is okay.
Senator Graham. What I want to do is just think it through.
I am a car heavy state, and they are making EVs and I agree
with that. I think the mandate has probably pushed us. I do not
like it, but I think consumers are going to demand some
electric vehicles. China is not going to change their policy.
It seems to be a part of the future economically, and if we
do not watch it we are going to be out of the battery business.
And I would just like to have a rational approach to what I
think is an irreversible trend, that there will be more
electric cars over time not less.
And I think it would be a shame to not play in this space,
for whatever reason drives you, no pun intended. I think
America's got to make some real hard decisions quickly, and if
we do it, we will dominate this market, no matter how big it is
or how small it might be. I would like to dominate this market
for a lot of reasons, or at least be competitive.
I met with the Chinese Ambassador yesterday, and I will
close with this. I said we are going to have an honest
discussion about the way you produce electric cars. Get ready
for that discussion.
Chairman Whitehouse. I think before I turn to Senator
Merkley, there is a very significant bipartisan common cause
towards cleaner energy, lower emissions and taking back Chinese
dominance in this area, that they have achieved, to use Ms.
Hinman's words unfairly, through mercantilistic interventions
and cheating, essentially, in the marketplace.
So we need to have ways to respond to that, to make sure we
are not dependent on their supply chains for national security,
economic and climate safety reasons. And I think there is a big
bipartisan opportunity.
So I am delighted that we are having this, and Senator
Graham, I fully look forward to working with you to flesh out
what those strong bipartisan policies look like that support
our auto manufacturers and the workers who build these
beautiful vehicles.
Senator Merkley, and then here is the--here is the roster.
Senator Merkley, Senator Braun, Senator Kaine, Senator Johnson.
STATEMENT OF SENATOR MERKLEY
Senator Merkley. Thank you, Mr. Chairman, and certainly one
of the reasons there is so much interest in my home state in
electrics is because of what is happening right now. We have
121 fires burning in my state. Over one million acres have
already burned this year. Two weeks ago, we had more acreage of
flame than all the rest of the United States combined. Massive
impact on all parts of our state, both with the fires and the
smoke. We simply have to dramatically reduce the amount of
methane and carbon dioxide we are putting into the atmosphere.
But I will tell you another reason it is so appealing, is
because of the cost differential. Now Mr. Jenkins or Dr.
Jenkins, you were talking about the peak load pricing
challenge. My local utility offers a plan where if I am
charging after 9:00 p.m., it is 7.4 cents per kilowatt hour. If
I charge from 5:00 to 9:00 p.m., which is peak load in my area,
it is 33 cents.
So we have a little note on our dryer, reminding us to turn
it on after 9:00 p.m. But it really has an impact on simply
turning on our charger at 9:00 p.m. at night, and at 220 volts
our car is completely charged, even though it is depleted by
the next morning.
Mr. Chairman, you were mentioning the question of whether
we need a sophisticated system to tell the cars. This is a
system that does not require anything sophisticated. It is just
a pricing plan where people remember to turn on their electric
chargers for their chargers at night, and it shifts a huge part
of our electric consumption in that fashion.
Now let us take that cost that we are paying of 7.4 cents,
let us run it off to 8 cents. We get over 4 miles per kilowatt
hour. Basic math, it is costing us 2 cents per mile to charge
our--or to drive our car. Now we will take our gas and 40 miles
per gallon at $4, that is ten cents.
So it is five times more expensive to drive a fuel powered
car. Why do we never hear about this? If it was the reverse,
and driving your electric car was five times more expensive
than driving your fuel combustion car, you can bet every fossil
fuel company in America would be publicizing that.
Why do we not hear that it is five times cheaper to drive
an electric car? Dr. Jenkins, you want to comment on that?
Dr. Jenkins. Well, I do think you raise a great point,
Senator Merkley. We are at the early stages of this transition,
and I think we do need a lot more advertising and proactive
efforts to educate the public from the industry itself, from
automakers and dealerships, and potentially from public sources
as well. It is a significant cost differential.
The up-front purchase prices are higher, and that is
another reason why the tax credits established by the IRA are
critical to bring down that up-front purchase price. If you
build that into the cost of a lease, which many people are
turning to purchase new EVs, that is basically a $7,500
additional down payment on the--on the vehicle, and that covers
a large amount of the depreciation that you would normally pay
for in your lease payments.
And that is really the cheapest vehicles on the market
right now to lease in virtually every category are electric
vehicles. So it is not just cheaper when you operate it, it
could be cheaper on a monthly payment basis as well today.
Senator Merkley. Well, I have talked to a lot of folks who
previously were intimidated by those high up-front prices, and
they are buying used electrics. Now that we are this far into
it, they are buying a used Tesla, or a used whatever, and
because even though the amount of range declines modestly over
time, you are still starting with enough range. You have a lot
of range left.
I want to--so it is really becoming much more affordable to
middle class families through both--both points that you are
making, about leasing and about being able to buy a used
vehicle.
I want to turn to this issue that Senator Stabenow raised
about the charging stations. One of the things that has been
interesting is how slowly we developed a national standard for
the interface. We now have the North American charging
standard, the NACS standard.
Rivian has adopted it. Ford is adopting it or has adopted
it. Chevy is adopting it next year. So Mr. Chairman, your Chevy
Bolt, your next Chevy Bolt will be able to use the NACS
standard. And Nissan's adopting it.
So that is starting to become a solved problem. But one of
the ways we could rapidly expand the ability of folks who have
cars currently is to have electric charging stations--chargers
at rest stops. However, national law, federal law prohibits
that. Is that something we should change?
Dr. Jenkins. Yes.
Senator Merkley. Ms. Gross, would you like to comment on
that?
Ms. Gross. Well, we do not normally comment on policy at
EPRI.
Senator Merkley. Well, if you do not want to comment,
somebody else, anybody else want to comment?
Ms. Gross. However, more charging stations are, you know,
required. They are going to be necessary and they are going to
be required for consumers. If consumers demand it, they are
going to need it.
Senator Merkley. Yeah. Are all the charging stations that
are going to be deployed under the Inflation Reduction Act
going to have a NACS standard? Does anybody know the answer to
that?
Dr. Jenkins. I do not believe that is required, but it is
increasingly the case that all chargers are converging to the
NACS standard going forward, and there are adaptors now coming
to market that allow interoperability. There is already the
reverse. You can plug your Tesla into a Combined Charging
System (CSS) charge port with an adaptor.
I am still waiting for Ford to ship me my adaptor for the
Mustang Mach E, but they are sending them for free to all
owners of existing Ford vehicles. So this is going to become an
increasingly solved problem, as you noted.
Senator Merkley. This is the Magic dock adaptor, right?
Dr. Jenkins. Or just any others. So yeah. So that I am--you
can have your own adaptor you just carry with you in your
trunk.
Senator Merkley. Okay. Listen, my time is up. But I just
want to close with this, everyone. It is five times cheaper per
mile to drive an electric, and if you buy a used electric, you
do not have to worry about the up-front high cost because the
depreciation has been paid by somebody else, and it is a sweet
deal.
Chairman Whitehouse. And Dr. Jenkins had to show off that
he has a Mustang Mach E after I said I only had Chevy Bolts.
Senator Braun.
STATEMENT OF SENATOR BRAUN
Senator Braun. Thank you, Mr. Chairman. The average cost of
an electric vehicle is over $17,000 more than the average price
of a gas-powered vehicle. So we are doing a lot that is force-
feeding something in that is very expensive.
We have got other issues with it in the context of here, we
are borrowing now a couple of trillion dollars a year, where it
was just a trillion dollars six months ago, and everything we
do new, it is 100 percent borrowed.
I think what I am wondering, and I would like to ask Dr.
Jenkins, Ms. Gross and Ms. Hinman, given this context, do the
three of you believe that consumers should have the right to
choose the type of vehicle that best fits their own needs,
economic circumstances? Or do you think we ought to be
orchestrating this from here, when we have never even figured
out how to spend less than we take in, and we are currently
borrowing from these very same consumers and others around the
world, to the tune of $2 trillion a year currently?
Dr. Jenkins. Senator, I would say that consumers do you
have the option to choose the vehicles that best suit them. We
have a wide variety of offerings on the market today and no
requirement that anyone anywhere purchases an electric vehicle.
The prices are increasingly affordable as well, so this is
a moving target. Cost of batteries, which are the largest
component of an electric vehicle, have fallen by about 50
percent over the last three years. They are expected to
continue to decline going forward.
And so that cost premium, you said it is $17,000. I looked
right now in the compact SUVs category like, you know, a
Mustang Mach E or Tesla Model Y, the gap is about $10,000 up
front, and again, the cost of ownership is quite low. So the
total cost of ownership is already about at parity.
Senator Braun. Do you know the current federal subsidy that
goes into electric vehicles, what the amount is per vehicle?
Dr. Jenkins. It is up to $7,500 for the consumer purchases.
Senator Braun. Do you know what that is in total that we
are currently doing?
Dr. Jenkins. I believe I just read it was about 125 billion
or----
Senator Braun. And then would you agree that all of that is
being borrowed to push that onto consumers?
Dr. Jenkins. Well, CBO's estimate was that the Inflation
Reduction Act was more than paid for, so I am not sure I agree
with that.
Senator Braun. I would say that is a fake pay for, but
thank you for your opinion. Okay. We will go on to Ms. Gross
and Ms. Hinman.
Ms. Gross. Senator, thank you for that question. I will
just add, without commenting too much on the policy, I will
just add that consumers are choosing these vehicles. Senator
Merkley talked about the energy wallet, the fact that you can
feel it in your pocketbook when you do not have to go to the
gas station, and the cost of electricity is so much less when
you are charging an electric vehicle.
I will also say that truck drivers, data out there shows
that truck drivers actually like driving electric vehicles,
because you do not experience that fatigue that you have with
the rumble and the roar of a combustion engine vehicle. So this
issue of fatigue is also a safety issue.
So we are starting to see there is--there are reasons to
want to drive an electric vehicle, based on data that is out
there that are really extremely compelling for automakers and
truck drivers out there, and manufacturers.
Senator Braun. Thank you. Ms. Hinman.
Ms. Hinman. Yeah. Thank you so much, Senator. I think it is
a little bit of an uncomfortable conversation to have about the
fact that we have got a very large predatory market who is
influencing prices up and down the value chain, in ways that
U.S.--that Americans just cannot simply compete with.
And to me, this sense of sort of how much we are spending
is really hard to sort of square against the massive amount of
spend and predatory nature that occurs from the Chinese
Communist Party. You know, in a perfect world this would be a
pure, you know, a global market, right? And we would not feel
the need to have to subsidize in the way that we do.
I do think there is scope for new tools, particularly trade
policy tools and environmental policy tools at the border. But
certainly, you know, I think some of these distortions we have
to kind of appreciate its source, which is not coming from
Americans, but it is coming from an adversary overseas.
Senator Braun. Thank you, and I have got one more question.
But I would like to also tell you that it was about nine months
ago, and I was holding up a letter from 4,000 dealers that said
please do not send us any more EVs. I am for the cleanest,
least expensive and like the idea that it is out there as a
choice.
But 4,000 dealers said they are choking on them. It is even
hurt their own enterprises to have to tie it up, because they
are not moving at the speed at which the government would like
to see it, even when they are offering $7,500 a pop.
I have got one more question, and I would like a yes or no
answer on the part of all of you. I am for whatever is going to
be the cleanest, least expensive fuel in the long run, and even
how that impacts electric generation, transportation, the whole
gamut.
There has been a very robust discussion in the Senate
Climate Caucus on that, which I was part of that. We still have
great conversations. But a lot of it says that so much of this
is going to be due to technological breakthroughs in the
future, and as much as we would like to see those results in
the present, we either cannot afford it, just does not make
sense to do it.
Now as it relates to electric vehicles, to all witnesses
does the U.S. currently have the grid capacity to sustain a
growing domestic vehicle fleet, that is being mandated on
consumers by policies from the Biden administration? And
respecting time, just give me a yes or a no. Dr. Jenkins.
Dr. Jenkins. We can expand the grid at a pace that is
sufficient to accommodate all of those EVs, as we have in the
past. This is not an unprecedented challenge. It is one that
American utilities can easily meet.
Ms. Gross. With planning and investment, the pace can be
met and the grid can be ready.
Ms. Hinman. Yes.
Mr. Schwietert. We can meet--we can meet the demands today,
and we need to plan for the future, absolutely.
Mr. Davis. Yes. If you start today and anticipate where the
EV demand will be ten years from now, you can get there.
Senator Braun. Thank you so much.
Dr. Jenkins. Mr. Chairman, can I correct the record on one
of the statements I just made. The total tax outlays this year,
according to Treasury are $1 billion for the EV subsidies to
date. So that is through the first half of this year. I think I
misspoke by several orders of magnitude, so I apologize about
that.
Chairman Whitehouse. Thank you, Dr. Jenkins. Senator Kaine.
STATEMENT OF SENATOR KAINE
Senator Kaine. Thank you, Mr. Chair and I--I love walking
in and seeing the title of the hearing ``Bipartisan Senate
Budget Committee Hearing.'' And I appreciate that this has been
a hearing and a discussion with witnesses who are really trying
to explore an opportunity that has a real upside, that is going
to need some planning and investment.
In Virginia, there is 100,000 electric vehicles on the road
in my Commonwealth of eight plus million people, and those who
charge at their home pay about a dollar a gallon. That is what
folks in Virginia are paying if they charge at their home.
We need to have some advances in charging. In Richmond
where I live, a lot of people do not have driveways, apartments
or multi-family communities. So more curbside, rest area. We
need to make sure in the deployment of charging technologies we
are not just look at passenger vehicles, but we are also
looking at trucks.
Every Volvo Mack truck that you see on the road in North
America is made in Dublin, Virginia, which is in Appalachia,
about 3,000 workers there. In the last ten days, the Department
of Energy (DOE) announced a $208 million investment through the
Inflation Reduction Act, to match an equivalent investment by
the company to expand electric vehicle production.
I would encourage, if anybody ever wants to do something
fun, come with me to Dublin and drive an over-the-road Volvo
Mack truck on their test track. It is about a three mile test
track. You will get in that vehicle and it is so smooth you
think you are going 35, and I looked down at the speedometer, I
was going 65.
The point about fatigue was remarkable. A diesel truck just
has this kind of low grade rattle that really takes a toll on
over-the-road drivers if they are in that truck for multiple
hours a day, whereas the electric vehicle is as smooth as can
be.
And so it is going to be kind of a fatigue health
improvement for those who are doing this job. It is hard to
recruit enough over-the-road drivers now. I think this is a
technology that might make it a little bit easier.
But in addition to the $208 million investment into the
Volvo plant through the IRA, there has also been the
announcement in the last year of an $100 million investment
through DOE to a company called Microporous, a company that
will manufacture separators for lithium ion batteries that are
necessary for the EV supply chain, and that is likely to land
in rural Southside Virginia near Danville.
Both Dublin, Virginia and Danville, Virginia are in
economically hard-hit parts of the state. They are both in
rural Virginia. Talk a little bit about how the growth of an EV
supply chain could be a powerful economic development tool for
rural America.
Dr. Jenkins. Thanks, Senator. Look, my father is from
Youngstown, Ohio. I grew up in Oregon in the shadow of the
timber industry and forest products industry that had decayed
during my childhood.
I have been hearing, you know, politicians talking about
bringing manufacturing jobs back to America literally my entire
life, right, and we are finally doing it, right? We are seeing
those investments now across, you know, EVs, clean energy,
batteries, semiconductors, et cetera.
So we are already seeing over $140 billion of announced
investment in battery manufacturing and supply chain capacity
across the country, and $57 billion in EV manufacturing. That
is since the Infrastructure law passed. That could support over
240,000 jobs.
And we all know these are more than just the direct
employment, right? These are anchor employers in these
industries or in these communities. And over--the vast majority
of those are located in rural and exurban communities or
communities who are designated as energy communities by the
Inflation Reduction Act.
So these are exactly the communities that are seeing a
renewed economic future.
Senator Kaine. And say that last point--say that last piece
again. The vast majority----
Dr. Jenkins. Yeah. So the vast majority are in rural and
exurban areas, and the energy communities that have
traditionally relied on fossil fuel extraction processing or
transportation that were designated by the IRA.
Senator Kaine. This is a hearing about electric vehicles,
but the same week that the announcement was made about DOE
supporting the manufacturing of electric over-the-road vehicles
in Dublin, there was also an IRA-driven announcement of $100
million to a facility that is opening up in Chesapeake,
Virginia, which is in the Hampton Roads area, metropolitan
area.
But it is going to manufacture in the United States for the
first time the cables that connect to offshore wind and put the
power into the grid. All of this has been manufactured
overseas, because we did not have an offshore wind industry.
Now because of the IRA, we will be manufacturing those
cables, and not just for use in U.S. offshore wind. Those
cables, and the company is a Korean company that is investing
in Virginia, will be manufactured in the United States and then
sold to offshore wind development all over the United States.
Just another example of an IRA success story.
Okay. Now here is a personal story that is embarrassing. I
got stuck in my car for 27 hours in January of '22, driving
from Richmond to D.C., and it was 18 degrees when the sun was
up. It was colder overnight, and it was a freak snowstorm and
the signs on the highway said proceed with caution.
They did not say ``turn around and go home''; they said
proceed with caution. I proceeded with caution and I was stuck
for 27 hours. My senior Senator, Mark Warner, said I would have
gotten Seal Team 6 to come out and get me. You sat there with a
Dr. Pepper and an orange for 27 hours.
There was a lot of concern about what would happen to
electric vehicles. I had--in a gas vehicle, I had to, you know,
run the engine for ten minutes with the heat at full blast,
turn it off until the car got too cold an hour later and do it
again, to try to take my half tank of gas and make it work.
And there was a lot of questions about what would happen to
electric vehicles that night. I have never introduced into the
Senate Record an article from Kelley Blue Book, but I just--
there is a first time for everything.
Kelley Blue Book did a study. They reached out to people
who had been stuck in that snowstorm who were driving Teslas or
other electric vehicles, and they found out that they actually
performed better than gas vehicles, and that the way electric
vehicle engines work, you can operate just a small portion of
the engine that runs the heater. You do not have to have the
engine running for the whole car.
It does drain the, you know, the reserve, but very slowly.
When finally the traffic started to move, it was blocked by the
fact that so many vehicles had run out of gas, that even trying
to move on the ice-driven roads, you were kind of like a Jenga
game. You were kind of moving here, there and everywhere to
kind of get around them.
But it turned out that the electric vehicles performed
quite well in those adverse conditions. And so Mr. Chair, if I
could, let me introduce this article from Kelley Blue Book ``I-
95 Traffic Nightmare: What if You Were Stuck in an Electric Car
for 24 Hours'' into the record.\10\
---------------------------------------------------------------------------
\10\ Statement submitted by Senator Kaine appears in the appendix
on page 153.
---------------------------------------------------------------------------
Chairman Whitehouse. Without objection, it shall be entered
into the record.
Senator Kaine. I yield back.
Chairman Whitehouse. And we turn now to Senator Johnson,
who will be followed by Senator Van Hollen.
STATEMENT OF SENATOR JOHNSON
Senator Johnson. So to prove my environmental bona fides
here, I have a--my wife has a hybrid SUV, a pretty good-sized
one, and we have actually had up over 30 miles per gallon. That
is when she plugs it in. Every now and again she does, and so I
think we are down to about 28 right now. So we watched that,
okay.
Now I have always wondered, and it is interesting. Senator
Kaine, you mentioned a dollar a gallon. Is that a--I do not
know. I have never heard really what does it cost. Is that--is
that about right, that it is an equivalent of about a dollar a
gallon for gas to charge an EV versus what it costs on the--for
a gallon of gas? Whoever has got the information.
Dr. Jenkins. Yeah. Senator, I think that is fair. Obviously
it is going to base largely on the utility rates. But I think
the working number is anywhere from, you know, two-thirds less
costly compared to a gallon equivalent. So whether it is $1 or
$1.50.
Senator Johnson. So I would say it is about a third of the
cost. Again, that is pretty attractive, okay. You have got the
smooth ride. You have got fast acceleration. There is a lot of
benefits, okay, as well as--and in fact if you are just using a
hybrid like my wife does driving around town, she never even
has to use gas. So I am not opposed.
But my question is, if they have got so many market
appeals, why do we need government subsidies? Take it up. I
would say you do not. We should end them. Mr. Schwietert.
Mr. Schwietert. Sure, Senator. Obviously, you are talking
about affordability generally, excuse me. Obviously, when it
comes to the record number of products, it is both the
industrial policy as well as, you know, the marketplace
dynamics.
Senator Johnson. Well I--we mess up when we--you know,
government does not do very well. For example, we spent 7\1/2\
billion dollars to do charging stations. After more than two
years, we have got seven of them, you know. Tesla was talking
about we have run--we have basically run the Highway Trust Fund
into insolvency, and we have not really fixed that.
You know, why is--why is China producing all these electric
vehicles? For its own home market? It is for central planning,
industrial engineering in other countries; correct? Is there
any major western country that does not subsidize EVs, because
of climate alarmism? How many U.S. automakers are making money
producing EVs?
Mr. Schwietert. Senator, as I said in my remarks, we are in
the early innings. This is a marathon, not a sprint. So yes,
costs are going to have to come down.
Senator Johnson. Yeah. Well, how much are they losing on
average?
Mr. Schwietert. It depends on the manufacturer and their
product cycle.
Senator Johnson. So why are they doing it?
Mr. Schwietert. It ultimately----
Senator Johnson. Because they are getting government
subsidies, right? The consumers are being subsidized and the
automakers are also being subsidized, correct, and the mandate
we are talking about are the things like cafe standards that
coerce them to offer EVs, so they can produce vehicles that
American consumers do want.
I mean I would never go to 100 percent EV. Happy to do the
hybrid. Happy to be environmentally friendly. I want the
comfort of having an internal combustion engine.
Mr. Schwietert. Yeah. Senator, as it relates to the recent
auto standards, we have been pretty clear with the Biden
administration. Obviously, we need to ensure that there is
alignment as it relates to where the market is, as well as
encouraging----
Senator Johnson. Well, there will not--there will not be
alignment with where the market is. Government is not that
smart. I mean honestly, $7.5 billion. We have seven charging
stations. We have run the Highway Trust Fund back 2008
insolvent. We have not fixed that problem, and we are going to
have this command economy, and we are going to plan for a
growth in the electrical grid?
By the way, we do not have the mining capacity. I would
argue we really do not have the electrical capacity. Those
climate alarmists are generally opposed to nuclear, which
certainly would be part of the problem. China dominates the
battery industry and our subsidies are providing a market for
China's command economy. How does any of this make sense?
Dr. Jenkins. Senator, just with respect, our subsidies are
targeted to U.S. manufacturing of batteries through 45X, and
the consumer EV tax credits are specifically designed to excise
China from the supply chain.
Senator Johnson. How many consumers have experienced the
cost of replacing a battery in an EV?
Dr. Jenkins. It is an extremely rare occurrence.
Senator Johnson. What percent? What percent?
Dr. Jenkins. It is an extremely rare occurrence.
Senator Johnson. It is going to--they do not last forever,
do they? How long do they last?
Dr. Jenkins. Neither does the--neither does an internal
combustion engine car or transmission.
Senator Johnson. There are cars on the road from the '30s
and '40s and '50s. How long is an EV battery going to last, and
what is the cost to replace it?
Mr. Schwietert. EV batteries account for anywhere from 30
to 40 percent of the up-front cost. Obviously, there is
warranty and durability built into those batteries. But yes----
Senator Johnson. How long do they last?
Mr. Schwietert. The battery itself can last quite some
time, and then of course it can be repurposed and reused.
Senator Johnson. How long?
Dr. Jenkins. A couple of hundred thousand miles at least.
We have had Teslas on the road with that many miles already.
Senator Johnson. And it is going to cost how much, 10, 20
thousand dollars to replace?
Mr. Schwietert. Well, that is the cost today.
Senator Johnson. What about recycling of them? What about
recycling of wind turbines? Now I am seeing these pictures of
these massive dumps of these wind turbines just collapsing
and--again, this--it does not make economic sense, because
government is trying to essentially plan, and government is
awful at it.
Ms. Hinman. I just wanted to pipe in if I could, sir.
Senator Johnson. Sure.
Ms. Hinman. On battery recycling. Batteries are eminently
recyclable and are----
Senator Johnson. Not these. Not the lithium batteries. We
do not have the capacity for doing it right now. We have not
developed a way of doing it.
Dr. Jenkins. We're building that capacity.
Ms. Hinman. We are building that capacity, and certainly
the U.S. is a leader in the standards----
Senator Johnson. Kind of like what Senator Braun was
talking about. Yeah, we have to rely on all these technological
innovations we do not have yet. Let us face it, they have been
trying to innovate batteries for decades and really have not
been able to do it, have they?
Dr. Jenkins. I am not sure I would agree with that. The
costs have fallen dramatically. The density has doubled in the
last nine years or seven years. So battery innovation is
dramatic and with support----
Senator Johnson. That is good. So let the marketplace
dictate the speed of this innovation. Stop subsidizing this.
That is my only point.
Again, I am not opposed to it, but I am opposed to
government intervention in the marketplace. We just screw
things up and as Senator Braun said, we cannot afford it. $35
trillion in debt. How are we going to afford all this stuff?
Thank you, Mr. Chairman.
Chairman Whitehouse. Senator Van Hollen.
STATEMENT OF SENATOR VAN HOLLEN
Senator Van Hollen. Thank you, Mr. Chairman. Thank all of
you for your testimony. I would just make a couple of points at
the outset. When you have a huge, what economists call
externality, which is climate change, I know some of my
colleagues do not really believe in that as a threat.
But that is exactly where you want government action, and I
also heard Senator Graham at the outset talk about how China
will potentially and is right now on a road, if we do not do
something about it, to eat our lunch.
I mean the reality is countries around the world, consumers
around the world are going to be purchasing electric vehicle,
and either we are at the top of our game or we are going to
left dramatically behind. So that is why I am pleased that
Maryland is one of the states that has set very ambitious goals
in terms of EVs.
Target for 300,000 by 2025, and we are one of 15 states
that have committed to ramp up the electrification of medium
and heavy duty trucks, so that all sales of those vehicles are
zero emission by 2050. There has been lots of evidence of the
health benefits of this.
The Rocky Mountain Institute estimates that among the 15
states that along with Maryland are participating in this
effort, they will see fewer premature deaths, 477 fewer
premature deaths, and over 6,000 fewer asthma incidents per
year, and that is 3.5 billion a year.
And that is on top of the climate benefits. I think it is
important to point out to my colleagues that heavy duty trucks
and medium trucks account for only ten percent of vehicles on
the road, they produce about a quarter of the overall
greenhouse gas emissions. So one of the challenges that Volvo,
which is a company in Hagerstown, Maryland is facing, and they
developed the power train manufacturing, the power trains.
They have a facility there. One of the issues they have
there is the issue of charging infrastructure for medium and
heavy duty trucks. So Ms. Gross, could you briefly describe
some of the challenges we are facing in this particular sector,
and what we should be doing about it?
Ms. Gross. Thank you Senator, for that question. Let me
focus on the solutions first, and then I will go to maybe recap
on some of the challenges. The most important thing that we can
do in this sector for heavy duty-medium duty sector, is to get
pilot programs out there.
It is amazing what fleet operators learn by just purchasing
and putting into their fleet the first one or two trucks,
understanding what the relationship has to be with the utility,
understanding what charging is, how it works, what it means to
discuss rates and off-peak times and on-peak times, and what
the economic opportunities are to actually work with the
utility on those rates.
So the fleet, this idea that we need to continue pilot
programs is really important. It is not the ones that have
already started, but every fleet in the country should start to
understand what it would mean to actually have that experience
behind you.
Once you have that experience, you make better decisions
about right-sizing charging and right-sizing the grid
requirements for it. We need to prioritize feeders. Where are
these truck loads likely to show up? So you have got the
eRoadMAP out there that describes and shows you visually where
the loads are expected to come from.
We have got Volvo data, Daimler truck data, we have the
telemetry. We know where diesel vehicles travel throughout the
country. So being able to prioritize where they are today and
where they are likely to be when they are electric is super-
important for prioritizing these investments on the grid.
And then finally, one interesting thing is we are kind of
going about this piecemeal today. This holds true for light
duty vehicles as well. But on the medium and heavy duty
trucking sector, where these loads can be very concentrated at
a local distribution systems, we wait, you know.
The utility industry can really only invest once a customer
shows up and says hey, I have got this load coming. Can you
please, you know, upgrade the grid for me, I am coming with
this charging load.
If we would step back and consider, you know, in its
totality how much load is coming, when more fleets, 20 percent,
40 percent, 80 percent, we could do a better job up front, a
more cost effective job of putting these solutions in place.
And so almost--I would encourage everyone to focus on sort
of those big nuances about the trucking sector that are
important, and this whole timing mismatch. I know that that is
on top of mind for Volvo as well, the timing mismatch between
the time it takes to upgrade power to a site, versus the time
it takes to order a few semi trucks.
I said in my testimony earlier, I can order a fleet of
semi-electric trucks and they can be delivered in four to six
months, and the grid upgrades probably cannot be made in those
same four to six months. So we have got to get ahold--we have
got to get ahead of this.
Senator Van Hollen. Right. So this is the issue. I mean
Volvo is actually losing orders right now from people that want
to, you know, purchase these electric medium and heavy duty
trucks, but cannot because of this issue of charging stations.
So I hope we will, on a relatively urgent basis, move
forward. I mean this is the sort of chicken and the egg problem
we have seen in other parts of this sector. I may have some
questions to submit for the record, but I see my time is up.
Thank you, Mr. Chairman.
Chairman Whitehouse. Senator Van Hollen, Senator Graham and
I spoke earlier about trying to pull together some bipartisan
technical recommendations for facilitating the transition in a
whole variety of ways. Things like supporting peak-shaving and
this would be another good example.
So I look forward to working with you on that, and thank
you very much for your interest, and now we turn to Senator
Kennedy.
STATEMENT OF SENATOR KENNEDY
Senator Kennedy. Thank you, Mr. Chairman. Welcome to all
our witnesses. I am sorry I was late. I was in another
committee. How many of you drive an electric car, own an
electric car?
(Show of hands.)
Okay. You gentleman do not?
Dr. Jenkins. If you mean electric by a battery electric,
no. If you mean plug-in electric, yes.
Senator Kennedy. Okay. Of the three folks who raised your
hand, how many electric--do you own gasoline powered cars at
all? No?
Mr. Schwietert. No, Senator.
Senator Kennedy. No, no. All electric. Okay. Let me ask you
all this, and please give me brief answers, because I am only--
there are five of you and there is only one of me, okay? If
electric cars are so swell, how come we have to pay people to
drive them?
Dr. Jenkins. The up-front costs of an electric vehicle are
about $10,000 higher today than they are for an equivalent
internal combustion engine vehicle today----
Senator Kennedy. Well, they are more expensive. Anything
else?
Dr. Jenkins [continuing]. But that cost is declining
substantially. So this is a temporary intervention to help the
auto industry strategically compete in global markets, and to
transition as battery costs fall.
Senator Kennedy. You did not hear my admonition, okay.
Dr. Jenkins. Sorry.
Senator Kennedy. But how about if electric vehicles are so
swell, how come we have to pay people to drive them?
Ms. Gross. I think I will--sorry, Senator. I'll stay away
from----
Senator Kennedy. I am sorry. I cannot see the names.
Ms. Gross. Oh I am--it is Gross, Ms. Gross here. I will--
I'll defer to not comment on policy questions about incentives
and so on.
Senator Kennedy. Would you start over?
Ms. Gross. I was just going to say I would like to defer on
policy grounds not to talk about policy, incentives, and so on
and defer over to my colleague, Ms. Hinman.
Senator Kennedy. Why not? You do not believe in electric
cars?
Ms. Gross. Oh, totally support electric vehicles and drive
three of them myself.
Senator Kennedy. So if they are so swell, how come we are
having to pay people to drive them?
Ms. Gross. So just speaking personally then, not
representing my company at this point----
Senator Kennedy. Sure. Who is your company?
Ms. Gross. EPRI, the Electric Power Research Institute, and
I have to be careful about policy, stepping into--wading too
deeply into policy as an independent leader here. But when I--
when we think about again, I just want to ditto what Dr.
Jenkins said. This is an effort to compete globally.
Senator Kennedy. Yes ma'am. I know all that. But how--if
they are so swell, how come we have to pay people to drive
them?
Ms. Gross. Well, maybe then the quick answer for me is I
did not take advantage of incentives. But I also bought used
vehicles on the market. I love it. They are wonderful to drive.
That is all.
Senator Kennedy. Okay.
Ms. Hinman. Senator, similar for myself. We purchased----
Senator Kennedy. What is your name?
Ms. Hinman. Maureen Hinman.
Senator Kennedy. Damn----
Ms. Hinman. My hair is longer in my picture, sorry.
Senator Kennedy. I am sorry. I do not even know who I am
talking to. Go ahead, Ms. Hinman.
Ms. Hinman. I did want to follow up with my colleague, Ms.
Gross. I purchased my first EV, fully electric, in 2015.
Senator Kennedy. Yes ma'am. But if they are so swell, how
come we have to pay people to drive them?
Ms. Hinman. Well, I purchased--I can only speak for myself,
but we purchased our first vehicle in 2015 because it was
easier to charge, cheaper to drive, it drives better, faster,
smoother. There is no muck on the bottom of my garage. And
frankly when I had my first child, some of the safety features
were just better.
Senator Kennedy. Oh, but here is what I am--I am sorry, you
are not answering my question. How many vehicles--how many cars
do we have in the United States?
Dr. Jenkins. 280----
Senator Kennedy. This lady right here. In the middle. I am
sorry. If I could see your name, I would not just point to you.
Ms. Gross. If I could, I would like to defer to my
colleague, who has a better----
Senator Kennedy. Well, I want to hear your answer, okay?
Ms. Gross. How many cars?
Senator Kennedy. How many cars are there----
Ms. Gross. 295 million.
Senator Kennedy. Okay. And what percentage are electric
vehicles?
Ms. Gross. 1.6.
Senator Kennedy. Okay. Hold up that chart. Here is where
all the electric vehicles are. California loves them. The west
coast loves them. Everybody else is kind of lukewarm, okay. I
am trying to understand why. But let me move on to this.
Let me ask these two gentlemen. I think the reason is is
because they are more expensive, and people do not--people,
when they drive a car, like it to run, and when it runs out of
electricity it stops, and they cannot find a place to charge.
So let me ask these two gentlemen, I do not want to be
unfair. So it is clear we have got a long way to go. We have
got 283 million cars in America, and we have got 3.3 million
electric vehicles.
We have got a long way to go, and at least these three
folks think that we need to take taxpayer money and give enough
money to the American people, so they will walk away from gas
cars and drive electric vehicles.
How much is that going to cost? I am going to ask them in a
second, if I have time. But how much do you think it will cost
for us to basically bribe every American to drive an electric
car?
Mr. Schwietert. Well Senator, excuse me. Dave Schwietert
with the Alliance for Automotive Innovation. I would just
underscore your original question with this. There is really
two things at play as it relates that what is happening.
Senator Kennedy. How much money do you think it will cost
to bribe the American people enough to make them drive electric
cars, to move those numbers?
Mr. Schwietert. Electrification is increasing as it relates
to cost. Only a fraction of currently eligible vehicles are
eligible for the federal tax credit so----
Senator Kennedy. How much do you think it will cost?
How much do you think it cost David?
Dr. Jenkins. Senator, I think I quoted earlier that----
Senator Kennedy. I am not calling on you, sir. How much do
you think it will cost?
Mr. Schwietert. It ultimately depends on consumer adoption.
Senator Kennedy. You do not know do you?
Mr. Schwietert. We do not have an exact figure.
Senator Kennedy. You think we ought to just keep throwing
money at it until we hit the jackpot. How about you, Mr. Davis?
Mr. Davis. Eventually, if you put enough charger stations,
that will stop the range anxiety, because the reason I did not
buy one is because I may have to drive 450 miles to East
Tennessee----
Senator Kennedy. How much do you think it will cost the
American taxpayer, for us to convince the American people,
frankly just bribe the American people, to get rid of a gas car
and drive an electric car? Have any of you--can any of you give
me a figure?
Dr. Jenkins. Yeah Senator, the Treasury Department reports
we have spent a billion dollars year-to-date. So for the first
half of this year, so roughly $2 billion this year. As I
noted----
Senator Kennedy. Well, we are behind. How much do you think
it will cost, Doctor? You are a doctor, right?
Dr. Jenkins. So $2 billion this year is what the estimate
from the Treasury Department is.
Senator Kennedy. Okay. How much do you think it will cost
for us to let us say get 75 percent of these 200 million----
Dr. Jenkins. How much will it cost American consumers to
remain----
Senator Kennedy. How much? Do you know how much it will
cost, Doc?
Dr. Jenkins. No one knows the future with certainty,
Senator.
Senator Kennedy. Right. You just think we ought to keep
throwing money at it until we hit the jackpot.
Dr. Jenkins. I think we ought to set a stable policy
framework that allows American consumers to become familiar
with the environment, and American businesses to innovate and
to compete within that stable framework. That is what I said in
my testimony.
Senator Kennedy. And how much will that cost?
Dr. Jenkins. It will cost less than the benefits delivered
by the policy.
Senator Kennedy. You do not care how much it costs, do you?
Dr. Jenkins. I care if the benefits exceed the costs. I do
not care about the costs if they are investments in the public.
Senator Kennedy. You do not care how much it costs, do you?
Dr. Jenkins. I care very much how much it costs. As long as
the benefits exceed the costs, that is an investment worth
making.
Senator Kennedy. Well, okay.
Dr. Jenkins. How much does it cost to cede the industries
of the future to China?
Senator Kennedy. I get to ask the questions, Doc. You are
at Princeton, right?
Dr. Jenkins. That is correct.
Senator Kennedy. Yeah. How are Jewish students doing at
Princeton? Are they feeling better?
Dr. Jenkins. That has nothing to do with the hearing today.
I do not have any comment on that.
Senator Kennedy. I did not think you want to--I did not
think you would want to talk about that. Do any of you have any
idea how much it would cost if say 75 percent off the American
people are driving electric cars?
Mr. Schwietert. Senator, if I could, your question is fair.
One answer to it is the cost of inaction of the U.S. not
competing is far greater than any incentive on the front end.
Senator Kennedy. Okay. Quantify that for us? Oh man, I am
way over. I am sorry, Sheldon. Quantify that for me, because
here is my----
Chairman Whitehouse. Why do you not wrap up with this,
because I think everybody has had a chance to try to answer
your question and you are still repeating it at this point.
Senator Kennedy. Okay, I will. Here is my problem. Okay. We
all want clean air, we all want bright water. We all want to
eat and we all want to live indoors, okay. But there are
tradeoffs in all of this. Despite what the Princeton professor
thinks, we do not have unlimited money. This is not Princeton.
So we have to decide the cost and the benefits, and nobody
seems to be able to quantify the costs. They just say ``keep
throwing money at it, throwing money at it, throwing money at
it,'' and nobody can really quantify the benefits except if we
do not do it, then we are all going to die.
And when I go back to my people and say your electricity
costs have gone up 30 percent, but it is for a good cause. Why
Kennedy? Because you are going to die if we don't do it. Why
Kennedy? Because a professor at Princeton says so.
That does not work for most Americans. Can you answer that
for me? You see my frustration. I love--I love driving an
electric car. I think they are really cool. But the median
household income in my state is $55,000. Our Princeton
professor probably makes that in a week, okay. They do not care
what they think at Princeton. Can you answer that for me, guys?
Ms. Hinman. I can't answer how much it is going to cost,
but I can tell you that just last year alone, China in the EV
market subsidized it by $12.4 billion, and that is their annual
spend. It is more than--even with our--in our best year, it is
more two-thirds what the United States spends.
Senator Kennedy. And China is doing great. But let me ask
you a question. How much will it cost China to become carbon
neutral by 2050?
Ms. Hinman. I am very concerned--they will not. But I am
more concerned about the risk to the U.S. economy of losing the
auto manufacturing industry.
Senator Kennedy. How much would it--how much would it cost
them? Do you know? See, nobody talks about the cost. I will
tell you how much it will cost them. It will cost them a
trillion dollars a year starting today to be carbon neutral by
2050. Do you know how much it will cost Russia? $250 billion a
year, three times what their defense budget.
Now if you believe that Vladimir Putin is going to spend
$250 billion for--for climate change, then you never owned your
own home. So we are going to spend all this money, which y'all
cannot quantify. We just keep spending. They do not spend the
money. They are at an advantage and you know how much world
temperatures are lowered? None. Zero, zilch, nada.
And I cannot believe our Chairman has not cut me off, but I
am done.
Chairman Whitehouse. Now is your moment.
Senator Kennedy. I am done.
Chairman Whitehouse. Thank you, Senator Kennedy, for your
enthusiastic participation in this hearing.
Senator Kennedy. I just wish we had time to talk about all
this. I think this is fascinating.
Chairman Whitehouse. We will wrap up with a couple of
clarifications. First of all, the word ``mandate'' has come up
repeatedly during this hearing, and I just want to make sure
everybody understands. There is no mandate.
What there is is a tax incentive, and for those of us who
believe in traditional economic policy, what the tax incentive
is there to do is to offset the negative externality of all of
the pollution that comes out of an internal combustion engine
that society at large pays for, but is not baked into the price
of the vehicle. And you can go all the way to Milton Friedman
to get the economic theory that supports that.
Second, EVs have been more expensive than internal
combustion engine, largely because of a market decision by the
electronic vehicle innovators come in at the high end of the
market. Because Tesla, for instance, could compete with
Maserati and Lamborghini on performance.
And so of course they came in at the high end of the
market, particularly when you are starting with small initial
manufacturing runs. But as the market has grown, costs are now
coming down to where it is maybe a thousand, two thousand
dollars' difference between the average EV cost and the average
internal combustion engine cost, just around $50,000 in each
case.
There are available electronic vehicles that are less
expensive than the average internal combustion engine now. So
depending on what you want to choose, if you want to go and
compete with Maseratis, you can go to the high end. But they
are also cheaper than average internal combustion electric
vehicle options.
And the last thing I will point out is that while tire
emissions are obviously real and tire emissions are greater
from an electric vehicle than internal combustion vehicle
because the electric vehicle is (a), heavier because of the
battery, and (b), higher performance because it is higher
performance. So you have more tire wear and that creates some
additional measure of tire wear-related pollution.
To complain about that in the context of tailpipe pollution
and tailpipe emissions, calls to mind the old biblical verse
about the moat in your own eye or moat in your brother's eye
compared to the beam in your own eye. The beam here is tailpipe
emissions, which pollute enormously and create massive climate
risk.
I agree that tire emissions need to be dealt with, but if
you put them to scale and compare their hazard for humankind
and for local health, it is moat versus beam.
So with that, let me say that questions for the record are
due by noon tomorrow, with signed, hard copies delivered to the
Committee Clerk in Dirksen 624. In particular, Ms. Gross and
Dr. Jenkins, if you could even perhaps coordinate
recommendations for us in that peak shaving space.
However you want to do it is fine, but I would love to get
those in, and we ask that our witnesses respond to those
questions within seven days of receipt. So that would be within
a week, if you guys could do that. With no further business
before the Committee, the vote on the floor has already begun,
and our hearing is adjourned. Thank you.
[Whereupon, at 12:06 p.m., Wednesday, July 31, 2024, the
hearing was adjourned.]
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