When I think of American industrial might, I picture hard-working union workers on an immense assembly line, building the automobiles that first brought widespread freedom of movement and continue to shape our daily lives today.
Unfortunately, that picture could soon become one for the history books – unless we act quickly.
That’s because as things stand now, the industry these workers created is headed to China. Which means the American worker and the American environment will suffer if we don’t take drastic steps to invest in the cars of the future – emissions-free electric vehicles.
Thankfully, the Green New Deal resolution introduced in Congress in early February is calling for:
“[O]verhauling transportation systems … to remove pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in … zero-emission vehicle infrastructure and manufacturing….”
The next step is turning this resolution’s goals into real policy. In doing so, we have the opportunity to protect and create millions of American jobs.
Of course, the main reason the Green New Deal is focusing on an emissions-free transportation sector is that gasoline-powered automobiles are a climate crisis and a public health crisis rolled into one.
We’ve heard overwhelming evidence about how cars harm the environment. Transportation now emits the most greenhouse gases of any sector in the in the US, accounting for 28.5 percent of climate emissions.
But our vehicles also make us sick, emitting harmful air pollutants that cause asthma and other lung ailments. And these health problems are not impacting everyone equally.
A recent study by the Union of Concerned Scientists in California showed that African Americans are exposed to 43 percent more air pollution from vehicles than white Californians, and Latinos 39 percent more than whites. The same study found that California households earning less than $20,000 per year are exposed to 25 percent more particulate matter pollution (PM 2.5) than California households earning more than $200,000 per year.
The bottom line: people of color and low-income families breathe dirtier air than white and well-off Americans. It’s beyond unfair and it’s not the country we want.
The case for cleaning up transportation on environmental and public health grounds is compelling. And part of the answer is much more spending on public transportation. But if we want a just transition to a clean economy, we also need to focus on jobs in the auto sector.
The Future Is Electric!
Here’s a fact that might surprise you: Many automakers see the big picture.
Our automakers want to transition to a pollution-free future of all-electric vehicles. GM CEO Mary Barra has articulated GM’s “path to an all-electric future,” and the head of Ford’s electric vehicle division says his department’s task is to “set the future trajectory of the company.”
Unfortunately, these same companies don’t think their future is in the US.
The Future is
GM, Ford, and Fiat Chrysler are no longer interested in building or selling regular cars in the US. Instead, they want to double-down on building polluting trucks and SUVs domestically.
The consequences of this shift are devastating. Jobs are already leaving at a rapid pace. In December, GM announced that it’s cutting 14,000 jobs in North America, shuttering five plants, and discontinuing six car models in favor of an SUV/pickup truck strategy. Ford had already announced that it was abandoning almost all of its car models in the US except for the Mustang. And Fiat Chrysler is set to build its last car in the US later this year.
Just think about that for a minute. A United States where almost no American cars are made here in the country itself.
This goes far beyond symbolism. By abandoning cars, the Big Three automakers are jeopardizing millions of current jobs and millions more potential jobs in the US.
Instead of focusing on the next generation of vehicles in the US, our automakers are looking to China. Ford, for instance, has launched a $750 million joint venture with China’s Anhui Zotye Automobile Company to build a new line of electric vehicles. General Motors is planning to offer more than 20 new electric car models in China by the end of this year.
The picture couldn’t be any clearer: American car companies are quickly abandoning the oil-friendly US to pursue a market putting all its bets on electrification. Unless we act quickly, the all-electric future will be pioneered, built, and designed for the Chinese auto market.
Trucks and SUVs
But what about trucks and SUVs? Surely, American jobs can be maintained by the Big Three focusing on them. Right?
Unfortunately, this is unlikely to be the case. It turns out that electric is the future for trucks and SUVs as well. Trucks and SUVs are already rapidly becoming electric, and a few electric vehicle SUV models are already in the market and selling well.
Tesla and a new startup called Rivian are exciting consumers with the prospect of new pickup truck offering. Both Tesla and Rivian are American startup companies creating an electric industry here at home – and they might very well eat the lunch of incumbent automakers.
But, these two companies are still relatively small manufacturers and can’t save the industry on their own. If we want to save the majority of American vehicle manufacturing jobs, we need to act swiftly on developing a robust electric vehicle market.
We Are Talking a Lot of Jobs
We have a vast auto sector in the United States. It takes a lot of people and a lot of suppliers to build a car. According to the Auto Alliance, the industry “supports a total of 7.25 million American jobs, or about 3.8 percent of private-sector employment.”
To put that in context, during the Great Recession of 2007-2010, the US lost 8.7 million jobs. So, 7.25 million jobs are heck of a lot of jobs.
But, if American companies are unwilling to build cars in the US and instead invest in China, we won’t just be missing out on future jobs in a new industry – as we have in other high-tech sectors – we’ll be losing millions of existing, high-paying American jobs.
In a time when the entire industry is switching from gasoline and diesel to electricity, we should be doing all we can to be the home of this transition. We should be working night and day to own the market, creating an entirely new industry along with the millions of high-paying jobs.
What About Solar?
But you might be thinking – haven’t we heard these kinds of predictions of economic calamity before? When China took over the solar industry, we were still able to create a robust solar industry here in the United States and it is growing. Now, nearly 250,000 Americans are working in the solar industry, and the sky didn’t fall.
Unlike the auto industry, solar was new. So when China took the helm, it didn’t crowd out any existing American jobs. But it did make a big difference in how many solar jobs we developed domestically. We might have 250,000 solar jobs, but China has over 60 percent of the world’s solar jobs — more than 2.2 million jobs.
If we’d done more to incentivize solar manufacturing and deployment, perhaps we too would have 2 million solar jobs instead of 250,000.
How Is China Attracting the EV Sector and EV Jobs?
China has signaled as part of its “Made in China 2025” action plan that the electric vehicle industry is one of 10 sectors it plans to dominate globally. Let that sink in.
China’s strategy is to mandate the manufacture of zero-emissions vehicles, as California has done, and subsidize the purchase of electric cars. At an average subsidy of $10,000 per vehicle, China’s central and local governments spent $7.7 billion on EV subsidies in 2017.
In addition to consumer subsidies, many cities, such as Beijing, restrict the number of vehicles that can be purchased in a given year to prevent pollution and traffic. Electric vehicles also have a cap, but in recognition of their lack of tailpipe pollution, it’s much easier to acquire a new electric vehicle.
Lastly, China is known for subsidizing state-owned enterprises and lavishing incentives on private corporations in target industries with tax breaks and even free land for factories.
Can the US Compete?
In a word: Yes.
To do it, we need to build out a robust set of incentives ourselves to build electric vehicles here, buy electric vehicles here, and scale up our charging infrastructure. This means five key steps:
1. Maintain Fuel Economy Standards
The first thing we should do is avoid shooting ourselves in the foot. The Trump Administration is attempting to roll back fuel economy standards. We need to keep these aggressive standards the auto industry agreed to when the US government, and taxpayers, bailed them out. In fact, we should strengthen those standards, and in the process, we’ll save ourselves billions in fuel costs, reduce pollution, and encourage the electric vehicle industry to be an American one.
2. Remove the Cap on EV Tax Credits
We should make it cheaper to own an electric vehicle, and seriously reform consumer incentives. We have a $7,500 per vehicle tax credit, but when it was created, it was capped at 60,000 vehicles per manufacturer. Both Tesla and GM have met that cap, so their tax incentives have started to wane, and within a year they will disappear. Why would we punish companies for doing well in the market and actually selling plug-in vehicles? We should undo the cap and allow all zero-emission vehicles to enjoy the tax credit.
3. Jumpstart Manufacturing
After the Great Recession, the Recovery Act of 2009 created programs to jumpstart electric vehicle manufacturing in the US and create new jobs. One initiative in the act, the 30 percent 48C Manufacturing Tax Credit, was used for many things. One of the most important was to retrofit factories to build clean energy vehicles. We should dust off this incentive for electric vehicles and allow abandoned factories all over the US – but especially in economically distressed communities – to be reclaimed and start building the cars of the future. We should also enhance loan and grant programs for zero-emission vehicle manufacturing and ensure they support high-paying union jobs.
4. Invest in Electric Vehicle and Battery Research
We must invest more in electric vehicle and battery research. Tesla, in partnership with Panasonic, is arguably the world leader in electric vehicle battery development and manufacturing. But all of the other major lithium-ion battery companies are outside the US. We should revitalize efforts to develop electric vehicle batteries in the US and leverage the presence of Tesla in this fast-growing industry.
5. Partner with the Private Sector on EV Infrastructure
Companies like EVgo, Chargepoint, Electrify America, and Tesla are building robust electric vehicle networks, but these networks are not being designed comprehensively. We need government funding to provide charging at apartment buildings and on the street, so electric vehicles are not just for people with driveways.
What About Tariffs?
The Trump Administration is attempting to address competition by erecting trade barriers.
Tariffs can be effective in the right circumstances, but they are a blunt tool that can often do as much harm as good. The best way to compete for the electric vehicle industry is not to view the market as zero-sum. Both China and the US can have vibrant, fast-growing zero-emission vehicle markets. Instead of tariffs, we should do what we did at the dawn of the auto industry: help our workers and companies compete.
We’re in a global competition for green jobs and green investment dollars. But we’re essentially sitting it out at the federal level by not aggressively pursuing a series of policies that would catapult us forward and save jobs. Meanwhile, China is taking the lead on yet another industry of tomorrow.
If we want to save jobs, create new ones, and Make America Green Again, we need to be serious about transportation and the auto sector. This will result in a cleaner, cheaper, more energy-secure, and more-just transportation sector we can all feel good about.
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