Can We Power the EPA’s EV Fantasy?
The overhaul of electrical grids and distribution would require labor
and resources we don’t have.
By Jonathan A. Lesser and Mark P. Mills - WSJ
The futurists at the Environmental Protection Agency are confident that electric vehicles will soon become cheap, reliable and easy to fuel. That’s the main bet in the agency’s new standard for carbon-dioxide emissions, released last week. Critics have rightly called the rule a backdoor EV mandate. The EPA admits it can be met only if EVs compose well above half of new vehicle sales by 2032.
That isn’t happening anytime soon. EVs are a niche product, used mostly by high-income urban consumers with garages. Electric cars accounted for shy of 8% of new auto sales last year and drained billions from automakers’ profits. It isn’t unreasonable for EV aficionados to hope for more business as technology progresses and, perhaps, as low-cost Chinese EVs flood the market. Whether the former happens quickly enough is one bet, and whether policymakers will be happy with Chinese car companies bankrupting American firms is another.
There is, however, another wild card in the EPA’s gamble. Widespread adoption of EVs will require an unprecedented and staggeringly expensive expansion of local electrical grids. This will require a huge increase in the production of electrical transformers, along with more power plants and transmission lines to produce and deliver energy.
This overhaul must include upgrading local grid distribution at the roughly 3,000 electric utilities across the country—the wires, poles and transformers that line our streets. There are 60 million to 80 million distribution transformers in neighborhoods, designed for existing loads. Around one million new ones are sold annually, two-thirds of which replace aged-out transformers. That replacement rate isn’t close to meeting the EPA’s dreams. Millions more—and heavier—transformers will be needed to handle higher power levels and more frequent use, even if many EVs are charged overnight. This will also require replacing many of the existing utility poles to handle new transformers’ extra weight.
On an individual level, millions of homes and apartment complexes will need electrical upgrades to accommodate at-home chargers. Consumers and taxpayers will pay for that multibillion-dollar price tag, whether through taxes or higher utility rates. Electricians will need to install new circuits for EV chargers, and many older homes will need new power panels to handle increased demand.
On-road fueling will still be needed, particularly for the millions of consumers without garages. Replicating the nation’s some 195,000 retail gasoline stations will require far more than the 4,000 charging facilities that the Federal Highway Administration has proposed. Given the physics of electricity, thousands of these charging stations will each have the power demand of an entire town rather than that of a typical convenience store. That will mean more massive upgrades, in this case for higher-voltage grid systems and, critically, thousands of new, large transmission-level transformers.
For EV enthusiasts, this overhaul is doable with the right amount of money. Yet they’re naive about the magnitude. One Energy Department study estimated some $50 billion to $125 billion in infrastructure upgrades will be needed to support EVs composing 10% of all on-road cars. Today they amount to less than 2%. We estimate that achieving the EPA’s goal will require north of $1 trillion in grid upgrades by 2035.
Money aside, transformers will be the big roadblock. Delivery of the largest utility transformers can already take several years, and overall transformer costs have risen 70% since 2018. Replacing tens of millions of distribution transformers would require massive quantities of copper, most of which would have to be imported. The process would also exceed the production capabilities of the handful of American manufacturers. The U.S. is heavily dependent on imports for large substation transformers, especially from Asia, itself raising obvious national-security issues.
The unique electrical steel needed for transformers and electric motors is also in short supply, served by only one major producer,
Cleveland Cliffs. New Energy Department rules to improve transformer efficiency will require switching to even more specialized and costlier amorphous steel. Add to that a shrinking labor force that can build and install this specialized hardware. The EPA’s architects apparently believe there’s a magic wand to fix all this.
EV advocates at the EPA suggest that these mandates will induce market forces that will solve the attendant challenges. That’s a novel—and dubious—theory of innovation. Some behavioral changes might help, such as rationing access to EV charging or reducing the number of cars. Perhaps that’s the real goal. Whatever the motivation, the EPA’s de facto EV mandate is another green fantasy.
Biden’s Order: Let There Be Electric Trucks
EPA’s latest EV mandate is the most costly and fanciful to date.
The Environmental Protection Agency chose Good Friday (’24) to roll out its burdensome electric truck mandate, no doubt so fewer people notice. Biden officials well know the damage they are doing, but the damage in the name of climate change is the point.
EPA’s new emissions standards for heavy-duty trucks will effectively require that electric semi-trucks make up an increasing share of manufacturer sales from 2027 through 2032, similar to its recent rule for passenger cars. The difference is that the truck mandate is even more costly and fanciful.
EVs make up less than 1% of U.S. heavy-duty truck sales, and nearly all are in California, which heavily subsidizes and mandates their purchase. EPA’s rule will require electric models to account for 60% of new urban delivery trucks and 25% of long-haul tractor sales by 2032. The harm is predictable in return for no climate benefit.
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Start with the fact that no electric long-haul tractors are currently in mass production. Most electric trucks can’t go more than 170 miles on a charge. Electric semis require bigger and heavier batteries, which means they must carry lighter loads to avoid damaging roads. Fleet operators will have to use more trucks to transport the same amount of goods.
This will increase vehicle congestion, especially around ports and distribution centers. EPA says its rule will reduce pollution in “environmental justice” communities near major truck freight routes. But more traffic will result in more pollution. Electric trucks also generate more soot from their wear and tear on roads and vehicle braking.
Power generation and transmission will have to massively expand to support millions of new “zero-emission” trucks. An electric semi consumes about seven times as much electricity on a single charge as a typical home does in a day. Truck charging depots can draw as much power from the grid as small cities.
By 2030 electric trucks are projected to consume about 11% of California’s electricity. The additional power to fuel electric trucks won’t come from renewables, which can’t be built fast enough to meet demand. Most trucks will recharge at night when solar isn’t available since drivers don’t want to waste prime daylight driving hours.
Some 1.4 million chargers will have to be installed by 2032 to achieve the EPA’s mandate, about 15,000 a month. This will require major grid upgrades when there are shortages of critical components such as transformers. It could take three to eight years to develop transmission and substations in many places to support truck chargers.
Truckers estimate the EPA rule will cost utilities $370 billion to upgrade their networks. On top of that, truckers will have to invest $620 billion in their own charging infrastructure. This doesn’t include the cost of electric trucks, which are typically two to three times more expensive than diesel cabs.
Replacing diesel trucks with electric will cost the industry tens of billion dollars each year. Truckers will pass on these costs to customers—meaning U.S. manufacturers and retailers—which will ultimately pass them on to Americans in higher prices. This is President Biden’s trickle-down economics.
EPA says its big-rig quotas are feasible because the Inflation Reduction Act and 2021 infrastructure law include hundreds of billions of dollars in subsidies for EVs. This includes a 30% tax credit for charging stations, $40,000 tax credit for commercial EVs, and a tax credit for battery manufacturing that can offset more than a third of the cost.
IRA tax credits for electric trucks aren’t conditioned on the source of battery material, so expect most to come from China. By the way, China’s BYD was California’s top-selling electric truck maker in 2022. Biden officials say Chinese green-technology manufacturers are flooding the U.S. market, but their mandates and subsidies are the reason.
Cue U.S. truck manufacturers, which are pleading for more handouts. “The EPA’s new heavy-duty emissions rule is challenging,” Ford said on Friday, noting they will require more “incentives and public investment.” So the Administration uses subsidies to justify a burdensome mandate, which then causes companies to lobby for more subsidies. What a racket.
Here’s another one: EPA projects its rule will “avoid” one billion metric tons in CO2 emissions from 2027 through 2055—about as much as emissions from China and India rose last year alone. The truck mandate will do nothing to reduce global temperatures.
EPA’s press release highlighted laudatory statements from leftwing groups including the Hip Hop Caucus, which claims to use “cultural expression to dismantle oppressive systems.” So the Administration is oppressing American businesses and consumers with a destructive regulation to curry favor with Hip Hoppers. Such are this Administration’s priorities.