Imagine that there was a quality electric car available for under $20,000. An electric car with a range of 300 miles. Imagine if there was an electric car available for under $15,000. This car wasn’t as nice, but could still go 200 miles on one charge. Wouldn’t that be great? Vehicles are far from the only important source of air pollution, but transitioning from gas to electric is a necessary part of the green transition.
Sure, in parts of the country switching to an electric car isn’t all that useful. If you live in coal-loving states like Utah or Kentucky, you’re better off driving a hybrid than an electric vehicle. It’s important to remember that electric cars use energy and that energy source determines the emissions. So driving a Tesla around Louisville means you’re really driving a coal-powered vehicle. The creation of electric car batteries also has some negative environmental side effects. But for most Americans, driving an electric car is going to be better for the environment than driving a car that runs on oil.
Getting people to switch is not going to be easy. Many people, myself included, have range anxiety. I routinely drive over 200 miles in a day and don’t want to have to worry about finding a place to charge my car and wait 20+ minutes. Then there’s just people’s natural resistance to change. Ultimately, most will only switch from gas to electric if it’s in their economic interest to do so. Saving the polar bears is great, but when the rubber hits the road (pun intended), it’s going to come down to basic economics. If electric cars are better and cheaper, then people will buy them. Period.
So wouldn’t it be wonderful if there was a cheap, decent quality, electric car that people could buy? It turns out there is. The largest electric car company in the world, BYD, makes several cheap electric cars. Millions have been sold and are being driven billions of miles. The catch? They are made in China.
This presents a problem for the Biden administration. The American left has made climate change a keystone of their platform. So much so that even the term is up for grabs - global warming begat climate change begat climate crisis begat climate emergency. I’m waiting for the inevitable climate catastrophe. Billions of dollars have been devoted to funding the transition from fossil fuels to renewable energy, and trillions are going to need to be spent to keep temperatures from rising even more than they already have. So a cheap electric car seems like a nice solution to get us a non-trivial percentage of the way there.
Unfortunately, just about the only thing Republicans and Democrats agree on is that China is a threat and needs to be contained. American politicians seem to be almost having a competition at times about who can be “tougher on China”. Exactly what that means isn’t always clear, but it does imply that anything good for China is bad for the United States.
Glibness aside, both climate change and China are legitimate concerns. It is starting to get uncomfortably hot around here, and while some of the rhetoric around climate change is just plain hysterical, it is a problem that needs to be addressed. Same with China. The world is not a zero-sum game - China doing well does not mean the US suffers. That said, it would behoove the United States to not be dependent on a nation that does not have the best interests of its own people, let alone the rest of the world, at heart.
So that gets to the big question. When it comes to picking between the energy transition and being tough on China, which is more important? We have to choose. Either we devote our resources to moving away from fossil fuels and welcome Chinese cars with open arms, or we stay on tough on China and deal with more emissions. So far, the Biden administration has implicitly chosen to be tough on China. Trump administration tariffs on Chinese vehicles, which are around 25 percent, are still in force. Some Senators are advocating for the tariff to be raised to over 100 percent, which would effectively lock BYD out of the US market.
From an economic perspective, the best solution is to allow electric cars to be sold in the United States, no matter where they are made. If climate change is half as large a threat as many claim, then it’s important to use all available tools. Will US automakers suffer from increased competition? Yes, but as long as they provide vehicles that Americans want to buy they won’t be in any danger. Just look at Tesla, which now has a market cap far higher than every other American automaker combined.
Regardless of what decision the American government makes, my greatest fear is that, as per usual, the tradeoff won’t even be acknowledged. There is both merit in transitioning away from fossil fuels and preventing China from dominating an important industry. That being the case, it is doubly important that when these two goals conflict, the government lays out the stakes to the American people and explains which goal they are prioritizing and why.