Not only is President Biden changing regulations to force Americans to buy electric vehicles by establishing new, rigorous standards for tailpipe emissions for model years 2027 through 2032 that gasoline-powered vehicles cannot meet, he is also forcing an 80,000 mile, eight-year warranty for electric vehicles on automakers. The auto standards, expected to be the toughest in U.S. history, are designed to cap emissions allowed per mile, encouraging the sale of electric vehicles that do not produce tailpipe emissions. (The Biden administration, however, is currently ignoring the fact that about 60 percent of the electricity these vehicles use today to charge their batteries is generated using fossil fuels and that the administration’s politically approved wind and solar power technologies are unreliable.) The new requirements, in combination with electric vehicle and charging incentives in new federal laws, are set so that two-thirds of new cars and light trucks sold in the United States need to be electric by 2032–a dramatic increase from the single-digit market share represented by new sales of battery electric and plug-in hybrid electric vehicles in 2022. This is nothing less than a backdoor approach to banning internal combustion engines in the United States using the EPA to regulate them out of existence.
The new standards will become more stringent over time, tracking the trajectory established by existing standards for model years 2025 and 2026 where fleet-wide limits tighten 10 percent between those years. The new requirements are essentially a defacto electric vehicle mandate that will be a challenge for automakers. Car manufacturers have warned the Biden administration that EV sales and emission reductions depend partially on factors outside their control, including investments in charging infrastructure, which currently are not sufficient for the massive change that would be required in charging the number of vehicles required to reach the goals set by the Biden administration. If tens of millions of people are driving electric vehicles, an exponential increase in the number of public charging stations will be needed, especially of the DC-powered fast-charging stations. Those stations will need electricity, which is becoming much more expensive and increasingly stressed by the addition of intermittent wind turbines and solar panels that are being regulated and subsidized into the nation’s grid.
The Inflation Reduction Act (IRA), approved by a party-line vote in the Democrat-controlled Congress last year and the Biden administration, provides up to $7,500 in tax incentives for buyers of electric vehicles with restrictions on where components and vehicles are produced. The act also provides billions of dollars to support battery production in the United States. But the industry and its customers have a long way to go. While sales of electric vehicles are increasing, they accounted for only 5.8 percent of the 13.8 million new cars and trucks sold in the United States last year.
Current Electric Vehicle Warranties
An EV’s warranty coverage is broken down into two major components, comprehensive and powertrain coverage. Comprehensive (“full”) coverage applies to parts and labor costs for covered repairs. Powertrain coverage is usually in effect for a longer period and applies specifically to major mechanical components like the electric motor and transmission. Not typically covered is scheduled maintenance service, wear-and-tear items like brake linings and windshield wiper blades, and failure caused by improper maintenance. Federal regulations mandate that an EV’s battery pack, its most expensive component, be covered for at least eight years or 100,000 miles. Automakers’ warranties also include specific coverage against corrosion, which applies to body panels that have been completely “rusted through,” but not to paint bubbling.
Every new-vehicle warranty, however, contains exceptions and exclusions. Some automakers, however, only cover an EV’s battery pack against total failure, while others, including BMW, Chevrolet, Nissan, Tesla (Model 3) and Volkswagen will replace it if it reaches a specified reduced capacity percentage, usually 60-70 percent, while under warranty. Some brands will transfer whatever remains of the original warranty to a second owner, while others may impose limitations. Also, select components (e.g. tires and dealer-installed accessories) can have separate warranties backed by the original-equipment manufacturers and come with their own exclusions.
Recently, Tesla launched new extended service warranties for its electric vehicles that can be purchased straight from its mobile app. Tesla’s powertrain warranty is for eight years or 120,000 to 150,000 miles, depending on the model. Its basic vehicle warranty is for four years or 50,000 miles, whichever comes first. Its new warranty offering is an extended warranty that it is selling directly through its mobile app for a period of two years or 25,000 miles, whichever occurs first. It begins after the Basic Vehicle Limited Warranty expires and its cost depends on the Tesla model.
Issues with EV Adoption
A major hurdle in EV adoption is whether Americans are willing to accept changes to their work and lifestyle to drive costly electric vehicles that have poor range and towing capability, long charging times, and few charging facilities. Even with the tax credits in the Inflation Reduction Act, electric vehicles are substantially more expensive than conventional vehicles. And now that Biden has chosen to force-feed them onto the American public through CAFE, an artificially inflated demand is likely to drive demand for minerals which will increase in cost. Rising demand and costs for minerals will affect prices for buyers.
Another hurdle is finding a sufficient supply of processed lithium–a soft, silver-white metal that is the key to EV battery production. The world produces only a small fraction of the amount that will be needed for a majority of car buyers to go electric in the United States, Europe and China–markets where more than 50 million cars were sold last year. The pace at which mining companies can expand lithium production in the United States is dire without needed permitting and other reforms. In North Carolina, for example, Albemarle is trying to reopen a pit mine along Interstate 85 near Kings Mountain, 32 miles west of Charlotte. But to reopen the mine, which was in operation from the 1940s to the 1980s, the company must work out plans for protecting surrounding groundwater, determining if the mine’s walls are suitable for new operations and dealing with contaminants that may be found in the pit lake at the mine’s bottom. Residents in the area are working to block the resumption of mining operations, as they have in opening lithium mines in Nevada. Dealing with these issues and lawsuits can take decades.
The supply and production of other metals — including nickel, rare-earth metals, manganese and cobalt — must also increase to support a tenfold increase in EV sales. Further, no matter where these minerals are mined, most of the ores must be sent to China for processing, making Americans dependent on an authoritarian government for not only vehicle components, but also for the politically correct electric generators—wind turbines and solar panels that need minerals for which China dominates the supply.
Also, the plants and assembly lines needed to produce millions of electric vehicles every year do not yet exist. G.M., Ford and other manufacturers have plants under construction, but two or three times as many battery plants are needed to reach their sales targets and those of the Biden administration. Building and ramping up dozens of new plants will take years. It took G.M. about three years to complete its battery plant near Lordstown, Ohio, and the start of production has been slow. In the first three months of this year, G.M. sold fewer than 1,000 electric vehicles with battery packs from the Ohio factory. Ford, which started making its electric F-150 Lightning pickup a year ago, produced just over 2,000 of them a month in the first quarter of this year. The company’s goal is to be able to produce 600,000 electric vehicles a year by the start of 2024, and to make two million a year by the start of 2027.
As with other elements of Biden’s climate plan, the feasibility of reaching 67 percent of new car sales as electric in 2032 is a major stretch that either will result in Americans using an inferior product or having automakers pay fines for not meeting the requirements of the regulation. The Biden administration seems to believe that through regulations, it can force its net zero climate agenda on the American public and the manufacturing industry. Further, it is trying to do everything at once, rather than through stages in order to reach its dream of a net zero economy by mid-century. The cost and feasibility seems to not matter to the Biden politicians. The American public will be the ones to pay.