This article originally appeared in the National Review. Below is an excerpt from the article.
By Jerome Gessaroli, June 17, 2024
North America’s integrated auto sector is in the midst of a significant transformation driven by the United States’ and Canada’s ambitious climate goals. Their decision to go all in on electric vehicles (EVs) risks triggering one of the most significant economic-policy blunders since the Great Depression.
The U.S. and Canadian governments have collectively committed over $200 billion in subsidies toward EV-battery production, vehicle assembly, and related facilities. The required new power generation and grid-infrastructure upgrades for the U.S. could add another $53 to $127 billion to the total costs of transition to EVs by 2030. Governments will likely need to foot some of that bill, too.
While this unprecedented investment demonstrates a commitment to reducing greenhouse-gas (GHG) emissions, it also represents a grave strategic miscalculation. By prioritizing EVs over other technologies, the governments have put climate goals at odds with domestic auto sector and national-security concerns about Chinese EV imports. This heavy-handed intervention in the auto sector undermines the industry’s competitive advantages and stifles innovation in other technologies.
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