ELECTRIC ELECTION — The future of electric cars could look a lot different one year from now. Sales are still growing in the U.S. and abroad, but headwinds are building. And auto executives are sweating upcoming elections in the United States and Europe, which could impact EV-friendly policies that have been put in place to juice sales. Stellantis CEO Carlos Tavares raised eyebrows last week when he told reporters he was prepared to adjust his company’s electric vehicle strategy if the political tides turn against EVs ahead of key ballots in 2024 on both sides of the Atlantic. “There are two important elections next year — the European Parliament elections in June and the U.S. elections in November. It could be that politics will be different then,” Tavares told Automotive News affiliate Automobilwoche on the sidelines of a press conference at the Mirafiori plant in Turin. Stellantis — the parent company of Chrysler — may have to change its strategy “if political and public opinion tends toward fewer EVs,” he said. President Joe Biden’s reelection is among the most important variables. He has made the transition to electric vehicles a personal crusade, directing billions in two of his most significant legislative achievements to build EV chargers and help subsidize the cost of new electric vehicles — policies that could face resistance if a Republican wins the White House in 2024. In Europe, parliamentary contests across multiple countries stand to shape the debate. A ban on the sale of all but zero-emission cars and vans is already in place from 2035 onwards, with regulatory pressure also piled on automakers to start selling increasing numbers of EVs now as the phase out date approaches. But even with the law already on the books covering hulking carmaking states such as Germany, France and Italy, a different political constellation in Brussels could review the rules in the next political term. Closer to home, it would be hard for Republicans to fully unwind the popular Inflation Reduction Act, Biden’s signature climate law, with its $7.5 billion tax incentives for buying an EV. But that tax credit is already hobbled by the law’s strict rules aimed at wresting the EV supply chain away from China. Rules that took effect in March narrowed the field of eligible vehicles down to just 1 in 5, and another tranche of rules that just came out will narrow it further. The Biden administration did what it could to interpret those rules as liberally as possible in order to keep as many EVs eligible as possible for the tax credit — which brings prices closer to those of a traditional gas-powered vehicle. (Note that new vehicles are painfully expensive across the board, with the average new car setting a consumer back more than $48,000.) A Republican administration could further tighten the interpretation of the law, if not the law itself. The federal grants for EV chargers are just beginning to trickle out. Ever cognizant of the whims of Congress and the fragility of the appropriations process, lawmakers had the good sense in 2021 to pay a hefty down payment on the infrastructure law in the form of advanced appropriations. But the nascency of the process of building out the nation’s charging network still makes it vulnerable. Over in Europe, automakers also say the process of getting charging infrastructure installed across the bloc’s roads is patchy at best — with huge discrepancies between rich and poor countries. For example, while the Netherlands has 64 chargers per 100 kilometers of road, some six countries have fewer than a single charger over the same distance and 17 have fewer than five. This mismatch between pressure to sell clean cars to meet climate targets and the perceived lack of adequate supporting infrastructure raises the prospect of a serious review of the EU’s 2035 rule when it comes up for review in 2026, after next year’s election cycle. Though that possibility is rejected by politicians today, it’s made all the more likely by a steep decline in the political fortunes of Europe’s Greens, especially in countries such as Germany where the party governs in a three-way coalition. Of course, just as the elections could impact EVs, the politics of EVs could impact the elections. Biden’s use of taxpayer dollars to subsidize expensive cars for the upper-middle classes in service to a “green revolution” conservatives love to mock is a useful GOP talking point — especially in an increasingly populist Republican Party. Then again, EV battery plants creating jobs all over the Sun Belt is bringing even doubters into the EV fray. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s authors at tsnyder@politico.com and jposaner@politico.eu or on X (formerly known as Twitter) at @TSnyderDC and @joshposaner.
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