Ignorance is bliss, so if electric vehicles are the future, most Americans are fortunately unaware that the Biden Administration has possibly put the U.S. on a path to be forever subject to China’s whims and dictates with regards to automotive manufacturing. Oh yes, GM CEO Mary Barra and Ford CEO Jim Farley talk up a storm about one day figuring out how to build EVs without racking up losses, but it’s mostly their fawning journalist admirers who believe them. Wall Street has tired of Barra’s and Farley’s EV shuck and jive.
Don’t take my word for it. The Detroit News published this Bloomberg story today about how Wall Street is skeptical of Farley’s claim that Ford in a matter of years will transform its pipsqueak money-losing electric vehicle unit into a formidable business churning out 2 million models a year with an 8% profit margin.
“That skepticism is a byproduct of what’s happened in the past few years of continued mediocre results,” David Whiston, an analyst with Morningstar, told Bloomberg’s Keith Naughton. “People are saying: ‘It’s great you’re saying 8%, but until you do it, I just can’t believe you.'”
As for Wall Street’s assessment of Barra’s claim that GM within two years will be selling more EVs than Elon Musk’s Tesla, the stock closed today under $33. It was trading at near $40 when Barra assumed command more than nine years ago.
China is the undisputed world leader making and buying EVs. In the past two years, the number of EVs sold annually in the communist country soared to 6.8 million from 1.3 million, making 2022 the eighth consecutive year in which China was the world’s largest market for EVs. By comparison, roughly 800,000 EVs were sold in the US in 2022, most of them luxury vehicles that only the wealthy could afford.
China also controls about three-quarters of the market for the raw materials that go into EV batteries, like lithium, cobalt, and nickel. The country is so far advanced that Ford said it was required to partner with a leading China-based battery manufacturer for its planned Michigan plant to “help us get up to speed so we can build the batteries ourselves.”
What would alarm Americans if they knew is why China might forever dominate EVs. Back in the 90s the country’s communist government realized China’s domestic auto manufacturers could never compete on a global scale with the quality gas-engine manufacturers, but they saw an opportunity to dominate the EV market. China’s EV execution was nearly flawless.
As reported by the MIT Technology Review, the EV strategy was created in 2001 as a priority science research project in China’s Five-Year Plan, the country’s highest-level economic blueprint. In 2007, Wan Gang, an auto engineer who had worked for Audi in Germany for a decade, became China’s minister of science and technology. Wan had been a big fan of EVs and tested Tesla’s first EV model, the Roadster, in 2008 when it was released. Wan is credited with China making EVs a critical component of the country’s national economic planning.
Most businesses today benchmark themselves against industry rivals and other relevant corporations to ensure they are adhering to best practices. It would seem logical then for the U.S. government to benchmark against China, which is mercilessly kicking America’s butt on the EV front. China’s government has a demonstrated two-decade successful EV track record.
China’s government understands that EVs require electricity and therefore the country requires a reliable grid capable of producing reliable sources of electricity. That’s why China permitted more coal power plants last year than any time in the last seven years, according to a recent report by the Center for Research on Energy and Clean Air.
“Everybody else is moving away from coal and China seems to be stepping on the gas,” Flora Champenois, coal research analyst at Global Energy Monitor and one of the co-authors of the report, told NPR. “We saw that China has six times as much (coal) plants starting construction as the rest of the world combined.”
China also leads the world in constructing new solar and wind power facilities, and claims the coal plants will be used as backup support for renewables and during periods of intense electricity demand, like heat waves.
Biden Administration officials and some state political leaders think they know better than their counterparts in China.
The EPA, whose chief Michael Regan I’ve previously criticized for being out of his depth, earlier this month introduced aggressive standards requiring all coal-fired power plants to use a new and still-unproven technology called carbon capture and storage, or CCS, to reduce greenhouse-gas emissions 90% by 2035, or begin co-firing with natural gas. In addition, natural-gas-fired plants must capture 90% of emissions by 2035 using CCS or switch almost entirely to hydrogen by 2038. The only other option for both: shut down.
“These nascent technologies simply won’t get the job done in the next few years,” William Scherman, a Washington-based energy lawyer who previously served as general counsel for the Federal Energy Regulatory Commission, argued in a commentary published by the Wall Street Journal. “CCS is used at only one commercial power plant in North America. The only U.S. coal plant to implement CCS successfully closed in 2020 for economic reasons.”
According to Scherman, a week before the EPA proposed its rules, all four FERC commissioners, both Democrats and Republicans, told the Senate Energy and Natural Resources Committee that it wasn’t possible in the immediate future to maintain a reliable grid without the coal and gas plants targeted by the new rules
“If Republicans and Democrats agree the policy is unworkable, you know we’re in trouble,” Scherman said.
In Michigan, state Senator Erika Geiss in April introduced a bill that would require Michigan energy companies to “achieve a renewable energy portfolio” of 100% by 2035. According to the Mackinac Center for Public Policy, that’s up from just 12.5% in 2020.
To reach the 100% target, in 2035 and after, energy companies must use “approved” nuclear energy toward their renewable tally. “A renewable energy plan starting in 2035 credits approved nuclear energy toward the clean energy requirement or renewable portfolio plan,” the bill reads.
Before 2035, however, nuclear doesn’t qualify as “renewable.” A year ago this month, Michigan’s Palisades Nuclear Generating Station was shut down, taking with it 6.5% of the state’s electricity and 15% of the state’s clean energy.
One wonders the thought and expertise that went into the drafting of Geiss’ bill. She is a career politician with a degree in developmental psychology from Brandeis University and a master’s degree in art and architectural history from Tufts University.
In Texas, Public Utility Commission Chair Peter Lake warned earlier this month that the Lone Star State’s main power grid is at risk for outages this summer if wind turbines can’t produce enough electricity when it’s needed. Lake said Texas needs more on-demand power sources, such as natural-gas-fueled power plants or batteries, to make its grid more reliable.
In California, which accounts for about 40 percent of all U.S. EV sales, one must be a pie-eyed optimist to believe that California’s grid can handle a 15-fold increase in EVs by 2035.
“We’re going to have to expand the grid at a radically much faster rate,” David Victor, a professor and co-director of the Deep Decarbonization Initiative at UC San Diego, told CalMatters. “This is plausible if the right policies are in place, but it’s not guaranteed. It’s best-case.”
“Right policies” in California? Professor Victor is obviously a glass-is-very-full kind of person. Here’s my take on PG&E, the convicted corporate felon that manages Northern California’s Third World grid and a major campaign contributor to Gov. Gavin Newsom.
Americans have grown accustomed to a world where after flipping a light switch the lights come on. Those seeking that sort of reliability in the future might soon develop an appreciation for China’s Communist Party leadership.
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Last month, I published this commentary about the Washington Post being on the vanguard of what I call Winston journalism, a reference to Orwell’s 1984 character whose job at Oceania’s Ministry of Truth was to turn truth into lies and lies into truth. I cited Glenn Kessler, the publication’s “fact checker,” and Phil Bump, who I’ve previously profiled, as Winston journalists extraordinaire.
True to form, Kessler has assured Post readers that the more than 300-page report issued this week by special counsel John Durham was akin to the popular Seinfeld series, a show about nothing. Bump went so far as to say Durham’s report provided some vindication for Hillary Clinton.
The New York Times, another publication I cited as being on the forefront of Winston journalism, also weighed in with its predictable narrative.
I stand behind my commentary about what the Durham report proved about Clinton. I’m delighted that Eli Lake, a columnist at the New York Sun, also views the Durham report as damning of Clinton. Bob Woodward, on whose reputation the Post still coasts, also is on record as saying the media, including the Post, “cheated” readers and viewers with their discredited Trump/Russia collusion coverage, for which the Times and the Post were awarded a Pulitzer Prize.
It was disheartening, but not surprising, reading the corporate media’s whitewashing for the Durham report. But this meme someone posted on LinkedIn provided much comfort.
