The Biden Administration's Push for Electric Cars: Will Americans Embrace the Change?

Sign up for free to receive a version of this story in CNN Business' Nightcap newsletter. The Biden administration is hoping that by building more electric vehicles, people will be more inclined to switch from gas-burning cars. However, they are also acknowledging a major issue with the EV revolution - Americans are not very interested in electric vehicles.

The EPA has recently introduced new strict rules for tailpipe emissions. These rules are designed to reduce the amount of carbon dioxide and other harmful pollutants emitted by cars and trucks, starting from the year 2027.

This development is a significant victory for President Biden, who has prioritized the transition to electric vehicles as a key component of his climate agenda. It is also a positive outcome for automakers, who have been advocating for additional time and flexibility to meet the targets for electric vehicle sales.

The administration's initial goal of having fully electric cars account for 60% of all new-vehicle sales by the end of this decade was successfully challenged by automakers. (Under the new rules, plug-in hybrids are now allowed to play a bigger role in the electric transition.)

The changes in regulations reflect the current reality of electric vehicles in America in 2024. After an initial wave of excitement, car manufacturers are significantly reducing their ambitions for electric vehicles.

EV sales are increasing every year, but they are not growing as quickly as expected. Last year, electric vehicles accounted for only 7.6% of new car sales, as reported by Kelley Blue Book.

So, what's the reason behind the slower-than-expected growth of the EV market?

Analysts point to a few key reasons, as my colleague Peter Valdes-Dapena wrote last month.

EVs cost more

EVs are still considered pricey in the American auto market, which has limited demand to those willing to pay more for electric vehicles.

However, even if car manufacturers offered both gas and electric options at the same price, consumers may still hesitate to choose electric because ...

The charging issue

Most electric vehicle charging takes place at home, typically in the garage. This poses a challenge as it reinforces the misconception that electric vehicles are only for wealthy individuals. For those without a garage, such as the millions residing in urban areas, the ability to consistently charge their electric vehicles is significantly limited.

According to the Department of Energy, there are currently less than 40,000 public charging stations, with about a quarter of them located in California. To meet the demand for electric vehicles expected in 2030, we will need to increase this number by five times.

To support this growth, automakers are working together to adopt the charging standard used by Tesla, the leading seller of EVs. This collaboration will help ensure that electric vehicles can be easily charged across different networks.

But there’s a long, long way to go before drivers can trust that no matter where they’re headed they’ll be able to plug in if needed.

Credit confusion

When you purchase an electric vehicle (EV), you may qualify for a tax credit! It's a common selling point, but can be confusing for many.

While it is true that there are significant tax credits that can help reduce the cost of an EV, it's not as straightforward as just claiming it on your tax return. In the mix of incentives available, some have specific requirements related to the vehicle's origin, cost, and the buyer's income level.

Driving an electric vehicle, such as a Tesla, may seem similar to driving a traditional gas-powered car in many ways. However, there are some important differences that can confuse new drivers. One common observation is that electric cars can feel a bit strange and tend to be quieter on the road.

Research by LexisNexis Risk Solutions shows that when people switch from gas-powered cars to EVs, they tend to have more accidents, as per insurance data analysis.

Unfortunately, EVs are not the solution to our problems.

Replacing all of our gas-powered cars with EVs is not only good politics but also good policy in the effort to reduce emissions. Biden can promote green technology while supporting an all-American, job-creating industry. It's a win-win situation.

However, it's important to note that this transition is not a cure-all solution.

Technology writer Paris Marx pointed out earlier this year that America's EV plan had flaws from the beginning. He suggested that for a more sustainable transportation system, the government and automakers should focus on incentivizing smaller vehicles, hybrid cars, and public transportation options such as trains and buses.

Editor's P/S:

The article presents a complex and nuanced take on the challenges and prospects of electric vehicle adoption in the United States. While the Biden administration's push for EVs is seen as a positive step in reducing carbon emissions, the article highlights the persistent obstacles that hinder widespread acceptance. These include the high cost of EVs, limited charging infrastructure, and confusion regarding tax credits.

Moreover, the article cautions against viewing EVs as the sole solution to transportation emissions. It emphasizes the need for a holistic approach that includes investments in hybrid vehicles, public transportation, and policies that encourage smaller, more energy-efficient cars. This broader perspective is crucial for creating a truly sustainable transportation system that meets the needs of a diverse population and promotes both environmental and economic goals. future of electric vehicles in America.