Not everything California does gets copied by other states, unless it has to do with Hollywood or automobile emissions.
The federal Clean Air Act lets states adopt California’s environmental standards instead of Washington’s, if they choose. So far, 16 have done so, including Utah’s neighbors Nevada and Colorado.
So, if California carries out a decision made recently by some of its bureaucrats to ban the sales of any new gas-powered vehicles within the state by 2035, other states are likely to follow. That, in turn, would put pressure on manufacturers to switch to mostly electric cars.
And that, in turn, would (unless something drastically changes in 13 years) solidify China’s hold on the auto industry, which is not a good thing.
The federal Clean Air Act lets states adopt California’s environmental standards instead of Washington’s, if they choose. So far, 16 have done so, including Utah’s neighbors Nevada and Colorado.
So, if California carries out a decision made recently by some of its bureaucrats to ban the sales of any new gas-powered vehicles within the state by 2035, other states are likely to follow. That, in turn, would put pressure on manufacturers to switch to mostly electric cars.
And that, in turn, would (unless something drastically changes in 13 years) solidify China’s hold on the auto industry, which is not a good thing.
As the New York Times reported last December, there already are concerns in Washington that “Beijing could control American driving in the 21st century the way that oil-producing nations sometimes could in the 20th.”
We would cruise into the 21st century beholden to the energy whims of China, after decades of being beholden to the whims of OPEC.
Why? Because Chinese companies, and particularly one called CATL, control most of the raw materials that are used to produce the batteries that power electric cars.
While attending a China Summit at Utah Valley University in June, former Utah governor and ambassador to China Jon Huntsman Jr. identified the long-term Chinese strategy as “forcing the world to come to (them) with some supplicants and building up (their) own indigenous capacity, such that (they) don’t have to rely on any of the outside world to get things done.”
He and others at the summit urged new ways of thinking in order to counter that challenge.
At the moment, the threat may seem weak. China’s economy is on the ropes, the victim of manufacturing layoffs, a heat wave that threatens the electric grid, persistent Covid-19 shutdowns and a deep downturn in real estate markets. But the long-term strategy is playing out well when it comes to batteries for electric vehicles.
As the Times reported, Chinese companies have managed to control large deposits of cobalt in the Democratic Republic of Congo, which once were mined by Americans. CATL just bought a quarter of one of the world’s richest cobalt reserves for $137.5 million.
Going back more than a decade, China began requiring foreign companies to use Chinese components if they wanted to sell electric vehicles and take advantage of government subsidies in China. BMW was CATL’s first main customer, abandoning a U.S. battery maker.
CATL isn’t owned by the Chinese government, but it succeeded with help from highly connected investors, the Times said.
California’s pending ban on gasoline vehicles is ill-advised for a number of reasons. Whenever governments impose themselves on the economy, they create unintended consequences that might be avoided if the free market were allowed to run its course.
The first of these is the price of electric vehicles which, according to Newsweek, is $66,000 on average, despite government subsidies and incentives. This, the magazine said, would keep average working people from being able to afford new, or even many used, cars.
Of course, forcing manufacturers to produce more electric vehicles may also force prices lower as competition intensifies, but that won’t happen if it serves only to clog supply chains that already are messy.
Other observers point to the lack of charging stations. This, too, might require some government subsidies to kick start.
NPR recently pointed to another problem. “Companies will need engineers with a different set of skills…” Instead of designing transmissions, they will need to design electric motors. That likely means layoffs and difficult searches for the right people in a tight labor market.
And then there are the demands electric vehicles present to the nation’s electrical grid. That’s especially a concern in California, where a recent heat wave led to blackouts.
Even the Washington Post called California’s move “clunky.”
Perhaps all of this is worth it to transition to a cleaner energy source. Perhaps there is no easy way to move from one system that is more than 100 years old to a better one.
But the China problem goes beyond concerns about the free market, governments trying to move the needle of progress by hand or following whatever California does. It will, as Huntsman and others at Utah’s recent China Summit said, require the nation’s best thinking and strategizing. It will require winning back lost ground and ensuring this nation doesn’t become another supplicant forced to ignore bad things because it needs batteries.
We would cruise into the 21st century beholden to the energy whims of China, after decades of being beholden to the whims of OPEC.
Why? Because Chinese companies, and particularly one called CATL, control most of the raw materials that are used to produce the batteries that power electric cars.
While attending a China Summit at Utah Valley University in June, former Utah governor and ambassador to China Jon Huntsman Jr. identified the long-term Chinese strategy as “forcing the world to come to (them) with some supplicants and building up (their) own indigenous capacity, such that (they) don’t have to rely on any of the outside world to get things done.”
He and others at the summit urged new ways of thinking in order to counter that challenge.
At the moment, the threat may seem weak. China’s economy is on the ropes, the victim of manufacturing layoffs, a heat wave that threatens the electric grid, persistent Covid-19 shutdowns and a deep downturn in real estate markets. But the long-term strategy is playing out well when it comes to batteries for electric vehicles.
As the Times reported, Chinese companies have managed to control large deposits of cobalt in the Democratic Republic of Congo, which once were mined by Americans. CATL just bought a quarter of one of the world’s richest cobalt reserves for $137.5 million.
Going back more than a decade, China began requiring foreign companies to use Chinese components if they wanted to sell electric vehicles and take advantage of government subsidies in China. BMW was CATL’s first main customer, abandoning a U.S. battery maker.
CATL isn’t owned by the Chinese government, but it succeeded with help from highly connected investors, the Times said.
California’s pending ban on gasoline vehicles is ill-advised for a number of reasons. Whenever governments impose themselves on the economy, they create unintended consequences that might be avoided if the free market were allowed to run its course.
The first of these is the price of electric vehicles which, according to Newsweek, is $66,000 on average, despite government subsidies and incentives. This, the magazine said, would keep average working people from being able to afford new, or even many used, cars.
Of course, forcing manufacturers to produce more electric vehicles may also force prices lower as competition intensifies, but that won’t happen if it serves only to clog supply chains that already are messy.
Other observers point to the lack of charging stations. This, too, might require some government subsidies to kick start.
NPR recently pointed to another problem. “Companies will need engineers with a different set of skills…” Instead of designing transmissions, they will need to design electric motors. That likely means layoffs and difficult searches for the right people in a tight labor market.
And then there are the demands electric vehicles present to the nation’s electrical grid. That’s especially a concern in California, where a recent heat wave led to blackouts.
Even the Washington Post called California’s move “clunky.”
Perhaps all of this is worth it to transition to a cleaner energy source. Perhaps there is no easy way to move from one system that is more than 100 years old to a better one.
But the China problem goes beyond concerns about the free market, governments trying to move the needle of progress by hand or following whatever California does. It will, as Huntsman and others at Utah’s recent China Summit said, require the nation’s best thinking and strategizing. It will require winning back lost ground and ensuring this nation doesn’t become another supplicant forced to ignore bad things because it needs batteries.
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