Transportation Secretary Pete Buttigieg recently revealed he is one of the administration’s top graduates in the field of Bidenomics. The former presidential candidate is ostensibly running a marketing campaign for the electric vehicle industry, selling Americans the dream of eternal fuel savings if they merely purchased a Tesla Model X, Hyundai Kona Electric, or Nissan Leaf. In his temporary stint as a public relations manager for the EV sector, he also took the opportunity to peddle some economic fallacies relating to electric automobiles and fossil fuels. Perhaps Buttigieg is a little behind on his studying of economics and finance – or the green economy for that matter.
Gasoline Savings Are Closer Than They Appear?
Speaking in an interview with MSNBC’s Jonathan Capehart, Buttigieg claimed that families who acquire an electric vehicle would “never have to worry about gas prices again,” purporting that they would receive a “$12,500 discount” in transportation costs. He contended that the Democrats’ proposed social spending initiative includes a myriad of incentives to make it more affordable to get their hands on an electric automobile. He told the left-leaning cable news network:
“The people who stand to benefit most from owning an EV are often rural residents who have the most distances to drive, who burn the most gas, and underserved urban residents in areas where there are higher gas prices and lower income.
“They would gain the most by having that vehicle. These are the very residents who have not always been connected to electric vehicles that are viewed as kind of a luxury item.”
Buttigieg, who is already being rumored as a potential presidential candidate for the Democratic Party in 2024, added that if the United States can manufacture cheaper and American-made EVs, the country would sell more, effectively bringing down the price. Like his White House aspirations in 2020, Buttigieg was so close yet so far away from making a complete economics argument.
Breaking Down the Cost of EVs
In April 2021, the average sticker price for an electric vehicle was $51,532. This year, the average cost for a regular car is $42,258, and the figure goes down depending on the type of vehicle a motorist purchases. For example, the average price of a new compact vehicle was a little more than $25,000.
On the maintenance and repair side of the equation, research has found that EVs are slightly cheaper to take care of but will cost a lot more to repair than gasoline-consuming automobiles. Analytical firm We Predict states that it can cost more to own an EV than a gas-powered vehicle. But AAA estimates that possessing a new compact EV will hit your wallet by $600 more per year than a conventional gas-fueled compact automobile.
When it comes to energy costs, this is tricky. First, EV batteries, which Morgan Stanley argues are the “new oil,” require more energy to manufacture than gas-powered cars and generate emissions since they are lithium-based. Second, most charging stations utilized to energize EVs receive their power from natural gas, coal, and nuclear, two of which are trading at or near all-time highs. Third, it is inevitable that Americans will face higher electricity prices because of the enormous demand EVs will generate.
As more players enter the market, fueling greater competition and innovation, the costs associated with EV ownership will inevitably fall, making it a reliable and more affordable alternative. For now, Americans are getting clobbered on all sides from the government-supported nudge to electric vehicles, including higher taxes to cover the costs of subsidies and tax credits and soaring energy prices.
Fossil Fuels Forever?
Despite the Biden administration’s objective to abolish the practice of imbibing fossil fuels, this is something that will be impossible to accomplish. Let’s look at what it will take to mine lithium. A company will need to construct a mine, extract ore, separate the metal through an intricate process, and pump underground water deposits to the surface. This requires a plethora of equipment and machinery, manufactured and powered with fossil fuels. Suffice it to say, as The New York Times wrote in May 2021, “Lithium Mining Projects May Not Be Green Friendly.” From the miners to the chemical processors to the industrial manufacturing to the recycling, every component of EV battery manufacturing will need fossil fuels, making the industry reliant on the power of crude oil, natural gas, and coal. Be it gasoline prices or EV cars, the typical Tesla driver is not superior in any way – financially or morally – to a Ford Taurus owner.
~ Read more Andrew Moran.