Electric Car Subsidies Are A Bad Investment | Opinion

Climate activists and politicians constantly tell us electric cars are cleaner, cheaper, and better. California and many countries, including the U.K., Germany, and Japan, will even prohibit the sale of new gas and diesel cars within a decade or two. But if electric cars are really so good, why do we need to ban the alternatives? And why do we need to subsidize electric cars to the tune of $30 billion per year?

The reality is far more muddled than the boosters of electric cars would have you believe. Carbon emissions from an electric car depend on whether it is recharged with clean or coal power. Moreover, battery manufacturing requires masses of energy, which is today mostly produced with coal in China. That is why the International Energy Agency estimates that an electric car using the global average mix of power sources over its lifetime will still emit about half as much CO2 as a gas car. You can buy that same carbon emission reduction on America's longest-established carbon trading system for about $300. Yet many countries pay more than 20 times that amount in subsidies to convince people to make the switch.

There is no air pollution from the engine of an electric car, but it needs electricity, which can end up polluting more. One new study found that electric cars cause more of the most dangerous particulate air pollution than gasoline-powered cars in two-thirds of American states. In China, an extra electric car pollutes slightly less if driven in areas with new, cleaner power plants, but it produces slightly more pollution in regions with older power plants.

Electric vehicles need a huge amount of battery capacity, and this makes them much heavier than comparable gas-powered cars. A new study shows that this weight difference alone means electric cars produce more particulate matter emissions from greater tire, road, and break wear than gasoline cars do. These heavy electric cars are also more dangerous for others in accidents. A study in Nature showed that in total, heavier electric cars will cause so many more deaths that the toll could outweigh the total climate benefits from reduced CO2 emissions. Consumer demand for longer-range and bigger batteries will make this problem worse.

While electric cars are cheaper to drive, they are expensive to buy. The average U.S. car costs $48,000 whereas an electric one now costs more than $66,000. A new U.S. government report finds that the lifetime cost of an electric car is 9 percent higher, even making the very generous assumption that the electric car will be driven as much as a regular gasoline car. In reality, electric cars are likely driven less than half as much, which makes the electric car much costlier again.

Electric car charging
A photo shows an electric car being charged on a terminal in a parking lot in Lille, northern France, on September 27, 2022. DENIS CHARLET / AFP/Getty Images

A new study shows only one in 10 households with an electric car relies solely on it. The rest have at least one non-electric car, with most including an SUV, truck, or minivan. For most households, at least one of those non-electric cars is driven much longer distances, making the electric one their "second car."

Electric cars require large amounts of minerals to manufacture, and an enthusiastic switch will increase demand for cobalt, nickel, and manganese 40 to 80 times by 2050. Lithium demand will explode to 140 times its current use for electric cars, with cars and storage each year gobbling up more than 10 times the current annual global lithium production. There are ethical problems with this production, for instance most cobalt mining in Congo uses child labor, and there are security problems arising from the fact that most mineral processing is concentrated in China.

Norway is currently the only country where most new cars are already electric. But such a path is only open to super-rich countries, because Norway is paying indirect subsidies of avoided sales and registration tax worth $23,500 per car on top of other tax breaks like reduced road tolls. Of course, oil makes up a large part of Norway's economy. The country is paying such high subsidies for such small CO2 reductions that it has to sell 100 barrels of oil, emitting 40 tons of CO2, to subsidize an electric car to cut just one ton.

While many pundits suggest electric car sales will dominate within a few decades, the quiet reality is starkly different. The Biden administration estimates that even in 2050 more than two-thirds of all cars globally will still be powered by gas or diesel. And if the vast majority of voters continue not to pick an electric car as their first choice even by mid-century, it is unclear whether politicians promising prohibitions would really dare tell them to do otherwise.

Ultimately, the reason electric cars are championed is because of their promised emission reductions. Yet the IEA estimates that even if the whole world achieves all of its ambitious stated electric vehicle targets by 2030, the additional saved CO2 emissions over this decade will be 235 million tons. The standard climate model used by the Intergovernmental Panel on Climate Change reveals that this will reduce global temperatures by only 0.0002°F by 2100.

Electric vehicles will only take over when innovation has made them better and cheaper than gas-powered cars. But politicians want the change now and are planning to waste hundreds of billions of dollars subsidizing electric cars, blocking consumers from choosing the cars they want, to achieve virtually nothing for the climate.

Bjorn Lomborg is President of the Copenhagen Consensus and Visiting Fellow at Stanford University's Hoover Institution. His latest book is "False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet."

The views expressed in this article are the writer's own.