Why this could be a critical year for electric cars


Written by: Jack Ewing and Neal E. Boudette

Sales of purely battery-powered cars rose in the United States, Europe and China last year, while deliveries of fossil fuel vehicles stagnated. Demand for electric cars is so strong that automakers require buyers to make deposits months in advance. And some models effectively sold out for the next two years.

Battery-powered cars are having a breakout moment and will enter the mainstream this year when automakers start selling electric versions of one of Americans’ favorite vehicle types: pickup trucks. Its arrival represents the biggest revolution in the auto industry since Henry Ford introduced the Model T in 1908 and could have far-reaching consequences for factory workers, businesses and the environment. Tailpipe emissions are among the biggest contributors to climate change.

While electric vehicles still represent a small slice of the market (nearly 9% of new cars sold globally last year were electric, down from 2.5% in 2019, according to the International Energy Agency), their rapid growth could make 2022 the year the march of battery-powered cars became unstoppable, erasing any doubt that the internal combustion engine is teetering toward obsolescence.

The Lucid Air dashboard near Bear Mountain, NY (New York Times)

“It’s probably one of the biggest industrial transformations in the history of capitalism,” said Scott Keogh, CEO of Volkswagen Group of America. “The investments are huge and the mission is huge.”

But not everyone will benefit. Manufacturers of mufflers, fuel injection systems and other parts could go out of business, putting many workers out of work. Nearly 3 million Americans make, sell and repair cars and auto parts, and industry experts say producing electric cars will require fewer workers because the cars have fewer components.

Over time, battery ingredients like lithium, nickel and cobalt could become more sought after than oil. Prices for these materials are already skyrocketing, which could limit short-term sales by driving up the cost of electric cars.

The transition could also be constrained by a lack of places to plug in electric cars, which has made the vehicles less attractive to people who drive long distances or apartment residents who can’t charge at home. There are fewer than 50,000 public charging stations in the United States. The infrastructure bill that Congress passed in November includes $7.5 billion for 500,000 new stations, though experts say even that figure is too small.

And it could take time to see the climate benefits of electric cars: Replacing the 250 million cars and light trucks that run on fossil fuels could take decades, unless governments provide stronger incentives to car buyers. Cleaning up heavy trucks, one of the biggest sources of greenhouse gas emissions, could be even more difficult.

A 2022 Ford F-150 Lightning pickup, a battery-powered version of the popular F-150, in production at the company’s plant in Dearborn, Michigan (New York Times)

Still, the rise of electric cars is already reshaping the auto industry.

The biggest beneficiary, and the biggest threat to the established order, is Tesla. Led by Elon Musk, the company delivered nearly 1 million cars in 2021, a 90% increase from 2020.

Most analysts thought electric vehicles wouldn’t take off until they became as cheap as gasoline models, a milestone that’s still a few years away from moderately priced cars most people can afford.

But as extreme weather makes the catastrophic effects of climate change more tangible, and word spreads that electric cars are easy to maintain, cheap to refuel and fun to drive, wealthy buyers are increasingly turning more electric.

Porsche’s Taycan, an electric sedan that starts at around $83,000, outsold the company’s signature 911 last year. Mercedes-Benz sold almost 100,000 electric cars and vans in 2021, a 90% increase from the previous year.

Ford will soon start selling the Lightning, an electric version of the F-150 pickup truck, which has topped the US sales charts for decades. He initially planned to make 75,000 a year. But demand has been so strong that the company is racing to double production of the Lightning, which starts at $40,000 and goes up to more than $90,000. Ford stopped taking reservations after racking up 200,000 orders.

“We’re going to be able to sell as many as we can build,” said Hau Thai-Tang, Ford’s chief product platform and operations officer.

Electric car sales could have been even higher in 2021 had it not been for production bottlenecks. Volkswagen sold about 17,000 ID.4 SUVs in the United States, but could have sold four times as many, Keogh said.

Mike Sullivan, owner of LAcarGUY, a dealer chain, sold his ID.4s within weeks of their arrival. “When we have them, it’s the best-selling model,” he said. Supply will increase this year when Volkswagen starts producing ID.4s in Chattanooga, Tennessee, instead of importing them from Germany.

Going after Tesla, companies like Lucid are finding that starting an EV from scratch has its advantages. (New York Times)

At the high end, electric vehicles are already competitively priced and could save buyers thousands of dollars in maintenance and gas. (Electric cars don’t need oil changes, and electricity is generally cheaper per mile than gasoline.)

Tesla Model 3 and Jaguar XF P250 sedans retail for around $46,000. But owning a Tesla for five years costs $16,000 less, according to calculations by Kelley Blue Book, a vehicle appraisal company.

If Europe and China are any measure, electric vehicle sales in the United States will continue to soar. In December, battery-powered cars outsold diesel cars in Europe for the first time. In 18 countries, including Britain, more than 20% of new cars were electric, according to Matthias Schmidt, an independent analyst in Berlin.

In 2015, more than half of Europe’s new cars ran on diesel, a result of tax policies that make diesel cheaper than petrol. But government incentives for electric cars and penalties for automakers that don’t meet emissions targets have changed the equation.

About 4% of new cars were electric last year in the United States, up from 2% in 2020.

The goal of electric cars is to reduce tailpipe emissions, one of the main sources of carbon dioxide and the pollutants that cause smog. In Southern California, electric cars have already had a small effect on air quality, leading to a 4% reduction in nitrogen oxide emissions from passenger cars compared to what they would have been otherwise, according to the South Coast Air Quality Management District, which includes Los Angeles.

Of course, battery-powered cars also come at an environmental cost. But even taking into account the energy and raw materials they require, electric vehicles are much better for the climate than conventional cars, according to a study from the Yale School of the Environment.

Inevitably, such a momentous transition will cause dislocation. Most of the new electric car and battery factories planned by automakers are in southern states like Georgia, Kentucky, North Carolina and Tennessee. Its gains could come at the expense of the Midwest, which would lose jobs in internal combustion production.

Ford stopped taking reservations after racking up 200,000 for its Lightning trucks, more than two years of production. (New York Times)

That hasn’t happened yet, because gasoline vehicles still dominate sales. But as battery power gains market share, conventional models will benefit less from the cost savings that come from disposing of the same vehicle hundreds of thousands of times.

The next few years could be dangerous for automakers that have been slow to offer electric vehicles. Toyota, a pioneer in hybrid vehicles, will not offer a car powered solely by batteries until the end of this year. Ram doesn’t plan to release a competitor to Ford’s Lightning until 2024.

Chinese companies like SAIC, which owns the British brand MG, are using technological change to enter Europe and other markets. Young companies like Lucid, Rivian and Nio intend to follow Tesla’s playbook.


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