Free market vital in transforming auto fleet

While government can incentivize the purchase and use of electric vehicles, a lasting transformation of the nation’s automobile fleet will depend on the free market.

Manufacturers will need to supply enough vehicles to meet demand. Maintenance and repair services will need to increase. Mechanics with expertise in EVS will need to be trained and employed. Use-at-home charging stations will need to be produced.

Critics frequently suggest that electrification of the nation’s vehicle market can only be achieved through oppressive government programs; in truth, it can only be achieved through a changing free market that is responsive to consumer demand.

Those changes already are somewhat in evidence, with each large manufacturer developing and heavily promoting new lines of electric vehicles.

As Consumer Reports wrote this month: “Many auto makers have detailed plans to electrify large portions of their fleets over the next decade, with some announcing goals for fully electrified lineups within five years. Consumers might not even have to wait that long. Dozens of pure battery electric vehicles are set to debut by the end of 2024 if all goes according to plan.”

But plans can go awry.

With growing concern over the impact of emissions from gasoline-powered vehicles — and with rebates available from the federal government — demand for EVS is growing. Supply is not keeping up with demand, leading to higher prices.

Electric vehicles represent a small fraction of vehicles, but Investopedia reported in December that electric vehicles’ share of the global market doubled in 2022, and that investment in charging infrastructure tripled during that time.

The Infrastructure Investment and Jobs Act, signed by President Joe Biden in 2021, allocates $7.5 billion to build out the nationwide network of EV charging stations. States also are investing to increase the number of charging stations.

That is an example of government guiding the hand of the free market, but it represents only one of the moves that are necessary. The market will ultimately demonstrate whether Americans fully recognize the need to reduce carbon emissions and mitigate climate change as much as possible.

Getting there requires an honest cost-benefit analysis. Ignoring the impact of climate change would provide devastating costs in terms of responding to wildfires, atmospheric rivers, hurricanes and changes in agriculture. Embracing the reality will create new markets for wind- and solar-energy infrastructure, carbon capture and storage, and green construction — as well as the manufacturing and repair of electric vehicles.

For now, demand is outstripping supply when it comes to EVS. But when the market catches up to the new reality, it will provide a boon to the U.S. economy.