The Senate Budget Committee Holds A Hearing To Consider The Future Of Electric Vehicles

2 months ago

The Senate Budget Committee held a hearing on Wednesday to consider the future of electric vehicles.

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Transcript

00:00:00hearing of the Senate Budget Committee to order and welcome my distinguished ranking member,

00:00:05Senator Grassley. We're going to begin with opening remarks by myself and then

00:00:10Ranking Member Grassley and then Senator Graham, at whose request this hearing is

00:00:17taking place. So let me start by thanking Senator Graham and his staff for their partnership on

00:00:24today's hearing and thank Ranking Member Grassley for his blessing of this effort.

00:00:30Today's bipartisan hearing looks at transitioning away from fossil fuels, in my view, an economic,

00:00:36national security, and climate imperative in a way that effectively seizes opportunities

00:00:43and addresses challenges. The auto industry is a major economic engine, as Senator Stabenow,

00:00:50who is here, will be the first to argue. In 2023, the global auto market was valued at $4 trillion,

00:00:58of which the U.S. accounted for a bit less than 17%. Two U.S. automakers, Ford and GM,

00:01:06are among the world's five largest automakers. Foreign companies operate assembly plants in the

00:01:13U.S. Senator Graham is attentive to the BMW plant that operates in his home state. Whenever we go

00:01:21do the Munich Security Conference, he's sure to check in with the BMW folks to make sure they

00:01:26keep building in South Carolina. Motor vehicles and parts were America's second largest export,

00:01:34and the auto market could increase to over $6 trillion by 2031. So we want to be a part of

00:01:42that action. To grow U.S. autoworkers' share of this growing pie, we need to understand and respond

00:01:50to this global market. So here's where we are. Globally, 20% of vehicles sold in 2023 around the

00:01:57world were electric. 20%. In China, which is the world's largest auto market, 33% of cars were

00:02:04electric. In Europe, 20% of vehicles sold were electric. And other major markets are racing to

00:02:11EVs. Between 2022 and 2023, electric car sales tripled in Brazil. And more than quadrupled in

00:02:21Thailand. And I put into the record an article from the New York Times, which I just now misplaced,

00:02:29but that points out how the Thai auto market has been lost to Japanese manufacturing, which used

00:02:38to control it because they aren't producing the electric vehicles that the Thai market

00:02:46demands. So you got to have the vehicles people want to meet the market. Here it is. Thank you.

00:02:53Without objection, I will add that to the record. The writing is on the wall for us. Around the

00:02:59world, the future of personal transportation is electric, completely independent of whatever the

00:03:03United States decides to do. And that's great. First, it means more freedom from a global

00:03:09commodity whose price is manipulated by international petro-dictators. Over and over,

00:03:15American consumers suffer as the geopolitical designs of petro-dictators cause oil prices to

00:03:21soar. Real energy independence comes from independence from fossil fuel cartels.

00:03:28Going electric benefits western democracies as oil and gas revenues fund many of our worst foreign

00:03:34adversaries. Look no further than the corrupt petro-tyrant Vladimir Putin. As we reduce our

00:03:42dependence on oil and gas, we diminish our foreign adversaries' ability to bully and corrupt.

00:03:47Senator Graham and I wrote in a 2021 op-ed published in Time magazine,

00:03:52if you could wave a magic wand and transition the world away from fossil fuels,

00:03:56Americans would instantly be safer. And without objection, I ask that that be made a part of the

00:04:02record. As the driver and owner of two Chevy Bolts, I'll also add they're just better cars.

00:04:10They're quieter, faster, and more fun to drive. They don't have tailpipe emissions stinking up

00:04:15highways and neighborhoods. Repair and maintenance costs are nearly nonexistent. No oil changes,

00:04:21one-tenth the number of parts to break or fail, no expensive, dangerous, smelly gasoline.

00:04:27In emergencies, EV fleets can even provide backup power to families when the grid goes down.

00:04:34And smart EV chargers can help shave dangerous load peaks for electric utilities, if we make

00:04:41the needed small investments in the required infrastructure. And, of course, yes, electric

00:04:48vehicles dramatically reduce carbon pollution in the transportation sector, currently the largest

00:04:53source of fossil fuel emissions in the U.S. The more we reduce carbon pollution, the better our

00:04:58chances of avoiding the dire, systemic, climate-related economic risks we've discussed

00:05:04in this committee over the last 18 months. It may be too late to save Florida's property

00:05:10insurance market, but there are plenty of other risks we'd be wise to avoid and fools to stumble

00:05:16into. Electrifying the transportation sector presents a tremendous economic opportunity.

00:05:23Automakers get the message that people want EVs, and they are responding. Since 2017, they have,

00:05:29along with their battery partners, invested $125 billion in electrification. Twenty states have

00:05:37or will have EV production or assembly of battery facilities. For some reason, Tesla's taking a hit,

00:05:45but other makers are seeing surging sales year over year. Ford EV sales increased 86%

00:05:53from the first quarter of 2023 to the first quarter of 2024. Rivian sales jumped 59%

00:06:00over the same period. So how do we position our auto industry and our nation for that

00:06:05economic opportunity and for global competitiveness? As our economy electrifies, it needs to be

00:06:10supported by a 21st, not a 20th century grid. The grid will need to handle increased demand

00:06:17from electric vehicles, from heating and cooling, from manufacturing, from hydrogen electrolyzing,

00:06:23and from energy gobbling data centers. To meet this demand with clean power requires new and

00:06:28upgraded transmission to deliver that power to consumers. That means smart reforms to our

00:06:34cumbersome and antiquated permitting process. Domestic supply chain investments must accelerate.

00:06:41Look at China. 15 years ago, China saw the value of electric vehicles and batteries

00:06:46and began investing. And now it dominates critical mineral and battery manufacturing markets.

00:06:52Let's learn the servitude lessons from our fossil fuel dependence and from our lost manufacturing

00:06:58capacity. Let's swiftly counter this emerging geopolitical risk with smart investment and take

00:07:04back our economic dominance in clean energy products. We must also find a way to reconcile

00:07:10the surging EV market with the Highway Trust Fund that provides 80% of federal highway spending

00:07:17with a majority of its revenue from federal gas taxes. The bipartisan infrastructure law,

00:07:22which most recently replenished the fund, sunsets in just two years. The clock is ticking on highway

00:07:29infrastructure funding. To my mind, this is a morning in America moment. Freedom from dependence

00:07:37on petro-dictators. Opportunity to reclaim from China clean energy leadership. Better, safer

00:07:45products for American consumers with more money in their pockets. Cleaner air to breathe along

00:07:51highways and neighborhood streets. And an important step forward on our pathway to climate safety.

00:07:58What's not to love if we do this right? Thank you again to Senator Graham for this hearing. I look

00:08:04forward to the conversation. And I turn now to Senator Grassley followed by Senator Graham for

00:08:09opening statements. Thank you, Mr. Chairman. Welcome to our expert witnesses. Our last hearing

00:08:16was with CBO Director Suego. He was welcomed. A very welcoming event at this committee.

00:08:25And unfortunately, a rare opportunity for this committee to focus on critical broken budget

00:08:33process. It gives us a chance to talk to somebody that knows that that process needs to be fixed.

00:08:43And a primary responsibility of this committee. In exchange for holding a CBO hearing, at my

00:08:51request, I agreed to Senator Graham working with Chairman Whitehouse to put together today's

00:08:57hearing. We'll be discussing electric vehicles and barriers to the electrification of America's

00:09:06light duty fleet. The Biden-Harris administration's unattainable goal of 50% new EV sales by 2030

00:09:19has been on full display over the last four years. From the imposing expensive EPA regulations to

00:09:28doing doling out billions in EV subsidies for the rich, the economic detriment to the EV policy,

00:09:39to America's EV policy is quite evident. Now, I don't want to give the wrong impression. EV

00:09:46technology is impressive and works well for some. But Iowans know that there are far more

00:09:53challenges to EV adoption that many care to admit. EVs best serve wealthier people who also live

00:10:04in or near suburban and urban areas. Perhaps the most prominent barrier to EV adoption

00:10:13is that EVs are uneconomical. CBO's February baseline set the record straight,

00:10:22telling us that the so-called Inflation Reduction Act's EV handout would increase the deficit by

00:10:30hundreds of billions of dollars. I also couldn't help but notice that the price of EVs rose

00:10:37immediately after the IRA's passage to absorb the bill's $7,500 new EV tax credit. These EV costs

00:10:48were then, of course, passed on to the consumer. Of course, now many had to be discounted because

00:10:56they haven't been able to sell them. And I've yet to hear a comprehensive plan to make EV owners pay

00:11:05into Federal Highway Trust Fund. EV drivers are currently free riding on the backs of the middle

00:11:14class. And although some states have instituted an extra fee for so-called fuel efficient vehicles,

00:11:25making them even more expensive. There are many holes in the rapid EV transition fantasy.

00:11:32They include a lack of critical minerals needed to produce EVs, lack of transmission infrastructure

00:11:40needed to support their increased electricity demands, and our current reliance upon nefarious

00:11:48countries in the EV supply chain. According to the University of Michigan, the world would need

00:11:57to mine 115% more copper from 2018 to 2050 than has been mined in all of human history up until

00:12:102018. Just to do business as usual. This copper mining doesn't even include the green transition.

00:12:21And the EV, they take three to five times as much copper as a standard vehicle. I hope we discuss

00:12:31where these critical minerals from the so-called EV transition will come from. China dominates the

00:12:39critical mineral supply chain, accounting for approximately 60% of the worldwide production

00:12:48and 85% of processing capacity. And we struggle to permit Federal projects here in America.

00:12:58From wind turbines to transmission lines to pipelines to hard rock mines, left wing

00:13:07environmentalists are holding up the permitting reform needed for the very EV expansion that they

00:13:15claim. The left claims climate crisis, but backs away from comprehensive reform when the environmental

00:13:25law becomes calling. They also claim to care about air quality and environmental justice,

00:13:33but ignore the unreported and underreported particulate emissions from tires under the heavy

00:13:43weight of EVs. Legislators must do better, and I hope this hearing serves as a stepping stone

00:13:52for honest permitting of dialogue moving forward. As we grapple with environmental red tape,

00:14:00the Chinese are rapidly expanding coal power plants to fuel EV manufacturing boom.

00:14:09I'd like to welcome all today's witnesses invited here by Senator Whitehouse and Graham. And finally,

00:14:15Mr. Chairman, I request unanimous consent to put this article called copper can't be mined fast

00:14:22enough to electrify vehicles. I thank you. Before you go on, I was thinking I mentioned a few

00:14:32inconsistencies in my opening remarks, but I think of others. And maybe it's being

00:14:40the adjective unrealistic or inconsistency may fit a couple things. But I was the number one

00:14:49producer of ethanol. We have 43,000 jobs in Iowa. And if we had every vehicle in the United States

00:14:57be EVs, you could see what that could do to the particular job that we created 40 years ago

00:15:08to produce a more environmentally friendly product than petroleum is. We have the inconsistency

00:15:19of the rainforest being hacked away to mine nickel in Indonesia. We have the inconsistency of people

00:15:30in the Congress that talk about we got to stop the use of child labor around the globe. And yet,

00:15:38we have children mining cobalt in Congo. I mentioned transmission in my opening comment.

00:15:46The chairman mentioned transmission. But this permitting process is halted by environmentalists

00:15:54not wanting to cut red tape here in Washington, D.C. And then you have the silly posture of the

00:16:03inflation reduction act appropriating billions of dollars for charging stations. And I guess to date

00:16:16we have about eight. So I just think there's a lot about this whole process that hasn't been

00:16:22thought out very well. I'm done now. Well, I hope that the 125 billion in private capital that

00:16:31has been dedicated to this says otherwise. Senator Graham. That's mercantile pot. Economic

00:16:36policy of the federal government. Well, thank you. Good morning. What have I learned? We have donuts

00:16:45at the budget committee. And I'm going to take a wild guess. Senator Grassley did not buy them.

00:16:51But he's welcome to as many of them as he wants. Senator Grassley, you laid out real challenges

00:17:01and everything you said is real. So what I want to do is thank the chairman for having this

00:17:09committee hearing about electric vehicles because I'm in a very heavy car manufacturing state.

00:17:17And they're making electric cars and hybrid cars and all kinds of cars. And I'm trying to figure

00:17:23out sort of like where should we what should we be doing and when should we do it as a nation?

00:17:29I met with a Chinese ambassador yesterday. I hadn't talked to him in a very long time. I'm

00:17:32going to go to China next year. They decided 15 years ago to get in this business for some reason.

00:17:37It seems to be like they were pretty smart. A lot of people are buying electric cars.

00:17:43President Trump says let them buy electric cars, do away with the mandate. Yeah, it makes some

00:17:50sense to me. The world seems to be making more electric cars and using electric cars.

00:17:56And what does that mean for us? Well, if you really want to compete in this space,

00:18:02Senator Grassley laid out some real challenges. Power. Let's say half the cars on the road at

00:18:11some point in time become electric. The grid demand will go through the roof.

00:18:21How can you generate enough power to accommodate electric vehicles? And where does it come from?

00:18:32Can you do it with all renewables? And how do you do it without natural gas?

00:18:36You can't. So to my friends in the environmental world, we need to be thinking about increased

00:18:43power production that can actually occur. That means regulatory reform and everything

00:18:48Senator Whitehouse just mentioned. But nuclear power. EVs, as projected, will take up all the

00:18:55power produced by the nuclear industry and certain renewables just by themselves. These data centers,

00:19:03you know, you're blessed to have them, but you're cursed too because they're just

00:19:08power consumers. So it seems the digital economy and electric vehicles is going to

00:19:14increase demand for power in a way nobody's really thought through. And where does the new

00:19:19power come from? How do you get it online? How do you get it delivered? It's something I think

00:19:24worthy of the Congress's consideration, not just this committee. So Chairman Whitehouse,

00:19:30thank you very much for having this. The demand seems to be real apart from the mandate.

00:19:40So what happens to the highway trust fund? Five billion in lost revenue if the numbers

00:19:50projected come true in the United States. So as Senator Grassley indicated, if you're driving an

00:19:57electric vehicle, we've got to find some way for you to pay into maintaining the roads.

00:20:03I don't know what the right answer is, but we better come up with it pretty quick.

00:20:08You know, we aim and shoot first and aim later is sort of what we're doing here. We're setting

00:20:14a goal to have 50 percent of all the cars in America become electric, but we haven't really

00:20:18thought through how you improve the grid to get there. Where does the revenue come from that will

00:20:24be lost? And China, to my colleagues, we're in competition with China in many areas. They

00:20:31dominate this market. Do we really want to replace dependence on Mideast oil and gas

00:20:37with China dominance of the supply chain in electric vehicles?

00:20:42The processing facilities to make a battery really don't exist here. How do you create them?

00:20:50And as Senator Grassley indicated, where do the resources necessary to make a battery come from?

00:20:56If we could make a battery out of corn, that would be good. I don't think we can, but I'm

00:21:02willing to have an open mind about that. So the bottom line is this is coming whether we like it

00:21:09or not. And I think there's an upside to it, to be honest with you. And there's definitely a downside.

00:21:18So from a national point of view, it seems to me that we've set a goal and we have not put the

00:21:24infrastructure in place to meet that goal. And from a Republican point of view, if you said there

00:21:30is no more mandate, I'd be curious to see what kind of sales would occur without a mandate.

00:21:38It wouldn't go to zero. Over the arc of time, there are going to be more electric vehicles,

00:21:44not less, in the United States. And over the arc of time, there are going to be a lot of

00:21:49Chinese electric cars all over the world. I'd like to compete in this space. Forget

00:21:56about the mandate for a moment. Consumers, particularly younger people, are into this.

00:22:03And the world is into this. America needs to play in this space for a variety of reasons.

00:22:09Whether it's clean air, whether it's just creating jobs for the new economy,

00:22:15whatever reason, we need to think long and hard about how we compete, the challenges we face,

00:22:22and we're behind in a game that's being played by China very aggressively.

00:22:27And when it comes to America's national security interest, I think we need to compete in the

00:22:33transportation space. So thank you for having the hearing. I don't know what the answers are

00:22:39to all these questions, but I do know that the march toward electric vehicles is inevitable.

00:22:50Thank you, Senator Graham. We have five witnesses here today who have been agreed on, each a

00:22:57bipartisan selection. The first is Dr. Jesse Jenkins, assistant professor at Princeton

00:23:02University with a joint appointment in the Department of Mechanical and Aerospace Engineering

00:23:08and the Andlinger Center for Energy and Environment. Dr. Jenkins also leads Princeton's

00:23:14Zero Carbon Energy Systems Research and Optimization Laboratory, which conducts

00:23:20modeling to evaluate low-carbon energy technologies and generate insights to improve energy and climate

00:23:25planning. Our second witness is Britta Gross, director of transportation at EPRI, formerly

00:23:32the Electric Power Research Institute. In her role, Ms. Gross is responsible for defining the

00:23:37market strategies needed to accelerate the electrification of the transportation system

00:23:42with a focus on identifying the gaps that need to be addressed to achieve 2030 climate goals.

00:23:48She was formerly the director of advanced vehicle commercialization at General Motors. So I hope

00:23:54she was smiling when we talked about Bolts. Third is Maureen Hinman, the cofounder and

00:24:00executive chair of Silverado Policy Accelerator. Prior to founding Silverado, Ms. Hinman served as

00:24:06director for environment and natural resources at the Office of the United States Trade

00:24:10Representative. She also served at the U.S. Department of Commerce as senior industry

00:24:15trade specialist responsible for international policy development and interagency advocacy

00:24:21for the U.S. environmental technology. Silverado is helping this committee in a number of areas,

00:24:27and I'm grateful to Ms. Hinman for being here. Our next witness is David Schwedert, the chief

00:24:32policy officer at the Alliance for Automotive Innovation. Before joining the alliance, David

00:24:36Schwedert was the interim president and CEO of the Alliance for Automobile Manufacturers. Prior

00:24:43to joining the auto alliance in 2015, Mr. Schwedert worked in the U.S. Senate for over 15 years,

00:24:49holding various positions, including staff director of the Committee on Commerce, Science,

00:24:54and Transportation. Welcome back, Mr. Schwedert. And last but not least, we have Jeff Davis, a

00:24:59senior fellow with the Eno Center of Transportation. Mr. Davis joined Eno in 2015 from his own

00:25:06transportation and public works research and consulting company. He started his career working

00:25:11in the House of Representatives, so also welcome back to you, Mr. Davis. Thank you all for joining

00:25:18us today. Dr. Jenkins, please proceed. You have five minutes for an oral statement, and your

00:25:23testimony, like that of all the others, will be put into the record completely.

00:25:30Thank you, Senator Graham, for organizing the hearing and the opportunity to testify.

00:25:36Thank you. I thank the chairman, the ranking member, and Senator Graham for the opportunity

00:25:40to testify and for organizing the hearing today. I'm Jesse Jenkins, a professor of energy systems

00:25:45engineering at Princeton University. I also lead the REPEAT project, which assesses the impacts of

00:25:49federal energy and climate policy, but I have to note that all views expressed today are my own.

00:25:54The United States is now in the early stages of a momentous transition in the automotive sector.

00:25:59Over 1.1 million battery electric vehicles were delivered to U.S. consumers in 2023,

00:26:04alongside over 183,000 plug-in hybrid electric vehicles. So by the end of 2023, almost one in

00:26:1110 light-duty vehicles sold in the U.S. had a plug. This transition to electric vehicles is a

00:26:16central pillar in the United States' efforts to both cut greenhouse gas emissions and reduce our

00:26:21vulnerability to shocks in global oil markets. Today, the United States is producing more oil

00:26:27than any country at any point in history, and yet the U.S. economy remains dangerously exposed to

00:26:33the volatility of global oil prices. The decisions of a dictator to invade a neighbor or a disaster

00:26:39on the other side of the world can send the cost of filling the tank in Denver or Des Moines soaring,

00:26:44and every $10 per barrel increase in the price of oil is a $210 million per day tax on American

00:26:50consumers and businesses. So we simply cannot drill our way to energy security, but we can

00:26:57electrify. By severing our reliance on gasoline and diesel to fuel our cars and trucks, we can

00:27:02finally secure America's independence from global oil shocks. Electrifying transportation is also

00:27:08critical to meet national climate objectives. Switching to EVs and cleaning up our grid is

00:27:13the critical one-two punch that will decarbonize transportation. President Biden established a

00:27:19goal to cut U.S. greenhouse gas emissions to half of our peak levels by 2030. To reach this goal,

00:27:24electric vehicle sales should make up about half of all light-duty vehicle sales by that date.

00:27:29That's up about five-fold from today's share. Yet, over the last nine months, sales of plug-in

00:27:34vehicles in the United States have plateaued, driving a growing gap between current trends

00:27:39and our U.S. climate targets. Electric vehicle sales growth actually accelerated through the

00:27:44third quarter of 2023, regularly exhibiting explosive year-on-year growth rates of roughly

00:27:4940 to 60 percent. But beginning in the fourth quarter of 2023, growth in U.S. EV sales has

00:27:55stalled, a trend that's continued through the first half of this year. At the current pace,

00:28:00sales of plug-in vehicles are up just 9 percent this year. If we look behind the top-line numbers,

00:28:05it's clear that the story so far is mostly about Tesla. Over the first half of 2024,

00:28:10Tesla sales contracted by 13 percent, while sales of all other plug-in hybrid vehicles and plug-in

00:28:16electric vehicles are up a healthy 31 percent. That's right in line with the Repeat Project's

00:28:21expectations for this year for the sector as a whole. Taking a step back, consumer surveys find

00:28:26that about half of U.S. vehicle buyers are considering buying an EV within the next 12 months,

00:28:31indicating substantial consumer interest and potential for large market growth.

00:28:36Cost and charging-related concerns remain the most commonly cited barriers to consumer adoption,

00:28:40but both trends are improving thanks to both market competition and private investment as

00:28:45well as supportive public policy. Millions of new EVs do mean much more demand for electricity,

00:28:51raising the question, is the U.S. grid prepared? First, it's important to note that given the

00:28:56dynamics of the fleet turnover, even if 100 percent of new vehicle sales were electrified

00:29:00tomorrow, it would still take about 15 years before the entire fleet of on-road vehicles

00:29:05were electrified, and it will take considerably longer than that given current trends. So we have

00:29:10some time to prepare America's electricity infrastructure, markets, and regulations for

00:29:15widespread adoption, but we best not waste that time. Repeat Project's 2024 current policy scenario

00:29:21expects EVs to consume the equivalent of about 8 percent of current total U.S. electricity use

00:29:26by 2030 and 17 percent by 2035. To put it another way, by 2035 EVs could consume nearly as much

00:29:34electricity as is produced today by the entire fleet of nuclear power plants or all non-hydro

00:29:40renewables combined. So while a lot of attention has recently been paid to increasing demand from

00:29:44data centers and AI, electric vehicles are actually likely to be a larger driver of electricity demand

00:29:50growth over the next decade than artificial intelligence. EV chargers also represent large

00:29:55new instantaneous power demands that could put stress on grid infrastructure. Coming home and

00:30:00plugging an EV into the level 2 charger is like flipping the switch on about a dozen or more

00:30:05window-mounted air conditioning units. Fortunately, it should be possible to avoid charging EVs during

00:30:10peak periods. Assuming only a modest level of flexible charging, Repeat Project scenarios expect

00:30:15EVs to contribute less than 4 percent of peak U.S. electricity demand in 2030 and 7 percent by 2035.

00:30:22Broader use of managed charging programs could further reduce, if not eliminate, the contribution

00:30:27of electric vehicles to peak grid uses. The technology for that is available today. All

00:30:32that's missing are the appropriate incentives. Thank you. Thank you very much. Ms. Gross, please proceed.

00:30:41Mr. Chairman, Mr. Ranking Member, and members of the committee, thank you for the opportunity to

00:30:45testify today. I'm Britta Gross, the Director of Transportation at EPRI. EPRI is an independent,

00:30:50nonprofit, energy research and development institute founded in 1972. The electrification

00:30:56of the transportation sector is challenging from a grid perspective, given the size of the load,

00:31:01the shorter lead times, and the fact that cars and trucks are mobile, which means this load can

00:31:05appear just about anywhere on the grid. But a load of this size is not unprecedented. Between 1965

00:31:11and 2005, the grid adapted to a load twice as large as transportation. Electrifying transportation

00:31:17is also an opportunity to diversify the load that's currently on the grid, which normally

00:31:23shows up as early morning or late afternoon load peaks. Utilities have to design for these peak

00:31:28loads to ensure electricity is reliable. But if utilities can take advantage of this typically

00:31:36flexible transportation resource, for example, to charge most vehicles at night,

00:31:40this can help minimize new grid investments and ensure a more affordable transition. Though the

00:31:46grid impacts of electric transportation will eventually be felt across the generation,

00:31:50transmission, and distribution systems, the near-term impacts are being felt on local

00:31:55distribution systems, those wires that lead to our homes, our offices, fleet depots, and

00:32:00charging sites today. When we look at the overall impact that 279 million vehicles will have on the

00:32:06grid, the light-duty vehicles, the cars most of us drive every day, they will consume the most

00:32:12energy. But that load will be distributed across the entire grid, and its impact on a local

00:32:17distribution circuit is generally minimal. But heavily concentrated fleets such as airport,

00:32:23car rental fleets, and trucking fleets will bring larger loads to these local distribution systems.

00:32:28So in EPRI's work, though we consider all loads from light-duty vehicles to heavy-duty vehicles,

00:32:33we're especially focused on fleets and trucking loads. A challenge that's unique to transportation

00:32:39is the timing mismatch between vehicle procurement and the time it takes to make grid upgrades.

00:32:44A fleet operator can order a dozen heavy-duty electric semis to be delivered in about four to

00:32:50six months today. Yet the time it takes to bring additional power to that site for charging can

00:32:55take anywhere from 18 months on average to multiple years if more significant grid upgrades are

00:33:00required. A second challenge is the market complexity. There are over 3,000 utilities and tens

00:33:07of thousands of fleet operators who have seldom had to deal with electric utilities. This means a

00:33:12fleet operator or a charging property developer with hundreds of sites nationwide has to be able

00:33:17to identify the right utility to begin planning efforts and then figure out how to apply for

00:33:22service when utilities all use different processes. To address these pain points, these key industries

00:33:29have to work together with utilities in unprecedented ways to share their electrification

00:33:33plans earlier with utilities and with utility regulators so that there's advanced knowledge

00:33:38of where and when loads will show up on the distribution system. Drawing on the expertise

00:33:44of the utility industry, fleet operators, charging providers, and vehicle manufacturers,

00:33:49we launched the EVs to Scale initiative and identified two critical tools to address current

00:33:54challenges and enable industry to get to scale. The first is an interactive online map that

00:33:59identifies where and when transportation loads are likely to appear on the grid at a local

00:34:04distribution feeder level. As fleet operators and charging providers share more of their

00:34:08electrification plans with us, confidence grows in where to prioritize these grid investments.

00:34:15And this map also now shows how much power is currently available on a utility's feeders to

00:34:20serve these loads. To our knowledge, this is the first time available hosting capacity maps have

00:34:25been aggregated in a single location and made public. This online mapping tool is available

00:34:30today. The second tool is a standardized service application template for the utility industry

00:34:36that provides fleet operators and charging developers with a common application form to

00:34:41request service for a charging site anywhere in the U.S. This will eliminate much of the time,

00:34:46complexity, and cost involved in reaching out to one utility at a time and providing the same

00:34:51information to different utilities. It is analogous to the college common app process. This common app

00:34:57tool is in development and will be available by the end of this year. Leading companies in

00:35:02transportation electrification, including Amazon, Enterprise, Daimler truck, Volvo truck, and many

00:35:07others are working with EPRI and the utility industry leaders to design these tools to ensure

00:35:12they will address the barriers to large-scale electrification of transportation. Thank you again

00:35:17to the committee for the opportunity to share insights on this important topic. I look forward

00:35:21to answering your questions. Thanks so much, Ms. Gross. Dr. Henman. Chairman Whitehouse,

00:35:28Ranking Member Grassley, Senator Graham, and distinguished members of the committee,

00:35:32it is my sincere pleasure to appear before you today. My name is Maureen Henman, and I am the

00:35:38chair and co-founder of Silverado Policy Accelerator, a non-profit, bipartisan think-and-do

00:35:43tank focusing on developing novel policy solutions to our most pressing economic, environmental,

00:35:49and national security challenges through a focus on rigorous research, cross-domain policy engagement,

00:35:55and granular policy implementation. Fittingly, the challenges before the global battery and

00:36:00electric vehicle supply chain represent a fulcrum of these risks, challenging our ability to

00:36:05transition American lives and livelihoods to a clean economy, maintain critical manufacturing

00:36:10base, and preserve energy independence. Currently, the EV battery sector is following a well-tread

00:36:17pattern of the United States acting as chief global innovator on critical emerging technologies

00:36:23but falling short on the downstream industrial development because our market economy,

00:36:28bound by the rule of law, cannot reasonably compete with the openly predatory non-market

00:36:33industrial policies of the Chinese Communist Party. To change this script, we need to broaden

00:36:38the collective understanding of the impact the CCP's policies have on global competition and

00:36:44American national security. While yielding price distortions that have created low costs for

00:36:49consumers in the short term, the CCP's industrial policies ultimately create an unsustainable risk

00:36:55matrix for the United States. For example, battery cell production costs, which comprise

00:37:00about 30 to 40 percent of the total vehicle production cost, sit at $114 per kilowatt hour

00:37:07in the United States, compared to just $82 per kilowatt hour in China. This difference is owed

00:37:13to the fact that materials remain about 30 percent cheaper in China. A cursory look at the EV battery

00:37:19supply chain reveals a troubling state of play. China has captured the balance of global supply

00:37:24chains for refined mineral products, battery components, and final products, including battery

00:37:30cells and electric vehicles. For several of the mine products that are unavailable within China

00:37:34itself, Chinese firms own a major stake in mines globally. China controls 28 percent of lithium

00:37:40mines, 41 percent of cobalt mines, and nearly 20 percent of copper mines. The CCP achieves these

00:37:47results through an industrial policy playbook I call the six S's. First, China sets specific goals

00:37:53and targets for what it determines to be priority sectors, including through sector-specific five-year

00:37:58plans. Next, the CCP shelters its infant industries from markets and competition using tools such as

00:38:04tariff and non-tariff barriers and limits on foreign investment. Simultaneously, China subsidizes

00:38:10target industries directly across the value chain and through a variety of payment systems, both

00:38:15formal and informal, including environmental arbitrage, and operating firms in a way that

00:38:21a market economy underpinned by the rule of law could simply not sustain. Concurrently, Chinese

00:38:27firms and often the government itself are encouraged to acquire or outright steal foreign technologies

00:38:33and then merge and innovate upon them without the costs associated with legal acquisition of

00:38:37intellectual property. Once Chinese technologies have a toehold in global markets, the CCP subverts

00:38:43competition through a variety of market strategies, including undermining market pricing by building

00:38:49overcapacity in production untethered to real demand and then exporting the surplus on the

00:38:54global market at below-cost prices, throttling or limiting supply to undermine competitors,

00:38:59making strategic investments in adjacent industries and critical infrastructure in key markets,

00:39:04and engaging in economic coercion and intimidation. Finally, once China has established a near-market

00:39:10monopoly, Chinese firms sell everywhere at a price of their choosing, weaponizing supply

00:39:15chains in their favor. The CCP's approach dwarfs other nations' efforts, not just in strategy,

00:39:21but critically in scope, scale, and consistency across the entirety of the supply chain. Put

00:39:27simply, China unfairly and illegally subsidizes more programs for more critical nodes over a

00:39:32longer period and with more dollars. The CCP's stated goal is to establish a global monopoly

00:39:38power in all critical industries, and they are well on their way to achieving this end in the

00:39:42EV battery market. The International Energy Agency anticipates that China's battery manufacturing

00:39:47capacity will account for 77 percent of world demand by 2030. These cheap batteries are no deal.

00:39:55Effectively countering these efforts will require that the United States and market economies deploy

00:39:59coordinated, agile policies at a scale sufficient to correct for the market distortions and to

00:40:05protect U.S. public and private investments in industrial and environmental security.

00:40:10Silverado and I remain at your service as you devise policies that can meet this

00:40:15generational challenge. Senators, I thank you for your time.

00:40:20Thank you so much, Ms. Hinman. Next is Mr. Schwedert.

00:40:23Chairman Whitehouse, Ranking Member Grassley, Senator Graham, and members of the committee,

00:40:27my name is David Schwedert. I'm the Chief Government Affairs and Policy Officer at

00:40:31the Alliance for Automotive Innovation, representing the automakers, battery suppliers,

00:40:37and, excuse me, producing most of the vehicles sold in the U.S. Thank you for the invitation

00:40:44to testify and to share our perspective this morning on the U.S. electric vehicle market

00:40:48and policies to help accelerate this transition. Today, I want to provide the auto industry

00:40:54perspective on the shift towards electrification and to give the committee a status report

00:40:59about not only what's working, but also where there's work to be done.

00:41:03Let's start with this. Electrification is transforming personal mobility.

00:41:08It's rewriting global supply chains, rebuilding domestic industrial base, and creating jobs,

00:41:15and underpinning of the American economy and, of course, our national security in fundamental ways.

00:41:21Today, 113 electrified products, sedans, pickups, utility vehicles, and van models are available for

00:41:29sale in the U.S. This includes battery electric, plug-in hybrid, and fuel cell vehicles. There's

00:41:36also increasingly efficient internal combustion engine technologies, lots of choices in powertrain

00:41:42and vehicle type, something for sale that meets the needs of every customer. Choice is a priority

00:41:48for automakers. Last year, 9.5% of all U.S. light-duty sales were electric or zero emission,

00:41:56up from 2.4% in just 2020. Even with this major momentum, we're in a challenging period,

00:42:02as Senator Graham noted this morning. Yes, the EV market is still growing,

00:42:07but the growth is slowing. One reason, most EV early adopters have already adopted the technology.

00:42:14Spikes in EV demand or choppy growth are certainly not surprising. In our view,

00:42:19this massive transformation is a marathon, not a sprint. Shifting to electric personal mobility

00:42:25requires nothing short of a complete transformation of the global automotive industrial base,

00:42:31and the companies I represent are self-funding this transition and have committed over $125

00:42:37billion to EV production and battery manufacturing across the country so far.

00:42:43This is expected to create 100,000 jobs at major facilities in South Carolina,

00:42:49Georgia, Tennessee, Alabama, Michigan, Ohio, Kentucky, Kansas, Indiana, and other states.

00:43:00My written testimony includes a map of these cutting-edge facilities all over the Midwest

00:43:04and Southeast. Senators, we're building these vehicles and localizing these supply chains here

00:43:10at home right now. But the truth is, these massive capital transformations are huge bets,

00:43:16and they're funded using profits generated from gas-powered vehicles.

00:43:20Automakers know that a shift at this scale won't happen overnight. This transition takes time and

00:43:26patience, and it's important to the committee and policymakers to understand these dynamics as well.

00:43:32Collectively, we cannot get ahead of the customer, especially when we are expanding

00:43:38public charging infrastructure or expanding grid capacity. Finding the right balance between

00:43:44markets and regulations and policy is absolutely key to remaining globally competitive.

00:43:49Let me take one observation about supply chains. This is partially a point about geopolitics,

00:43:55namely China, that controls a vast amount of raw materials and processing capacity for EV batteries.

00:44:01By 2035, the U.S. is anticipated to have supply gaps in excess of 50 percent of the needed cathode

00:44:08and anode materials, nickel, cobalt, manganese, and graphite. At the same time, America's allies

00:44:15and rivals are trying to secure the same mineral supplies to support their own electrification

00:44:21goals. Domestic mining and processing facilities face long lead times for permitting and development,

00:44:28as well as other obstacles. This is an area where I believe congressional attention and action is

00:44:33needed, and I'm actually pleased to know that this morning the Senate Energy Committee is taking up

00:44:38bipartisan permitting reform legislation. One last point on China and U.S. competitiveness.

00:44:45At the turn of this century, China was manufacturing around 2 million vehicles.

00:44:49Today, they manufacture 30 million vehicles and have capacity for nearly 50 million.

00:44:56Nearly one-third of that production last year was for EVs alone. In other words,

00:45:01China is manufacturing EVs equivalent to the entire U.S. manufacturing output.

00:45:08Without question, the future often offers consumers more vehicle choices than ever,

00:45:14but we've got some challenges in front of us. The auto industry and policymakers need a shared

00:45:19and a realistic vision of success when it comes to automotive electrification.

00:45:23Regardless of political views or what state you live in, we need an approach in this country

00:45:28that balances emission reductions and consumer choice and expands our industrial base and

00:45:33America's ability to compete around the world. Thank you, and I look forward to your questions.

00:45:38Thanks very much. Before I turn to Mr. Davis, an administrative moment

00:45:43to let everybody know that Senator Graham and I are yielding our positions to, first,

00:45:49Senator Stabenow and then Ranking Member Grassley. So the order at the conclusion of Mr. Davis's

00:45:56five minutes will be Stabenow, Grassley, Whitehouse, Graham, Merkley, Braun, at least for openers.

00:46:03Mr. Davis, please proceed. Mr. Chairman, Mr. Ranking Member,

00:46:08Senators, my name is Jeff Davis. I'm a senior fellow at the Eno Center for Transportation.

00:46:12Eno is a 501c3 nonprofit, nonpartisan think tank founded by traffic pioneer William Phelps Eno in

00:46:181921. All federal gasoline and diesel fuel tax receipts, along with trucking industry excises,

00:46:25have been deposited in a highway trust fund since 1956 to make it clear that those levies on highway

00:46:31users can only be spent on specific highway programs. Congress has since opened up the

00:46:36trust fund to highway safety and mass transit spending as well. The highway trust fund has

00:46:40been fundamentally insolvent since 2008. Electrification did not start this problem,

00:46:46but it stands to make the problem much worse in the coming years. The state of insolvency is the

00:46:50result of three trends. First, the rate at which driving on U.S. roads increases every year has

00:46:55leveled off. From the 1950s to the end of the 1970s, total vehicle miles traveled, VMT,

00:47:01on American roads grew at a pace to double every 16 years. It's slowed so much now the Federal

00:47:07Highway Administration this month projected a future rate at which it would take VMT 140 years

00:47:12to double. Second, tasking the number of gallons of gasoline and diesel fuel used on roads was

00:47:18originally a proxy for taxing VMT. In 1976, the average passenger car on the road burned 7.2

00:47:25gallons of gasoline for every 100 miles driven. Today, the average passenger car on the road

00:47:29burns 4 gallons of gas every 100 miles. For SUVs and pickups, fuel efficiency has increased from

00:47:359.3 gallons per 100 miles in 1976 to 5.6 gallons per 100 miles today. Third, Congress has been

00:47:43unable to either keep trust fund spending constrained to tax receipt levels or else

00:47:47increase tax receipts. Congress has now enacted five consecutive multiyear funding bills,

00:47:51in which case, in which new funding in the final year of each bill was at least 25 percent above

00:47:57new trust fund taxes and interest. These trends caused the Highway Trust Fund to run out of money

00:48:02in 2008, before the first plug-in EV, and Congress has since provided $272 billion in ad hoc bailouts

00:48:10from the general fund. Now electrification is having its effects. According to the Congressional

00:48:15Budget Office's June 24 forecast, the number of gallons of gasoline taxed from the Highway

00:48:20Trust Fund will fall from about 138 billion gallons in 2024 to 89 billion gallons in 2034.

00:48:28Annual gasoline tax receipts are projected to drop more than 5 percent per year starting in 2030.

00:48:34If we combine this newly projected drop in gas tax revenues with currently projected

00:48:39trust fund spending, annual cash deficits in the $13 billion a year range today

00:48:44will jump to an astounding $51 billion deficit in 2034, a decade from now.

00:48:51Because the trust fund used to be solvent on a user pay basis, and for other historical reasons,

00:48:55trust fund spending is exempt from most of the restrictions and controls in federal spending

00:48:59written into the Budget Act and subsequent process statutes in this committee's jurisdiction.

00:49:04If one were to try to fix that predicted $51 billion trust fund deficit in 2034 solely by

00:49:09increasing gasoline taxes, and let me emphasize, absolutely no one is advocating this, the current

00:49:16$18.3 per gallon gasoline tax to the trust fund would need to be increased by about $0.58 per

00:49:21gallon to a total tax of about $0.76 per gallon of gasoline. There are alternatives to motor fuel

00:49:27taxes that could continue the user pay, user benefit paradigm that underlies federal trust funds,

00:49:33which I address in my written testimony, but none are nearly as easy to administer as the gasoline

00:49:38tax. Going from fuel to vehicle as the subject of taxation means going from about 1,300 points

00:49:44of collection of gasoline taxes and diesel taxes to 279 million points of collection, which is the

00:49:50number of registered private vehicles in the U.S. in 2022. Taxing vehicles would be over 200,000

00:49:56times as much work for the IRS as taxing motor fuel. In short, if rapid decarbonization of

00:50:02highway transportation is to be a federal policy goal, Congress should carefully consider whether

00:50:07and how to replace the fossil fuel based highway user taxes that currently support highway and

00:50:13mass registering with some other revenue source. Thank you, and I look forward to your questions.

00:50:20Thanks very much, and I will now turn to the distinguished senator from Michigan who I think

00:50:29knows and cares more about the auto industry than pretty much anybody around here.

00:50:34Thank you so much, Mr. Chairman, and Senator Graham, who I know cares passionately about

00:50:41manufacturing. We share that in common, and I could talk all day. I won't. I know I don't

00:50:48have all day to talk about this, but let me first start by saying that no one is forcing Americans

00:50:54to buy electric vehicles, but I have one. Nobody forced me to get it. My price didn't go up with

00:50:59the tax credits. Unfortunately, the latest run on tax credits is so complicated and limiting that

00:51:05it's certainly not helping as much as it could help, but I will say the biggest issue is charging

00:51:12stations, and I'm about to test that again. I mentioned to the chairman I haven't driven my car

00:51:18from here to Michigan in about a year, and I'm going to test it again to see how many more charging

00:51:23stations we have to be able to get me back to Michigan in a couple of days. I do want to

00:51:30emphasize, though, and I've said this before, you know, in 1917, when Congress began heavily

00:51:35subsidizing oil production because of fines down in Texas, we didn't have gas stations on every

00:51:41corner either, and in fact, at the same time, Henry Ford and Thomas Edison were working to

00:51:47develop a battery-operated car, but they had no subsidies, so Congress picked a winner, and they

00:51:54won for over 100 years, and now we're trying to expand this out, and I would say also, Senator Graham,

00:52:02I agree with you. We have a lot of issues, and I guess what I would say is I think we know more

00:52:08of what the answers are. We just need to do it, and then we need to find out where we need to

00:52:13find, you know, know more about this, but chargers, not, you know, we know we need more charging

00:52:18stations. Electric grid capacity, absolutely. Both of those things are beginning to happen. We're

00:52:23investing in that through the bipartisan infrastructure bill, more usable consumer

00:52:29credit, more American access to rare earth materials. We actually have new mining capacity,

00:52:36lithium capacity being developed in Nevada, which is very exciting because we're way behind.

00:52:41I would also say that our companies are looking at using different kinds of technology that don't

00:52:48take all those rare earth materials. Also, recycling, which is becoming a job creator in Michigan

00:52:54for materials, so there's a lot of things there. More battery production, which we know that we

00:53:00need in the United States, and of course, we need to change the highway trust fund, absolutely,

00:53:05but I support American innovation. I will tell you in Michigan right now, we have a stretch of road

00:53:12being built that actually has the charging technology in the road, Mr. Chairman,

00:53:17so that when you drive, you will automatically have your car charged. So, I support American

00:53:24innovation. Are we there? No. But we are certainly getting there. And I would also say this,

00:53:30our biggest competitor, there's no question about it, is China. But right now, our companies are

00:53:35competing against a country. That's what's happening. There is not a level playing field.

00:53:42Specifically, China is coming for us. They want to corner the EV market, and their government has

00:53:49heavily subsidized this effort, and they've also been willing to steal our patents, I should tell

00:53:54you, coming from Michigan. So, what do we do? I mean, we, I believe, have the smartest, most talented

00:54:02auto workers and automakers in the world. We need to do our part to help them create a level

00:54:09playing field. And that's why I'm so glad that we are doing this hearing, because we're talking

00:54:15about more than 10 million good-paying jobs right now. So, Mr. Jenkins, in your testimony, you

00:54:21mentioned the most important thing Congress can do now for the EV sectors to provide policy certainty

00:54:28and continuity. Could you talk a little bit more about that? I know that

00:54:31our private sector, our automakers say, just give me certainty about what's going on.

00:54:39Thank you, Senator. By that, I mean that the tax credits that were implemented in the IRA have just

00:54:43been finalized in terms of their guidance, and many of the programs authorized and funded by

00:54:47the infrastructure law are authorized to spend down through 2026. So, these programs are just

00:54:51getting underway, and industry needs to know that they can count on a stable policy environment to

00:54:57make the hundreds of billions of dollars of investments they've announced across the United

00:55:00States, and to do that with confidence, to drive innovation, and to expand our supply chains.

00:55:05And so, I think the most important thing that can be done now is to provide that

00:55:08confidence for the industry with bipartisan support for the maintenance of existing policies.

00:55:15Also note that on the consumer side, consumers are just getting familiar with how these tax

00:55:18credits work. You know, January this year, we started to offer at point-of-sale rebates. That's

00:55:24a new thing for people. So, there's a lot for people to get familiar with. We just set the stage.

00:55:29Let's let our American companies and innovators play on that stage and do what they do best.

00:55:34Great. Thank you. And, Mr. Espeto, would you just briefly comment on the same issue?

00:55:40Sure, Senator. Obviously, policy certainty is absolutely essential. I mean, you talked about

00:55:45not just the certainty as it relates to potential tax incentives, but in a competitive environment,

00:55:49we need to look beyond just five or ten years. We need to ensure that policies are in place to

00:55:54ensure that the U.S. is competitive, not just tomorrow, but well beyond that. So,

00:55:58that certainty is important. And, Senator, as you know, oftentimes, the general public forgets about

00:56:04the long lead times in automobile manufacturing and production. The decisions made today in

00:56:09calendar year 24, model year 25, are effectively locked. Manufacturers are already looking out to

00:56:14model years 28. So, policies that change today have a material impact, but they don't fully

00:56:20get realized for years to come. So, that's why that policy certainty is so important. We need

00:56:25to ensure incentives are here to build resilient supply chains, to support consumers, as well as

00:56:30to attract the investment in the jobs that we're witnessing. Thank you. Thank you, Mr. Chairman.

00:56:35Thank you very much, Chairman Stabenow. Ranking Member Grassley.

00:56:38I'm going to start with Dr. Jenkins. Your written testimony notes, quote,

00:56:43President Biden established a target to cut U.S. greenhouse gas emissions to half

00:56:50of peak levels by 2030. To reach this goal, electric vehicle sales should be making up

00:56:57about 50% of the light-duty vehicle market by that date, up about five-fold from today.

00:57:04Your testimony also recognized, quote, unquote, a remarkable collapse in EV sales this year.

00:57:12Given the evident lack of demand for EVs, is this Biden-Harris administration goal of five times

00:57:21today's EV sales attainable by 2030? Great questions, Senator Grassley. At this stage,

00:57:30I should note that's a goal. It's non-binding. And we'll see where consumers go with the products

00:57:35that are being offered on the market. I'll note, as I did in my oral testimony, that most of the

00:57:39collapse in sales, all of it really is Tesla, who is the market leader, responsible for about 45%

00:57:45of all plug-in vehicle sales. So, if they're stumbling to sell their vehicles, it's very

00:57:49difficult to see the overall market expand at a pace that's consistent with that goal.

00:57:53But the rest of the market is becoming increasingly diversified. We're seeing strong growth

00:57:57in a variety of companies offering more and more products that consumers want

00:58:01at price points that they can afford. And we're seeing increased interest from consumers. As I

00:58:05mentioned, over half of consumers surveyed are interested in buying an EV within the next year.

00:58:09Not all of them will do so, but that indicates substantial opportunity to grow. And we're in

00:58:14the early stages of this transition. Dr. Sweetheart, your written testimony

00:58:21states in bold, quote, if U.S. policymakers do not support the development, commercialization,

00:58:29and acceptance of electrified vehicles, our nation risks becoming more dependent on foreign sources

00:58:36for raw materials and critical minerals in the future defined by our competitors.

00:58:42You also note that, quote, China is manufacturing EVs on a scale equivalent to the entire

00:58:49manufacturing output of the auto industry in the United States. The left is holding up the

00:58:55environmental permitting reform necessary to mine for the domestic critical minerals,

00:59:02which we need to compete with China while urging a massive EV market share expansion.

00:59:09It just doesn't add up. So my question, should we do more to mine for critical minerals domestically

00:59:17and what specific pieces of environmental legislation should we amend to improve our

00:59:24mining capacity? And let me suggest before you answer that, that maybe a couple months ago,

00:59:31I read about the nickel mining in Indonesia at the same time that our own government was

00:59:38not allowing such mining in Minnesota. Well, Senator, thank you for those questions.

00:59:45I would like to underscore that, you know, again, there's a record number of options and choices

00:59:49available to consumers today. As it relates to the supply chains, the best time to start was

00:59:54yesterday. The next best time on permitting was to start today. So we can't have permitting reform

00:59:59fast enough as it relates to addressing not only what the U.S. may need for future supply chain

01:00:04resilience, but also working with our allies and partners, knowing that obviously auto standards

01:00:09are set well into the future. And even if we started today with mining and extracting in the

01:00:13U.S., it might be 15 or more years before we may see the benefits of that extraction processing.

01:00:19So again, I think that underscores the critical importance. If the U.S. is to remain competitive

01:00:25across all vehicle platforms, that the supply chain piece is fundamental.

01:00:31I think you express the inconsistency between environmental policies and what the same

01:00:36environmentalists think we ought to do for EV vehicles. Mr. Davis, as you know, the Federal

01:00:43Government Highway Trust Fund has operated at a deficit, is currently projected by the

01:00:49Congressional Budget Office to become insolvent in 2028. Even though the existing taxes that fund

01:00:57the trust fund generally adhere to user pays principle for surface transportation, the Federal

01:01:04Government has not followed the lead of at least 24 states that impose higher registration fees

01:01:10on EVs to compensate for lost gas revenue. Do you agree that if we want to maintain the user fee

01:01:17pays principle that is traditionally guided these trust fund taxes, we should ensure EVs are also

01:01:26paying their fair share? Thank you, Senator. If you want to maintain the user pay, user benefit

01:01:33principle, that all vehicles that use the road should pay something, the question of what would

01:01:39the proper way be to tax EVs depends on, first of all, if the government is going to shift away

01:01:45from gasoline tax to another method in general, if so, you tax EVs like you tax the rest of them on

01:01:50mileage or whatever. If not, the states that are doing EV registration fees, as long as they are

01:02:00around the ballpark average of what an internal combustion vehicle of the same size in actual way

01:02:05would do on average mileage is a sort of proxy. It's not a great proxy because it doesn't

01:02:10differentiate between the car that drives 3,000 a year and the car that drives 30,000 miles a year.

01:02:17Right now, it's about $89 a year is the average in gasoline taxes paid for a passenger car,

01:02:24and it's about $110 in federal fuel taxes paid for a larger SUV or pickup truck. If an annual

01:02:33registration for EVs were in that ballpark, you could honestly say that it was as close

01:02:39an approximation of a true user fee as it would be easy for the IRS to administer

01:02:44and would be consistent with the user benefit principle.

01:02:51Thank you very much, Senator Grassley. Ms. Gross, you and Dr. Jenkins both talked about

01:03:00how EVs can contribute to our electric grid security through peak shaving

01:03:08or even putting power back into the grid when it's needed.

01:03:15In terms of peak shaving, you'd need the capacity to tell charging EVs to stop charging through the

01:03:22peak period and then automatically resume charging, so you'd need a signal to the automobile from the

01:03:29utility and willingness of the consumer to accept that. To do that peak shaving function,

01:03:37what does Congress need to do to help? Are there standards that need to be built in?

01:03:43Is the industry doing it on its own? Let me ask you to go first, and Dr. Jenkins,

01:03:47if you had added thoughts, you can follow up. Ms. Gross, you first, please.

01:03:52Sure. Thank you, Senator, for the question. Happy to talk through this one.

01:03:57The electric vehicles, it's unlike a load we've ever seen before on the grid. It's the smartest,

01:04:04biggest, and most flexible load, so there's this huge opportunity to charge the vehicles at night,

01:04:09many, not all, not all, not if you're taking a long-distance trip or you're trucking and you

01:04:13have to travel during the day, but that opportunity to charge when the grid has

01:04:19spare capacity is a huge opportunity. It's going to keep our costs low on the grid, too,

01:04:24that capital investment in ever increasing the peak that has to be served on the grid.

01:04:30So this idea that V to G and V1G, either single direction, which is basically smart charging,

01:04:36charge when I want you to. V to G, meaning vehicle to grid?

01:04:39Beg your pardon? V to G, meaning vehicle to grid?

01:04:42Vehicle to grid, perfect. Vehicle to grid is, and also vehicle to grid, meaning,

01:04:47and also bidirectional, so that not only can I take power from the grid when there's plenty of

01:04:54surplus capacity at night or maybe when a lot of sun is shining in some of the states, but I can

01:05:00also give back to the grid when there are times when the grid is struggling to keep up with maybe

01:05:06load on the grid, and so V to G is certainly a promise that's out there. There's a lot of work

01:05:11getting done in that area, but smart charging is here today.

01:05:14Let me ask you and Dr. Jenkins both to provide a written recommendation to Senator Graham and to

01:05:21myself about what we might do working together to make sure that as EVs come online, they have the

01:05:29necessary capability so that the consumer can take advantage of that capability, and also,

01:05:35if you're going to offer a utility that capability, that adds value to the utility.

01:05:39What benefit should the consumer get from the utility for offering up their vehicle as a

01:05:45resource, either by taking it willingly offline during peak periods or by limiting charging to

01:05:51the night or however that works? It's a bit of a complicated question, but I think there's room

01:05:55for real bipartisan activity here, and I'd love to have a recommendation from both of you.

01:06:01In my remaining two minutes, Ms. Hinman, first of all, thank you for all your terrific work.

01:06:06You've described the economic and national security risks of Chinese, which are called

01:06:10weaponized supply chains. Is there also a climate risk associated with China's supply chains?

01:06:20Yes. Thank you so much, Senator. Absolutely.

01:06:24Is there a policy that would help fix that?

01:06:28I think I know of at least one. China's rent-seeking also arrives in this form of

01:06:33what we call environmental arbitrage or creating a pollution subsidy. Essentially, how it works,

01:06:39even though China has the technical capacity to enforce its own environmental rules, because it

01:06:44produces many of those in technologies, and in fact, in air pollution control in particular,

01:06:49is the world's leading exporter of air pollution control technology. There's widespread evidence

01:06:55that China, particularly among their state-owned enterprises, intentionally reduces its inspection

01:07:00rates and then refuses to operate its air pollution control machinery. Now, if you look at like a

01:07:07coal-fired power plant scrubber, if you leave that scrubber off, that reduces your energy costs of

01:07:14operation of air pollution control materials by about 15 to 20 percent total. So, you're getting

01:07:22a 15 to 20 percent pollution subsidy on your total energy production for everything that you produce

01:07:28that comes off that coal-fired power plant. I don't know a single manufacturing firm in the

01:07:34United States that wouldn't love a 20 percent subsidy on their energy costs. This is deeply

01:07:39unfair. It's unfair in terms of competitive sense, but also in a climate and environmental sense,

01:07:44because that is SOx, NOx, and of course carbon and other climate pollutants being pumped up

01:07:52into the air at a deeply unfair rate that advances our sort of decline in terms of climate stability.

01:08:02One important way that we could counter this is that both the United States and friends could

01:08:07actually levy a border fee that corrects for this market imbalance and levels the playing field in

01:08:13terms of both climate and other pollution values. The figures behind this are known, and I know

01:08:20there's several very good bills floating around the Hill right now, both on the quantification

01:08:24side, but also on the particulars on those measures and how we might work with partners.

01:08:30And that makes the perfect segue to Senator Graham, who along with Senator Cassidy has a

01:08:35bill to that effect, and I would note that Ambassador Lighthizer, who is President Trump's

01:08:40trade representative, is also a fan of that policy. So with that, let me turn it over to

01:08:47Senator Graham and thank him again for helping put this hearing together.

01:08:52And I'll thank you and Senator Grassley for having, because this is the first of many

01:08:55conversations I think we're going to have. Mr. Schweikert, did I say your name right?

01:09:00Schweidert.

01:09:01Schweidert, I'm sorry.

01:09:02It's a mouthful.

01:09:02How about David? Okay, David,

01:09:08are car companies making electric vehicles because they have to or they want to?

01:09:15Senator, I think there's no question, as you noted earlier, that electrification is the future.

01:09:19So for purposes

01:09:20Well, I mean, is it the future based on consumer demand or government policy?

01:09:25I would say it's a mix. Obviously, I think regulations are

01:09:28I agree. Mr. Jenkins,

01:09:34why does does China make electric vehicles because of climate policy?

01:09:41No, it's primarily a response to strategic manufacturing policy and air pollution

01:09:46reduction goals. They basically strategically selected electric vehicles as an opportunity

01:09:50to leapfrog internal combustion engine manufacturing, which is an area that the

01:09:54West, the United States. But it's not driven by climate. I mean, it's not really worried

01:09:58about climate. You wouldn't use a coal fired plant to to power a electric vehicle plant, right?

01:10:04Well, with China's average grid mix, it actually does reduce greenhouse gas emissions relative to

01:10:09an internal. So are they making all these cars because they're worried about the environment?

01:10:12They're worried primarily about air pollution and their strategic role in manufacturing in

01:10:16the global market.

01:10:17Ms. Heineman, why do we make electric cars? Is it because of consumer demand or government policy?

01:10:29My sense is it's it's it's per my my colleague to my left is it's because it's a combination

01:10:34of the two. But, you know, market economy. So the government does work.

01:10:37So some people want them right. So, David, if we did away with the mandate or the goal of having

01:10:44half the vehicle fleet electrified, a government policy by 2035, what percentage of the cars on

01:10:53the road do you think would be electric without a mandate?

01:10:59Senator, that's a very good question. Last year was nine point five percent. So if we fast forward,

01:11:05it's it's hard to say. A lot of it depends on how reliant.

01:11:08Well, let's just say we did away with the mandate. Trump says he wants to do it. Well,

01:11:12let end electric car manufacturing in America.

01:11:16No, however, we might have unbalanced things as it relates to whether or not the U.S. is competitive

01:11:21as it relates to some of those supportive policies, whether it's tax incentives or.

01:11:26Right. Yes. So, Ms. Heineman. Is that right, Hinman?

01:11:31It's Hinman.

01:11:32OK. All right. Is the dominance of China irreversible in the supply chain?

01:11:38I believe not. Absolutely not. I think the U.S. and its allies and friends,

01:11:42if we move quickly to create agile, responsive and coordinated policies, could flip the script

01:11:49and reestablish market dynamics in the global economy.

01:11:53I want to talk to you about that in more detail. So forget about what we do here, Mr. Jenkins.

01:11:58Does everybody agree China is going to continue to make a bunch of electric

01:12:02vehicles no matter what we do? Correct.

01:12:05Everybody agree with that?

01:12:07Yes, sir.

01:12:07For whatever reason, they're going to make a bunch of them.

01:12:10And it seems to me that the supply chain to make a battery,

01:12:16if we don't change our policy, is going to be so dominated by China,

01:12:20we may just have lost this entire area of our economy. Is that fair to say, Mr. David?

01:12:25Yes. Senator, I would note, and this is something that hopefully resonates with this committee.

01:12:30If we didn't have the regulations, obviously, electrification is the future.

01:12:34The U.S. is taking itself off the global stage for competition.

01:12:38For instance, on average, we're exporting 2 million vehicles a year.

01:12:42So if the U.S. isn't competing on electrification, and the rest of the world is,

01:12:46we've got a real risk.

01:12:47Well, that's what BMW is trying to do in Volvo in South Carolina.

01:12:51Can you be for EVs and against mining, Mr. Jenkins?

01:12:56Well, I think we need to source the requisite materials for the entire supply chain.

01:13:00And I note the environmental impact of that is substantially lower than mining

01:13:03billions of tons of coal or billions of tons equivalent of oil each year that we light on fire.

01:13:07Okay. That's good.

01:13:08So if you're for EVs, you need to be for mining here at home.

01:13:12Does that make – everybody agree with that?

01:13:14If you're for EVs, you need to have a robust grid.

01:13:19Do you agree with that, Ms. Gross?

01:13:21I agree with that.

01:13:22Because the demand is real.

01:13:24Mr. Jenkins, are you opposed to natural gas as being part of the future of the grid?

01:13:30Natural gas generation is going to remain a part of the grid for quite some time,

01:13:33particularly for capacity needs, so to meet peak demands.

01:13:36And so without natural gas, it'd be pretty unrealistic to meet the demand.

01:13:40That said, we're going to see a reduction in the amount of natural gas consumed by

01:13:43those power plants as we scale up American renewable energy resources that can displace

01:13:48gas burnt, if not the capacity.

01:13:50Is a baseload fuel or renewables going to get us to where we need to go without natural gas?

01:13:56Senator, we don't need a baseload fuel.

01:13:58What we need is a combination of resources that can meet all of our demands throughout

01:14:01the year.

01:14:02Renewables are great at supplying energy, but they're reliably unreliable.

01:14:05We know they're not going to be there all the time.

01:14:06So natural gas is more likely.

01:14:07And so gas power plants are dispatchable, as well as nuclear power plants, batteries,

01:14:11and other resources.

01:14:11I know I'm 18 seconds over here.

01:14:14What I want to do is just think it through.

01:14:17I'm at a car-heavy state, and they're making EVs.

01:14:20And I agree with that.

01:14:22I think the mandate is probably pushing us.

01:14:25I don't like it.

01:14:26But I think consumers are going to demand some electric vehicles.

01:14:31China is not going to change their policy.

01:14:33It seems to be a part of the future economically.

01:14:38And if we don't watch it, we're going to be out of the battery business.

01:14:41And I would just like to have a rational approach to what I think is an irreversible trend,

01:14:47that there will be more electric cars over time, not less.

01:14:50And I think it'd be a shame to not play in this space.

01:14:53For whatever reason drives you, no pun intended, I think America is going to make some real

01:14:59hard decisions quickly.

01:15:01And if we do it, we will dominate this market, no matter how big it is or how small it might

01:15:07be.

01:15:08I'd like to dominate this market for a lot of reasons, or at least be competitive.

01:15:12I met with the Chinese ambassador yesterday, and I'll close with this.

01:15:16I said, we're going to have an honest discussion about the way you produce electric cars.

01:15:21Get ready for that discussion.

01:15:24I think before I turn to Senator Merkley, there is a very significant bipartisan common

01:15:34cause towards cleaner energy, lower emissions, and taking back Chinese dominance in this

01:15:42area that they have achieved, to use Ms. Hinman's words, unfairly through mercantilistic

01:15:49interventions and cheating, essentially, in the marketplace.

01:15:55So we need to have ways to respond to that, to make sure we are not dependent on their

01:16:00supply chains for national security, economic, and climate safety reasons.

01:16:05And I think there's a big bipartisan opportunity.

01:16:07So I'm delighted that we're having this.

01:16:09And Senator Graham, I fully look forward to working with you to flesh out what those strong

01:16:14bipartisan policies look like that support our auto manufacturers and the workers who

01:16:19build these beautiful vehicles.

01:16:22Senator Merkley.

01:16:22And then here's the roster.

01:16:25Senator Merkley, Senator Braun, Senator Kaine, Senator Johnson.

01:16:29Thank you, Mr. Chairman.

01:16:30And certainly one of the reasons there's so much interest in my home state in electrics

01:16:35is because of what's happening right now.

01:16:37We have 121 fires burning in my state.

01:16:40Over 1 million acres have already burned this year.

01:16:43Two weeks ago, we had more acreage of flame than all the rest of the United States combined.

01:16:49Massive impact on all parts of our state, both with the fires and the smoke.

01:16:54We simply have to dramatically reduce the amount of methane and carbon dioxide we're

01:16:58putting into the atmosphere.

01:17:00But I'll tell you another reason it's so appealing is because of the cost differential.

01:17:05Now, Mr. Jenkins, or Dr. Jenkins, you were talking about the peak load pricing challenge.

01:17:12My local utility offers a plan where if I'm charging after 9 p.m., it's 7.4 cents per

01:17:20kilowatt hour.

01:17:22If I charge from 5 to 9 p.m., which is peak load in my area, it's 33 cents.

01:17:28So we have a little note on our dryer reminding us to turn it on after 9 p.m., but it really

01:17:35has an impact on simply turning on our charger at 9 p.m. at night.

01:17:40And at 220 volts, our car is completely charged, even if it's depleted by the next morning.

01:17:45Mr. Chairman, you were mentioning the question on whether we need a sophisticated system

01:17:50to tell the cars.

01:17:51This is a system that doesn't require anything sophisticated.

01:17:56It's just a pricing plan where people remember to turn on their electric chargers for their

01:18:02cars at night.

01:18:03And it shifts a huge part of our electric consumption in that fashion.

01:18:10Now, let's take that cost that we're paying of 7.4 cents.

01:18:15Let's round it off to 8 cents.

01:18:17We get over 4 miles per kilowatt hour.

01:18:19Basic math, it's costing us 2 cents per mile to drive our car.

01:18:26Now, we'll take our gas, and 40 miles per gallon at $4, that's 10 cents.

01:18:33So it's five times more expensive to drive a fuel-powered car.

01:18:38Why do we never hear about this?

01:18:40If it was the reverse and driving your electric car was five times more expensive than driving

01:18:46your fuel combustion car, you can bet every fossil fuel company in America would be publicizing

01:18:53that.

01:18:53Why don't we hear that it's five times cheaper to drive an electric car?

01:18:58Dr. Jenkins, do you want to comment on that?

01:19:00Well, I do think you raise a great point, Senator Merkley.

01:19:03We're at the early stages of this transition, and I think we do need a lot more advertising

01:19:06and proactive efforts to educate the public from the industry itself, from automakers

01:19:10and dealerships, and potentially from public sources as well.

01:19:15It's a significant cost differential.

01:19:17Upfront purchase prices are higher, and that's another reason why the tax credits established

01:19:20by the IRA are critical to bring down that upfront purchase price.

01:19:24If you build that into the cost of a lease, which many people are turning to to purchase

01:19:29new EVs, that is basically a $7,500 additional down payment on the vehicle.

01:19:35And that covers a large amount of the depreciation that you would normally pay for in your lease

01:19:39payments.

01:19:39And that's why the cheapest vehicles on the market right now to lease in virtually every

01:19:43category are electric vehicles.

01:19:45So it's not just cheaper when you operate it.

01:19:46It could be cheaper on a monthly payment basis as well today.

01:19:50Well, I've talked to a lot of folks who previously were intimidated by those high upfront prices,

01:19:55and they're buying used electrics.

01:19:57Now that we're this far into it, they're buying a used Tesla or a used whatever.

01:20:01And because even though the amount of range declines modestly over time, you're still

01:20:06starting with enough range.

01:20:07You have a lot of range left.

01:20:12So it's really becoming much more affordable to middle class families through both points

01:20:18that you're making about leasing and about being able to buy a used vehicle.

01:20:23I want to turn to the issue that Senator Stabenow raised about the charging stations.

01:20:28One of the things that has been interesting is how slow we've developed a national standard

01:20:34for the interface.

01:20:36We now have the North American charging standard, the NAX standard.

01:20:39Rivian's adopted it.

01:20:40Ford's adopting it or has adopted it.

01:20:44Chevy's adopting it next year.

01:20:45So, Mr. Chairman, your Chevy Bolt, your next Chevy Bolt will be able to use the NAX standard.

01:20:52And Nissan's adopting it.

01:20:55So that's starting to become a solved problem.

01:21:00But one of the ways we could rapidly expand the ability of folks who have cars currently

01:21:05is to have electric charging chargers at rest stops.

01:21:10However, national law, federal law prohibits that.

01:21:13Is that something we should change?

01:21:18Yes.

01:21:18Ms. Gross, would you like to comment on that?

01:21:22Well, we don't normally comment on policy at EPRI.

01:21:26If you don't want to comment, does anybody else want to comment?

01:21:29However, more charging stations are, you know, required.

01:21:33They're going to be necessary and they're going to be required for consumers.

01:21:36Consumers demand it.

01:21:36They're going to need it.

01:21:37Are all of the charging stations that are going to be deployed under the Inflation Reduction

01:21:41Act going to have a NAX standard?

01:21:43Does anybody know the answer to that?

01:21:46I don't believe that's required, but it's increasingly the case that all chargers are

01:21:50converging to the NAX standard going forward, and there are adapters now coming to market

01:21:53that allow interoperability.

01:21:55There's already the reverse.

01:21:56You can plug your Tesla into a CCS charge port with an adapter.

01:21:59I'm still waiting for Ford to ship me my adapter for my Mustang Mach-E, but they're sending

01:22:04them for free to all owners of existing Ford vehicles.

01:22:06So this is going to become an increasingly solved problem, as you noted.

01:22:09This is the magic dock adapter, right?

01:22:12Or just any others.

01:22:14So yeah, so you can have your own adapter you just carry with you and you're frunk.

01:22:18Okay.

01:22:19Listen, my time's up, but I just want to close with this.

01:22:23Everyone, it's five times cheaper per mile to drive an electric, and if you buy a used

01:22:28electric, you don't have to worry about the upfront high cost because the depreciation

01:22:32has been paid by somebody else, and it's a sweet deal.

01:22:37And Dr. Jenkins had to show off that he has a Mustang Mach-E after I said I only had Chevy

01:22:42Bolts.

01:22:44Senator Braun.

01:22:47Thank you, Mr. Chairman.

01:22:49The average cost of an electric vehicle is over $17,000 more than the average price of

01:22:57a gas-powered vehicle.

01:22:59So we're doing a lot that is force-feeding something in that's very expensive.

01:23:06We got other issues with it.

01:23:07It's in the context of here we're borrowing now a couple trillion dollars a year, where

01:23:14it was just a trillion dollars six months ago.

01:23:16And everything we do new, it's 100% borrowed.

01:23:20I think what I'm wondering, and I'd like to ask Dr. Jenkins, Ms. Gross, and Ms. Hinman,

01:23:28given this context, do the three of you believe that consumers should have the right to choose

01:23:36the type of vehicle that best fits their own needs, economic circumstances?

01:23:43Or do you think we ought to be orchestrating this from here when we've never even figured

01:23:49out how to spend less than we take in, and we're currently borrowing from these very

01:23:55same consumers and others around the world to the tune of $2 trillion a year currently?

01:24:04Senator, I would say that consumers do have the option to choose the vehicles that best

01:24:08suit them.

01:24:08We have a wide variety of offerings on the market today, and no requirement that anyone

01:24:12anywhere purchases an electric vehicle.

01:24:14The prices are increasingly affordable as well.

01:24:16So this is a moving target.

01:24:18Costs of batteries, which are the largest component of an electric vehicle, have fallen

01:24:22by about 50% over the last three years, and are expected to continue to decline going

01:24:26forward.

01:24:26And so that cost premium, you said it's $17,000.

01:24:29I looked right now in the compact SUVs category, like a Mustang Mach-E or Tesla Model Y, the

01:24:36gap's about $10,000 up front.

01:24:38And again, the cost of ownership is quite low.

01:24:40So the total cost of ownership is already about a parity.

01:24:43Do you know the current federal subsidy that goes into electric vehicles, what the amount

01:24:49is per vehicle?

01:24:50It's up to $7,500 for the consumer purchase.

01:24:52Do you know what that is in total that we're currently doing?

01:24:56I believe I just read it was about $125 billion.

01:24:59Would you agree that all of that's being borrowed to push that onto consumers?

01:25:07Well, CBO's estimate was that the Inflation Reduction Act was more than paid for, so I'm

01:25:11not sure I agree with that.

01:25:12I'd say that's a fake pay-for, but thank you for your opinion.

01:25:15Okay, we'll go to Ms. Gross and Ms. Hinman.

01:25:19Senator, thank you for that question.

01:25:21I'll just add, without commenting too much on the policy, I'll just add that consumers

01:25:26are choosing these vehicles.

01:25:27Senator Merkley talked about the energy wallet, the fact that you can feel it in your pocketbook

01:25:32when you don't have to go to the gas station, and the cost of electricity is so much less

01:25:36when you're charging an electric vehicle.

01:25:38I'll also say that truck drivers, data out there shows that truck drivers actually like

01:25:42driving electric vehicles, because you don't experience that fatigue that you have with

01:25:45the rumble and the roar of a combustion engine vehicle.

01:25:49So this issue of fatigue is also a safety issue.

01:25:51So we're starting to see, you know, there are reasons to want to drive an electric vehicle

01:25:57based on data that's out there that are really extremely compelling for automakers and truck

01:26:03drivers out there, manufacturers.

01:26:05Ms. Hinman.

01:26:06Yeah, thank you so much, Senator.

01:26:08I think it's a little bit of an uncomfortable conversation to have about the fact that we've

01:26:14got a very large predatory market who is influencing prices up and down the value chain in ways

01:26:20that Americans just can't simply compete with.

01:26:23And to me, this sense of sort of how much we're spending is really hard to sort of square

01:26:28against the massive amount of spend and predatory nature that occurs from the Chinese Communist

01:26:35Party.

01:26:36You know, in a perfect world, this would be a pure, you know, a global market, right?

01:26:40And we wouldn't feel the need to have to subsidize in the way that we do.

01:26:44I do think there's scope for new tools, particularly trade policy tools and environmental policy

01:26:49tools at the border.

01:26:50But certainly, you know, I think some of these distortions, we have to kind of appreciate

01:26:55its source, which is not coming from Americans, but it's coming from an adversary overseas.

01:26:59Thank you.

01:27:00And I've got one more question, but I'd like to also tell you that it was about nine months

01:27:04ago, and I was holding up a letter from 4,000 dealers that said, please, don't send us any

01:27:14more EVs.

01:27:15And I'm for the cleanest, least expensive, and like the idea that it's out there as a

01:27:21choice.

01:27:22But 4,000 dealers said they are choking on them.

01:27:26It's even hurt their own enterprises to have to tie it up because they're not moving at

01:27:31the speed at which the government would like to see it, even when they're offering 7,500

01:27:37bucks a pop.

01:27:39I've got one more question, and I'd like a yes or no answer on the part of all of you.

01:27:46I'm for whatever's going to be the cleanest, least expensive fuel in the long run, and

01:27:51even how that impacts electric generation, transportation, the whole gamut.

01:27:56There's been a very robust discussion in the Senate Climate Caucus on that, which I

01:28:02was part of that.

01:28:04We still have great conversations, but a lot of it says that so much of this is going to

01:28:10be due to technological breakthroughs in the future, and as much as we'd like to see those

01:28:15results in the present, we either can't afford it, just doesn't make sense to do it.

01:28:20Now, as it relates to electric vehicles, to all witnesses, does the U.S.

01:28:26currently have the grid capacity to sustain a growing domestic vehicle fleet that is being

01:28:34mandated on consumers by policies from the Biden administration?

01:28:39In respecting time, just give me a yes or no.

01:28:44Dr. Jenkins.

01:28:44We can expand the grid at a pace that's sufficient to accommodate all of those EVs, as we have

01:28:49in the past.

01:28:49This is not an unprecedented challenge.

01:28:51It's one that American utilities can easily meet.

01:28:55With planning and investment, the pace can be met and the grid can be ready.

01:29:00Yes.

01:29:02We can meet the demands today, and we need to plan for the future, absolutely.

01:29:07Yes, if you start today and anticipate where the EV demand will be 10 years from now, you

01:29:11can get there.

01:29:13Thank you so much.

01:29:14Mr. Chairman, can I correct the record on one of the statements I just made?

01:29:16The total tax outlays this year, according to Treasury, are $1 billion for the EV subsidies

01:29:21to date, so that's through the first half of this year.

01:29:25I think I misspoke by several orders of magnitude, so I apologize about that.

01:29:29Thank you, Dr. Jenkins.

01:29:31Senator Kaine.

01:29:32Thank you, Mr. Chair.

01:29:34I love walking in and seeing the title of the hearing, bipartisan Senate Budget Committee

01:29:40hearing, and I appreciate that this has been a hearing and a discussion with witnesses

01:29:44who are really trying to explore an opportunity that has a real upside, that is going to need

01:29:49some planning and investment.

01:29:51In Virginia, there's 100,000 electric vehicles on the road, in my commonwealth of eight-plus

01:29:56million people, and those who charge at their home pay about a dollar a gallon.

01:30:03That's what folks in Virginia are paying if they charge at their home.

01:30:09We need to have some advances in charging in Richmond, where I live.

01:30:12A lot of people don't have driveways, apartments, or multifamily communities, so more curbside,

01:30:19rest area.

01:30:21We need to make sure in the deployment of charging technologies, we're not just looking

01:30:25at passenger vehicles, but we're also looking at trucks.

01:30:30Every Volvo Mack truck that you see on the road in North America is made in Dublin, Virginia,

01:30:36which is in Appalachia, about 3,000 workers there.

01:30:39In the last 10 days, the DOE announced a $208 million investment through the Inflation Reduction

01:30:46Act to match an equivalent investment by the company to expand electric vehicle production.

01:30:53I would encourage, if anybody ever wants to do something fun, come with me to Dublin

01:30:58and drive an over-the-road Volvo Mack truck on their test track.

01:31:02It's about a three-mile test track.

01:31:05You'll get in that vehicle, and it's so smooth, you think you're going 35, and I looked down

01:31:09at the speedometer, I was going 65.

01:31:12The point about fatigue was remarkable.

01:31:15A diesel truck just has this kind of low-grade rattle that really takes a toll on over-the-road

01:31:20drivers if they're in that truck for multiple hours a day, whereas the electric vehicle

01:31:26is as smooth as can be, and so it is going to be a kind of a fatigue health improvement

01:31:31for those who are doing this job.

01:31:32It's hard to recruit enough over-the-road drivers now.

01:31:35I think this is a technology that might make it a little bit easier.

01:31:38But in addition to the $208 million investment into the Volvo plant through the IRA, there's

01:31:45also been the announcement in the last year of a $100 million investment through DOE to

01:31:50a company called Microporous, a company that will manufacture separators for lithium-ion

01:31:55batteries that are necessary for the EV supply chain, and that is likely to land in rural

01:32:01Southside Virginia near Danville.

01:32:04Both Dublin, Virginia and Danville, Virginia are in economically hard-hit parts of the

01:32:09state.

01:32:09They're both in rural Virginia.

01:32:11Talk a little bit about how the growth of an EV supply chain could be a powerful economic

01:32:17development tool for rural America.

01:32:20Thanks, Senator.

01:32:21I mean, look, my father's from Youngstown, Ohio.

01:32:23I grew up in Oregon in the shadow of the timber industry and forest products industry that

01:32:27had decayed during my childhood.

01:32:30I've been hearing, you know, politicians talking about bringing manufacturing jobs

01:32:33back to America literally my entire life, right?

01:32:36And we're finally doing it, right?

01:32:37We're seeing those investments now across, you know, EVs, clean energy, batteries, semiconductors,

01:32:44et cetera.

01:32:45So we're already seeing over $140 billion of announced investment in battery manufacturing

01:32:49and supply chain capacity across the country and $57 billion in EV manufacturing.

01:32:54That's since the infrastructure law passed.

01:32:57That could support over 240,000 jobs.

01:33:00We all know these are more than just the direct employment, right?

01:33:03These are anchor employers in these industries or in these communities.

01:33:08The vast majority of those are located in rural and ex-urban communities or communities

01:33:12that are designated as energy communities by the Inflation Reduction Act.

01:33:15So these are exactly the communities that are seeing a renewed economic future.

01:33:19Say that last piece again.

01:33:20Yeah.

01:33:20So the vast majority are in rural and ex-urban areas and the energy communities that have

01:33:25traditionally relied on fossil fuel extraction, processing, or transportation that were designated

01:33:29by the IRA.

01:33:31This is a hearing about electric vehicles.

01:33:32But the same week that the announcement was made about DOE supporting the manufacture

01:33:38of electric over-the-road vehicles in Dublin, there was also an IRA-driven announcement

01:33:43of $100 million to a facility that is opening up in Chesapeake, Virginia, which is in the

01:33:48Hampton Roads area, metropolitan area.

01:33:50But it's going to manufacture in the United States for the first time the cables that

01:33:55connect to offshore wind and put the power into the grid.

01:33:59All of this has been manufactured overseas because we didn't have an offshore wind industry.

01:34:04Now, because of the IRA, we will be manufacturing those cables, and not just for use in U.S.

01:34:09offshore wind.

01:34:10Those cables, and the company is a Korean company that's investing in Virginia, will

01:34:14be manufactured in the United States and then sold to offshore wind development all over

01:34:19the United States.

01:34:20Just another example of an IRA success story.

01:34:23Okay.

01:34:23Now, here's a personal story that's embarrassing.

01:34:26I got stuck in my car for 27 hours in January of 22, driving from Richmond to D.C.

01:34:33And it was 18 degrees when the sun was up.

01:34:37It was colder overnight.

01:34:40And it was a freak snowstorm, and the signs on the highway said proceed with caution.

01:34:44They didn't say turn around, go home.

01:34:46They said proceed with caution.

01:34:48I proceeded with caution, and I was stuck for 27 hours.

01:34:50My senior senator, Mark Warner, said I would have gotten SEAL Team 6 to come out and get

01:34:54me.

01:34:55You sat there with a Dr. Pepper and an orange for 27 hours.

01:34:59There was a lot of concern about what would happen to electric vehicles.

01:35:02I had, in a gas vehicle, I had to, you know, run the engine for 10 minutes with the heat

01:35:07of full blast, turn it off until the car got too cold an hour later, and do it again to

01:35:12try to take my half tank of gas and make it work.

01:35:16And there was a lot of questions about what would happen to electric vehicles that night.

01:35:19And I've never introduced into the Senate record an article from Kelly Blue Book, but

01:35:24I just thought there's a first time for everything.

01:35:27Kelly Blue Book did a study.

01:35:29They reached out to people who had been stuck in that snowstorm who were driving Teslas

01:35:33or other electric vehicles, and they found out that they actually performed better than

01:35:38gas vehicles, and that the way electric vehicle engines work, you can operate just a small

01:35:44portion of the engine that runs the heater.

01:35:46You don't have to have the engine running for the whole car.

01:35:48It does drain the, you know, the reserve, but very slowly.

01:35:53When finally the traffic started to move, it was blocked by the fact that so many vehicles

01:35:58had run out of gas that even trying to move on the ice-driven roads, you were kind of

01:36:03like a Jenga game.

01:36:04You're kind of moving here, there, and everywhere to kind of get around them.

01:36:08But it turned out that the electric vehicles performed quite well in those adverse conditions.

01:36:12And so, Mr. Chair, if I could, let me introduce this article from Kelly Blue Book, I-95 Traffic

01:36:18Nightmare, What If You Were Stuck in an Electric Car for 24 Hours?

01:36:22Into the Record.

01:36:24Without objection, it shall be entered into the record.

01:36:27I yield back.

01:36:28And we turn now to Senator Johnson, who will be followed by Senator Van Hollen.

01:36:35So to prove my environmental bona fides here, I have a, my wife has a hybrid SUV, pretty

01:36:40good-sized one, and we've actually had it up over 30 miles per gallon.

01:36:45That's when she plugs it in every now and again, she doesn't, so I think we're down

01:36:48to about 28 right now.

01:36:49So we watch that, okay?

01:36:51Now, I've always wondered, and it's interesting, Senator Kaine, you mentioned a dollar a gallon.

01:36:55Is that a, I don't know, I've never heard, really, what does it cost?

01:36:59Is that, is that about right, that it's an equivalent of about a dollar a gallon per

01:37:04gas to charge an EV versus what it costs on the, for a gallon of gas, whoever's got the

01:37:10information?

01:37:11Yeah, Senator, I think that's fair.

01:37:12Obviously, it's gonna base largely on the utility rates, but I think the working numbers

01:37:18anywhere from, you know, two-thirds less costly compared to a gallon equivalent, so whether

01:37:24it's $1 or $1.50.

01:37:25Well, I'd say it's about a third of the cost.

01:37:27Again, that's pretty attractive, okay?

01:37:30You've got the smooth ride.

01:37:32You've got fast acceleration.

01:37:34There's a lot of benefits, okay, as well as, and the fact if you're just using a hybrid

01:37:38like my wife does, driving around town, never even has to use gas.

01:37:42So, I'm not opposed.

01:37:45But my question is, if they've got so many market appeals, why do we need government

01:37:51subsidies?

01:37:55Take it up.

01:37:56I would say you don't.

01:37:58We should end them.

01:37:59Mr. Schweder.

01:38:01Sure, Senator.

01:38:01Obviously, you're talking about affordability, generally.

01:38:05Excuse me.

01:38:06Obviously, when it comes to the record number of products, it's both the industrial policy

01:38:11as well as, you know, the marketplace dynamics.

01:38:13We mess up when we, you know, government doesn't do very well.

01:38:17For example, we spent $7.5 billion to do charging stations.

01:38:21After more than two years, we've got seven of them.

01:38:25You know, testimony was talking about we've run, we've basically run the highway trust

01:38:29fund into insolvency, and we haven't really fixed that.

01:38:33You know, why is China producing all these electric vehicles?

01:38:36For its own home market?

01:38:39It's for central planning, industrial engineering in other countries, correct?

01:38:46Is there any major western country that doesn't subsidize EVs because of climate alarmism?

01:38:55How many U.S. automakers are making money producing EVs?

01:39:00Senator, as I said in my remarks, we're in the early innings.

01:39:02This is a marathon, not a sprint.

01:39:04So yes, costs are going to have to come down.

01:39:06How much are they losing on average?

01:39:08Depends on the manufacturer and their product cycle.

01:39:10So why are they doing it?

01:39:12Because they're getting government subsidies, right?

01:39:15The consumers are being subsidized, and the automakers are also being subsidized, correct?

01:39:19And the mandate we're talking about are things like CAFE standards that coerce them to offer

01:39:25EVs so they can produce vehicles that American consumers do want.

01:39:29I mean, I'd never go to 100% EV.

01:39:31Happy to do the hybrid.

01:39:32Happy to be environmental.

01:39:34I want the comfort of having an internal combustion engine.

01:39:40Yeah, Senator, as it relates to the recent auto standards, we've been pretty clear with

01:39:45the Biden administration.

01:39:46Obviously, we need to ensure that there's alignment as it relates to where the market

01:39:50is, as well as encouraging—

01:39:51There won't be alignment where the market is.

01:39:53Government's not that smart.

01:39:56I mean, honestly, $7.5 billion.

01:39:59We have seven charging stations.

01:40:00We've run the Highway Trust Fund back 2008 in solvent.

01:40:04We haven't fixed that problem.

01:40:06And we're going to have this command economy, and we're going to plan for a growth in the

01:40:10electrical grid.

01:40:10By the way, we don't have the mining capacity.

01:40:14I would argue we really don't have the electrical capacity.

01:40:17Those climate alarmists are generally opposed to nuclear, which certainly would be part

01:40:22of the problem.

01:40:23China dominates the battery industry, and our subsidies are providing a market for China's

01:40:29command economy.

01:40:31How does any of this make sense?

01:40:33Senator, just with respect, our subsidies are targeted to U.S. manufacturing of batteries

01:40:39through 45X, and the consumer EV tax credits are specifically designed to excise China

01:40:43from the supply chain.

01:40:44How many consumers have experienced the cost of replacing a battery in an EV?

01:40:48It's an extremely rare occurrence.

01:40:49What percent?

01:40:50It's an extremely rare occurrence.

01:40:52They don't last forever, do they?

01:40:53How long do they last?

01:40:54Neither does an internal combustion engine car or transmission.

01:40:58There are cars on the road from the 30s and 40s and 50s.

01:41:02How long is an EV battery going to last, and what is the cost to replace it?

01:41:06EV batteries account for anywhere from 30 to 40 percent of the upfront costs.

01:41:10Obviously, there's warranty and durability built into those batteries, but yes.

01:41:13How long do they last?

01:41:16The battery itself can last quite some time, and then, of course, it can be repurposed

01:41:20and reused.

01:41:21A couple hundred thousand miles, at least.

01:41:23We have Teslas on the road with that many miles already.

01:41:25And it's going to cost $10,000, $20,000 to replace?

01:41:28Well, that's the cost today.

01:41:30What about recycling of them?

01:41:31What about recycling of wind turbines?

01:41:34I'm seeing these pictures of these massive dumps of these wind turbines just collapsing.

01:41:39And again, it doesn't make economic sense because government is trying to essentially

01:41:45plan, and government's awful at it.

01:41:48I just wanted to pipe in, if I could, sir, on battery recycling.

01:41:52Batteries are eminently recyclable and are near a closed loop.

01:41:56Not these, not the lithium batteries.

01:41:57We don't have capacity for doing it right now.

01:41:59Well, actually, we're building that capacity.

01:42:02We are building that capacity, and certainly, the U.S. is a leader in the standards.

01:42:05Kind of like Senator Brown was talking about.

01:42:07Yeah, we have to rely on all these technological innovations we don't have yet.

01:42:11And let's face it, they've been trying to innovate batteries for decades and really

01:42:14haven't been able to do it, have they?

01:42:16I'm not sure I would agree with that.

01:42:18The costs have fallen dramatically.

01:42:19The density has doubled in the last nine years or seven years.

01:42:23So battery innovation is dramatic.

01:42:26So let the marketplace dictate the speed of this innovation.

01:42:30Stop subsidizing this.

01:42:31That's my only point.

01:42:32Again, I'm not opposed to it, but I'm opposed to government intervention in the marketplace.

01:42:36We just screw things up.

01:42:37And as Senator Brown said, we can't afford it.

01:42:40$35 trillion in debt.

01:42:42We just can't afford all this stuff.

01:42:44Thank you, Mr. Chairman.

01:42:44Senator Van Haal.

01:42:46Thank you, Mr. Chairman.

01:42:47Thank all of you for your testimony.

01:42:49I just make a couple points at the outset.

01:42:51When you have a huge, what economists call externality, which is climate change, I know

01:42:58some of my colleagues don't really believe in that as a threat.

01:43:04But that is exactly where you want government action.

01:43:06And I also heard Senator Graham at the outset talk about how China will potentially, and

01:43:12is right now, on a road, if we don't do something about it, to eat our lunch.

01:43:16I mean, the reality is countries around the world, consumers around the world, are going

01:43:20to be purchasing electric vehicles.

01:43:22And either we're at the top of our game, or we're going to be left dramatically behind.

01:43:28So that's why I'm pleased that Maryland is one of the states that has set very ambitious

01:43:33goals in terms of EVs, target for 300,000 by 2025.

01:43:39And we're one of 15 states that have committed to ramp up the electrification of medium and

01:43:44heavy duty trucks, so that all sales of those vehicles are zero emission by 2050.

01:43:52There's been lots of evidence of the health benefits of this.

01:43:57The Rocky Mountain Institute estimates that among the 15 states that, along with Maryland,

01:44:03are participating in this effort, they will see fewer premature deaths, 477 fewer premature

01:44:11deaths, and over 6,000 fewer asthma incidents per year.

01:44:16And that's 3.5 billion a year.

01:44:18And that's on top of the climate benefits.

01:44:21I think it's important to point out to my colleagues that while heavy duty trucks and

01:44:27medium trucks account for only 10 percent of vehicles on the road, they produce about

01:44:31a quarter of the overall greenhouse gas emissions.

01:44:35So one of the challenges that Volvo, which is a company in Hagerstown, Maryland, is facing,

01:44:44and they develop the powertrain manufacturing, the powertrains, they have a facility there.

01:44:50One of the issues they have there is the issue of charging infrastructure for medium and

01:44:57heavy duty trucks.

01:44:59Ms. Gross, could you briefly describe some of the challenges we're facing in this particular

01:45:05sector and what we should be doing about it?

01:45:08Thank you, Senator, for that question.

01:45:10Let me focus on the solutions first, and then I'll go to maybe recap on some of the challenges.

01:45:15The most important thing that we can do in the sector for heavy duty, medium duty sector

01:45:22is to get pilot programs out there.

01:45:23It is amazing what fleet operators learn by just purchasing and putting into their

01:45:29fleet the first one, two trucks, understanding what the relationship has to be with the utility,

01:45:35understanding what charging is, how it works, what it means to discuss rates and off peak

01:45:40times and on peak times, and what the economic opportunities are to actually work with utility

01:45:45on those rates.

01:45:46So the fleet, this idea that we need to continue pilot programs is really alive.

01:45:50It's not the ones that have already started, but every fleet in the country should start

01:45:55to understand what it would mean to actually have that experience behind you.

01:45:59Once you have that experience, you make better decisions about right sizing charging and

01:46:02right sizing the grid requirements for it.

01:46:05We need to prioritize feeders.

01:46:08Where are these truckloads likely to show up?

01:46:10So we've got the E road map out there that describes and shows you visually where the

01:46:16loads are expected to come from.

01:46:17We've got Volvo data, Daimler truck data.

01:46:20We have the telemetry.

01:46:21We know where the diesel vehicles travel throughout the country.

01:46:24So being able to prioritize where they are today and where they're likely to be when

01:46:27they're electric is super important for prioritizing these investments on the grid.

01:46:31And then finally, one interesting thing is we are kind of going about this piecemeal

01:46:36today.

01:46:38This holds true for light duty vehicles as well.

01:46:39But on the medium and heavy duty trucking sector where these loads can be very concentrated

01:46:44on local distribution systems, we wait, you know, the utility industry can really only

01:46:49invest once a customer shows up and says, hey, I've got this load coming.

01:46:54Can you please, you know, upgrade the grid for me?

01:46:57I'm coming with this charging load.

01:46:59If we would step back and consider, you know, in its totality, how much load is coming when

01:47:05more fleets, 20%, 40%, 80%, we could do a better job up front, more cost effective job

01:47:11of putting these solutions in place.

01:47:13Almost I would encourage everyone to focus on sort of those big nuances about the trucking

01:47:18sector that are important.

01:47:19And this whole timing mismatch, I know that that's on top of mind for Volvo as well.

01:47:24The timing mismatch between the time it takes to get grid power to a site versus the time

01:47:28it takes to order a few semi trucks.

01:47:30And I said in my testimony earlier, I can order a fleet of semi electric trucks and

01:47:36they can be delivered in four to six months and the grid upgrades probably can't be made

01:47:40in those same four to six months.

01:47:41We've got to get ahead of this challenge.

01:47:43So this is the issue.

01:47:44I mean, Volvo is actually losing orders right now from people that want to, you know, purchase

01:47:50these electric medium heavy duty trucks but can't because of this issue of charging stations.

01:47:57So I hope we will on a relatively urgent basis move forward.

01:48:02I mean, this is the sort of chicken and the egg problem we've seen in other parts of this

01:48:06sector.

01:48:07I may have some questions to submit for the record, but I see my time is out.

01:48:11Thank you, Mr. Chairman.

01:48:13Senator Van Hollen, Senator Graham and I spoke earlier about trying to pull together some

01:48:18bipartisan technical recommendations for facilitating the transition in a whole variety of ways,

01:48:24things like supporting peak shaving.

01:48:26And this would be another good example.

01:48:28So I look forward to working with you on that.

01:48:30Thank you very much for your interest.

01:48:31And now we turn to Senator Kennedy.

01:48:36Thank you, Mr. Chairman.

01:48:39Welcome to our witnesses.

01:48:42I'm sorry I was late.

01:48:43I was in another committee.

01:48:49How many of you drive an electric car, own an electric car?

01:48:53Okay.

01:48:54You gentlemen don't?

01:48:56If you mean electric by a battery electric, no.

01:48:59If you mean plug-in electric, yes.

01:49:01Okay.

01:49:02Of the three folks who raised their hands, do you own gasoline powered cars at all?

01:49:10No.

01:49:10No, Senator.

01:49:11No, no.

01:49:12All electric, okay.

01:49:18Let me ask you all this, and please give me brief answers because there are five of you

01:49:22and there's only one of me.

01:49:24Okay.

01:49:25If electric cars are so swell, how come we have to pay people to drive them?

01:49:32The up-front costs of an electric vehicle are about $10,000 higher today than they are

01:49:37for an equivalent internal combustion engine vehicle today, but that cost is declining

01:49:41substantially.

01:49:42And so this is a temporary intervention to help the auto industry strategically compete

01:49:47in global markets and to transition as battery costs fall.

01:49:49You didn't hear my admonition.

01:49:50Okay.

01:49:51Sorry.

01:49:51Doc, if electric vehicles are so swell, how come we have to pay people to drive them?

01:49:59I think I'll, sorry, Senator, I'll, I'll stay.

01:50:04I'm sorry.

01:50:05I can't see the names.

01:50:06Oh, I'm, it's gross.

01:50:08Ms. Gross here.

01:50:10I'll defer to not comment on policy questions about incentives and so on.

01:50:15I can't see your name tag.

01:50:19Gross.

01:50:23I can.

01:50:24Oh, okay.

01:50:24I'm sorry.

01:50:25I can swivel it.

01:50:26I apologize.

01:50:27Would you start over?

01:50:30I was just going to say, I'd like to defer on policy grounds, not to talk about policy

01:50:36incentives and so on, defer over to my colleague here, Ms. Hinman.

01:50:39You don't believe in electric cars?

01:50:41Oh, totally, totally support electric vehicles and drive three of them myself.

01:50:45So, so if they're so swell, how come we're having to pay people to drive them?

01:50:50So just speaking, so just speaking personally, then not representing my company at this point.

01:50:55Sure.

01:50:55Speaking personally.

01:50:56Who's your company?

01:50:57EPRI, the Electric Power Research Institute.

01:50:59Oh, okay.

01:51:00And I have to be careful about policy stepping into,

01:51:02wading too deeply into policy as an independent leader here.

01:51:06But when I, when we think about, again, I just want to ditto what Dr. Jenkins said.

01:51:12This is an effort to compete globally.

01:51:14I know all that, but, but how, if they're so swell, how come we have to pay people to drive them?

01:51:20Well, maybe then the quick answer for me is I didn't take advantage of incentives,

01:51:24but I also bought used vehicles on the market.

01:51:26I love it.

01:51:27They're wonderful to drive.

01:51:29Okay.

01:51:32Senator, similar for myself.

01:51:34What's your name?

01:51:35Maureen Hinman.

01:51:39My hair's longer in my picture.

01:51:41Sorry.

01:51:41I'm sorry.

01:51:42I don't even know who I'm talking to.

01:51:44Go ahead, Ms. Hinman.

01:51:45I did, I did want to follow up with my colleague, Ms. Gross.

01:51:49I purchased my first EV.

01:51:52Yes, ma'am.

01:51:52But, but if they're so swell, how come we have to pay people to drive?

01:51:56I purchased, I can only speak for myself, but we purchased our first vehicle in 2015

01:52:01because it was easier to charge, cheaper to drive.

01:52:04It drives better, faster, smoother.

01:52:07There's no muck on the bottom of our garage.

01:52:10And frankly, when I had my first child, some of the safety features were just better.

01:52:14But here's one, I'm sorry, you're not answering my question.

01:52:18How many vehicles, how many cars do we have in the United States?

01:52:23280.

01:52:23This lady right here.

01:52:25In the middle.

01:52:26I'm sorry.

01:52:27If I could see your name, I wouldn't just point to you.

01:52:30I, I, if I could, I'd like to defer to my colleague who has a better.

01:52:33Well, I'd like to hear your answer.

01:52:34Okay.

01:52:35How many calls?

01:52:35295 million.

01:52:38Okay.

01:52:38And what percentage are electric vehicles?

01:52:411.6.

01:52:42Okay.

01:52:43Hold up that chart.

01:52:44Here's, here's where all the electric vehicles are.

01:52:46California loves them.

01:52:50The West Coast loves them.

01:52:53Everybody else is kind of lukewarm.

01:52:56Okay.

01:52:56I'm trying to understand why.

01:53:00But let me move on to this.

01:53:01Let me ask these, these two gentlemen.

01:53:02I think the reason is, is because they're more expensive.

01:53:06And people, people don't, people when they drive a car like it to run.

01:53:10And when it runs out of electricity, it stops.

01:53:12And they can't find a place to charge.

01:53:15So let me ask these two gentlemen.

01:53:17I don't want to be unfair.

01:53:20So it's clear, we got a long way to go.

01:53:23We got 283 million cars in America.

01:53:29And we got 3.3 million electric vehicles.

01:53:34We got a long way to go.

01:53:36And at least these three folks think that, that we need to, to,

01:53:43to take taxpayer money and give enough money to American people.

01:53:47So they'll walk away from gas cars and drive electric vehicles.

01:53:52How much is that going to cost?

01:53:54I'm going to ask him in a second if I have time.

01:53:57But how much do you think it will cost for us to basically

01:54:05bribe every American to drive an electric car?

01:54:10Well, Senator, excuse me, Dave Sweet with the Alliance for Automotive Innovation.

01:54:15I would just underscore your original question with this.

01:54:18There's really two things at play as it relates to what's happening.

01:54:20How much money do you think it'll cost to bribe the American people enough

01:54:26to make them drive electric cars, to move that, those numbers?

01:54:32Electrification's increasing as it relates to cost.

01:54:35Only a fraction of currently eligible vehicles are eligible for the federal tax credit, so.

01:54:39How much do you think it'll cost, David?

01:54:41Senator, I think I quoted earlier that.

01:54:43I'm calling on you, sir.

01:54:44How much do you think it'll cost?

01:54:48It ultimately depends on consumer adoption.

01:54:50We don't have an exact figure.

01:54:52You think, well, just keep throwing money at it until we hit the jackpot.

01:54:57How about you, Mr. Davis?

01:55:01Eventually, if you put enough charging stations that will solve for range anxiety,

01:55:05because the reason I didn't buy one is because I may have to drive 450 miles to East Tennessee.

01:55:09How much do you think it'll cost the American taxpayer for us to convince the American people,

01:55:16frankly, bribe the American people to get rid of the gas car and drive an electric car?

01:55:23Can any of you give me a figure?

01:55:25Senator, the Treasury Department reports he's spent about a billion dollars a year to date,

01:55:28so for the first half of this year, so roughly $2 billion this year.

01:55:32How much do you think it'll cost, doctor?

01:55:34You're a doctor, right?

01:55:35So $2 billion this year is what they estimate from the Treasury Department.

01:55:38How much do you think it will cost for us to, let's say, get 75% of these 200 million?

01:55:45How much will it cost American consumers to remain?

01:55:48Do you know how much it'll cost, doctor?

01:55:50No one knows the future with certainty, Senator.

01:55:52Right. You just think we ought to keep throwing money at it until we hit the jackpot.

01:55:56I think we ought to set a stable policy framework that allows American consumers

01:55:59to become familiar with the environment and American businesses to innovate

01:56:03and to compete within that stable framework. That's what I said earlier in my testimony.

01:56:05And how much will that cost?

01:56:08Will cost less than the benefits delivered by the policy.

01:56:09You don't care how much it costs, do you?

01:56:11I care if the benefits exceed the costs. I don't care about the costs.

01:56:13You don't care how much it costs, do you?

01:56:15I care very much how much it costs. As long as the benefits exceed the costs,

01:56:18that's an investment worth making.

01:56:20Well, okay.

01:56:21How much does it cost to seed the industries of the future to China?

01:56:23I get to ask the questions, doc. You're at Princeton, right?

01:56:27That's correct.

01:56:28Yeah. How are Jewish students doing at Princeton? Are they feeling better?

01:56:31That has nothing to do with the hearing today. I'm not going to comment on that.

01:56:34I didn't think you'd want to talk about that.

01:56:37Do any of you have any idea how much it would cost?

01:56:41Senator?

01:56:41To get, say, 75% of the American people driving electric cars.

01:56:46Senator, if I could, your question is fair.

01:56:48One answer to it is the cost of inaction of the U.S. not competing

01:56:52is far greater than any incentive on the front end.

01:56:54Okay. Quantify that for me.

01:56:56Oh, man. I'm way over. I'm sorry, Sheldon.

01:56:58Quantify that for me.

01:56:59Because here's my problem.

01:57:00Why don't you wrap up with this?

01:57:01Because I think everybody's had a chance to try to answer your question.

01:57:05I will.

01:57:05Here's my problem.

01:57:06Okay. We all want clean air.

01:57:08We all want bright water.

01:57:10We all want to eat.

01:57:11And we all want to live indoors.

01:57:14Okay.

01:57:16But there are trade-offs in all of this.

01:57:20Despite what the Princeton professor thinks,

01:57:24we don't have unlimited money.

01:57:26This is not Princeton.

01:57:29So we have to decide the cost and the benefits.

01:57:34And nobody seems to be able to quantify the costs.

01:57:38They just say, keep throwing money at it.

01:57:41Throwing money at it.

01:57:42And nobody can really quantify the benefits,

01:57:44except if we don't do it, then we're all going to die.

01:57:51And when I go back to my people and say,

01:57:53your electricity costs have gone up 30 percent,

01:57:56but it's for a good cause.

01:57:57Why, Kennedy?

01:57:58Because you're going to die if we don't do it.

01:58:01Why, Kennedy?

01:58:02Because a professor at Princeton says so.

01:58:05That doesn't work for most Americans.

01:58:09Can you answer that for me?

01:58:11You see my frustration.

01:58:12I love driving an electric car.

01:58:14I think they're really cool.

01:58:17But the median household income in my state is $55,000.

01:58:22Our Princeton professor probably makes that in a week.

01:58:26Okay.

01:58:27They don't care what they think at Princeton.

01:58:31Can you answer that for me, guys?

01:58:34I can't answer how much it's going to cost.

01:58:36Good.

01:58:36But I can tell you that just last year alone,

01:58:41China in the EV market subsidized it by $12.4 billion.

01:58:46And that's their annual spend.

01:58:48It's more than, even in our best year,

01:58:50it's more than two-thirds of the United States spends.

01:58:52But let me ask you a question.

01:58:54How much will it cost China to become carbon neutral by 2050?

01:59:01I am very concerned.

01:59:02They won't.

01:59:03But I'm more concerned about the risk to the U.S.

01:59:06economy of losing the auto manufacturing industry.

01:59:10Do you know?

01:59:12See, nobody talks about the cost.

01:59:14I'll tell you how much it'll cost them.

01:59:16It'll cost them a trillion dollars a year starting today

01:59:21to be carbon neutral by 2050.

01:59:24You know how much it'll cost Russia?

01:59:27$250 billion a year.

01:59:30Three times what their defense budget.

01:59:33Now, if you believe that Vladimir Putin

01:59:37is going to spend $250 billion for climate change,

01:59:43then you'll never own your own home.

01:59:46So we go spend all this money,

01:59:48which y'all can't quantify.

01:59:49We just keep spending.

01:59:51They don't spend the money.

01:59:54They're at an advantage.

01:59:56And you know how much world temperatures are lowered?

01:59:59None.

02:00:01None.

02:00:02Zero, zilch, nada.

02:00:04And I can't believe our chairman hadn't cut me off.

02:00:08But I am done.

02:00:09Now's your moment.

02:00:12For your enthusiastic participation in this hearing.

02:00:15I just wish we had time to talk about all this.

02:00:17I think this is fascinating.

02:00:20With a couple of clarifications.

02:00:23First of all, the word mandate has come up repeatedly

02:00:27during this hearing.

02:00:28And I just want to make sure everybody understands

02:00:29there is no mandate.

02:00:31What there is is a tax incentive.

02:00:34And for those of us who believe in traditional economic policy,

02:00:39what the tax incentive is there to do

02:00:42is to offset the negative externality

02:00:45of all of the pollution that comes out

02:00:47of an internal combustion engine

02:00:50that society at large pays for

02:00:52but is not baked into the price of the vehicle.

02:00:55And you can go all the way to Milton Friedman

02:00:57to get the economic theory that supports that.

02:01:01Second, EVs have been more expensive

02:01:06than internal combustion engines

02:01:08largely because of a market decision

02:01:10by the electronic vehicle innovators

02:01:13to come in at the high end of the market.

02:01:17Because Tesla, for instance, could compete

02:01:19with Maserati and Lamborghini on performance.

02:01:23And so, of course, they came in at the high end of the market,

02:01:27particularly when you're starting

02:01:28with small initial manufacturing runs.

02:01:31But as the market has grown,

02:01:34costs are now coming down to where it's maybe $1,000, $2,000

02:01:38difference between the average EV cost

02:01:40and the average internal combustion engine cost,

02:01:43just around $50,000 in each case.

02:01:48There are available electronic vehicles

02:01:52that are less expensive

02:01:53than the average internal combustion engine now.

02:01:56So depending on what you want to choose,

02:01:58if you want to go and compete with Maseratis,

02:02:00you can go to the high end.

02:02:01But there are also cheaper

02:02:04than average internal combustion electric vehicle options.

02:02:10And the last thing I'll point out

02:02:13is that while the EVs are cheaper

02:02:16is that while tire emissions are obviously real,

02:02:22and tire emissions are greater from an electric vehicle

02:02:26than internal combustion vehicle

02:02:27because the electric vehicle is A,

02:02:30heavier because of the battery,

02:02:32and B, higher performance because it's higher performance.

02:02:35So you have more tire wear,

02:02:36and that creates some additional measure

02:02:39of tire wear-related pollution.

02:02:41And to complain about that

02:02:46in the context of tailpipe pollution

02:02:48and tailpipe emissions

02:02:50calls to mind the old biblical verse

02:02:52about the moat in your own eye,

02:02:57or the moat in your brother's eye

02:02:58compared to the beam in your own eye.

02:03:02The beam here is tailpipe emissions

02:03:07which pollute enormously

02:03:10and create massive climate risk.

02:03:12And I agree that tire emissions need to be dealt with,

02:03:15but if you put them to scale

02:03:18and compare their hazard for humankind

02:03:21and for local health,

02:03:23it's moat versus beam.

02:03:25So with that, let me say the questions for the record

02:03:28are due by noon tomorrow

02:03:29with signed hard copies

02:03:30delivered to the committee clerk in Dirksen 624.

02:03:33In particular, Ms. Gross and Dr. Jenkins,

02:03:37if you could even perhaps coordinate

02:03:40on recommendations for us in that beak shaving space,

02:03:43however you want to do it is fine,

02:03:45but I'd love to get those in.

02:03:46And we ask that our witnesses respond to those questions

02:03:49within seven days of receipt.

02:03:51So that would be within a week if you guys could do that.

02:03:53With no further business for the committee,

02:03:55the vote on the floor has already begun,

02:03:57and our hearing is adjourned.

02:03:59Thank you.

02:04:07Thank you.

The Senate Budget Committee Holds A Hearing To Consider The Future Of Electric Vehicles

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