John Donvan

Britta Gross and Jonathan Lesser, thank you so much for joining us here at Intelligence Squared. We, we are gonna be taking on the question of electric vehicles. And, and the way that we’re phrasing the question is, is your electric vehicle helping the planet? And the yours a little bit rhetorical. I’m not sure which of either of you actually drives an electrical vehicle, but you kind of get the point. So what we’d like to do is see how each of you basically would answer that question. So first, Britta Gross, your managing director of the Rocky Mountain Institute’s Carbon-Free Mobility Global Program. On the question, is your electric vehicle helping the planet, are you a yes or a no?

Britta Gross

Yes, electric vehicles are good for the planet. Not only do they cut local environmental emissions because of the zero tailpipe, but are they also dramatically reduce carbon in our overall system. They’re great for the planet.

John Donvan

Thank you, Britta Gross. Now, Jonathan Lesser, same question to you. You are a fellow of the Manhattan Institute, President of Continental Economics. You, uh, you actually authored the Manhattan Institute’s 2018 report, the High Cost of Electric Vehicles, which I think is telling us where you’re gonna go on this question. But are you a yes or no on the question of is your electric vehicle helping the planet?

Jonathan Lesser

No, no, it’s not because contrary to what, uh, Ms. Gross said, the carbon reductions compared to new internal combustion vehicles are so minimal that it will have no impact on world climate.

John Donvan

Okay, thank you, Jonathan, and also Britta. So we see where the two of you stand on this, and how we wanna dive in, go into more depth. And Britta, Jonathan just said that your, your claim is false, but we didn’t really get to hear fully your claim because you kept it nice and tight. Take some time now and tell us your argument in support of the argument that electric vehicles are helping the planet.

Britta Gross

Yeah, thank you, John. Yeah, I mean, there’s… I, I think that Mr. Lesser is really stating a very minority held position. When you look at the overwhelming evidence from the scientific community, there’s broad agreement, broad alignment globally, in fact, that we have to electrify the cars, the trucks, and the buses that we drive. And so whether the motivation is national security or whether it’s economic competitiveness, the environmental benefits stand. Um, these EVs deliver, win-win, win to address some of these very, very big challenges that we’re facing together. And these wins are so compelling that we’ve actually never enjoyed a moment like we’re living in now, where government, industry, and business are aligning around the electrification of the transportation sector.

And that happens when there is broad consensus that these vehicles matter, that technology matters, and consumers love these vehicles. So you sort of put all these wins together and it is very, very good for the planet. And there’s a major reduction in carbon reductions, uh, in carbon emissions because of these vehicles.

John Donvan

And what’s driving that consensus, Britta, just in terms of the data, the science behind the vehicles and their impact on the climate.

Britta Gross

Let’s take a look at the authorities on carbon emissions. Look at what CARB, the California Air Resources Board says the USEPA, the the Environmental Protection Agency. Look at what UCS, the Union of Concerned Scientists. Keep adding these voices. It’s the analysis, it’s the modeling. It’s the, it’s the understanding and recognition that, for example, here in the United States, transportation is the number one sector emitting carbon in the country, more so than the power grid, believe it or not, because the power grid over time has been reducing the amount of coal on the grid and introducing more renewables. Transportation is number one, it emits 29% of the carbon in our entire system here in the US.

90% of those emissions are from on-road transportation, the 270 million cars, trucks, and buses. So it matters a lot how these vehicles move around and what they’re emitting as they drive every single mile on the road. And keep in mind that every mile a gasoline vehicle drives on the road is emitting about a pound of carbon according to the USEPA. So it does matter what’s being emitted out of the tailpipe for these vehicles. And of course, it matters how the energy’s being produced to charge these vehicles. Of course, the grid’s getting cleaner every single day that we sit here.

John Donvan

Your point being that the electric grid is the source of energy for these cars and that the grid itself is getting cleaner over time?

Britta Gross

Absolutely. Absolutely right.

John Donvan

All right. I wanna get Jonathan Lesser into the conversation now. Jonathan, you’ve heard the basics of Britta’s point of view on this, her argument. So what’s your response to that?

Jonathan Lesser

Well, my response is that what she said is completely false. I mean, it’s as simple as that. Um, you’re simply substituting fossil fuels, you know, gasoline that would be used in a burned in a vehicle for natural gas, coal, power that’s being used to generate the electricity that powers your EV. Ms, uh, Gross lives in Florida, for example. 75% of the electricity generated in Florida, according to the Energy Information Administration, is produced with natural gas, and 70% is coal. Only 3% is solar. And when most people charge their EVs at night, you don’t get any solar power. The proper comparison, and I point this out, my Manhattan suit is not between a new EV and an existing internal combustion vehicle. The proper comparison is between new EVs and new internal combustion vehicles, based on the mix of generating resources.

The carbon savings are, are minimal. The other thing that’s odd is that if consumers love EVs so much, and they’re so wonderful, why do we have to subsidize them heavily, which is benefiting the wealthy because that’s who buys EVs. And why do we, we have to force consumers to buy them through various mandates and bans on internal combustion vehicles that states like California, New York, New Jersey are opposing? Why do you have to force consumers to buy something when it’s such a superior product? That’s nonsense.

John Donvan

All right. You’ve made several points there, and I want to go through them one by one by, by letting Britta respond to some of them. But your, your first point was that in terms of the generation of the electricity that is used to power these vehicles, you are making the argument is still very, very carbon immersive. That the power plants themselves, by and large, are still putting an awful lot of carbon into the atmosphere so that perhaps the vehicle itself is not emitting a lot of carbon, but the power plant, that power is the vehicle is emitting a lot of carbon. I think that’s how you’re making the argument. And I wanna take that critique back to Britta.

Britta Gross

Yeah, the numbers just don’t stack up. Let me talk a little bit about coal on the grid. I, I actually, in my spare time actually said on the Commission of the Orlando utility, and there, we have a roadmap to actually shut down all remaining coal plants by 2030. In fact, we’re gonna probably close them down by 2027. So this is the trend around the country. This is the trend that we’ve been seeing since 2010 when coal plant, after coal plant, after coal plant is coming off the grid, because of this broad recognition that coal is bad, there are heavy emissions of carbon from these coal generating plants, and that they have to be substituted just as quickly as possible with solar and wind.

Let me just reference what the Union of Concerns Scientists say in their modeling about carbon emissions. They say in their most recent work, “Even considering how electricity is generated on the grid, that an average EV produces fewer emissions than gas powered vehicles on any electric grid in the country.” Let me say that again. On any electric grid in the country, EVs produce fewer emissions than gas-powered vehicles. And this is even considering how electricity is generated, and how it charges your vehicle night after night, day after day. So it matters how electric is produced, but the grid is getting cleaner and cleaner every day. And you cannot say the same about gasoline, that once it’s extracted and once it’s burned, you don’t recover anything and it’s gone. And we have to dig deeper and introduce new technologies to, to find more petroleum to put into our gasoline vehicles.

John Donvan

Britta, how, how far away are we from the grid going fully sustainable energy sources?

Britta Gross

They’re sweeping the country. Our utilities that are talking about net-zero grids in 2050. So by 2050, we’re looking at net-zero at OUC, the Orlando Utility is targeting something that’s, you know, common enough around the country. And that is, we’re looking at about a 50% cut in emissions by 2030. And that is everyone’s climate goal. Experts tell us that to get on a climate pathway that contains temperatures to about one and a half degrees C, we’ve got to contain carbon in the next eight years to about 50% of what we’re emitting today. That’s a tall order, but the grid has to act, buildings have to be electrified, and the transportation system has to be electrified as well.

John Donvan

Okay. I, I, I wanna take back to Jonathan Lesser then, just your point in opposition to his point that the grid is dirty. Your argument is, it’s dirty, but it’s changing. It’s going away from dirty pretty fast. Jonathan, in other words, if, if Britta is right, and in 30 years from now, 25 years from now, the grid is no longer dirty, that would mean, okay, we… It’s better to be in a world with electric vehicles. So I’d just like you to take on the point about the pacing of this transition.

Jonathan Lesser

Well, the idea that the entire, uh, electric demand in the United States, which will be doubled or tripled because of electric vehicles can be met with just renewable energy, wind, and solar is simply false. It’s not possible given existing technology. Uh, in New York, they’re talking about a transition to reduce emissions as Ms. Gross says, by 50% by 2030. And to do that, they say, “We need something called dispatchable emissions free resources or DEFRs.” And they say they need about 10% of their capacity to be DEFRs. The only problem is DEFRs don’t exist. They’re talking about hydrogen-powered, basically combustion turbines that are powered by hydrogen, except the only way to cost-effective way to manufacture hydrogen today is by burning natural gas. Burning natural gas converted to hydrogen to shoving it to a turbine makes absolutely no environmental or economic sense.

I don’t know what Union of Concerned Scientists study is. Well, for my study, I compared new vehicle emissions limits set by the Environmental Protection Agency versus EVs, and what the power, mix of generating plants through the year 2050 will be according to the Energy Information Administration. Uh, now, RMI, beforehand has criticized me for using the EIA’s forecast methodology, but I used it because it’s transparent. So, I mean, this is just, this is just pie in the sky. The battery technology, it doesn’t exist. The supply of BAT materials for batteries to electrify all transportation and the storage requirements needed to run an electric grid with just intermittent wind and solar, it doesn’t exist. And so, yes, you can assume that technology is suddenly going to deliver that, uh, but technological improvement doesn’t typically happen on a set schedule.

And so unless you plan for the Starship Enterprise to deliver some sort of new generating technology to us in the next 20 years, uh, it’s just not gonna happen. This is just simply pie in the sky, unrealistic thinking or magical thinking, if my colleague Mark Mills at Manhattan Institute calls it.

John Donvan

I’m John Donvan, this is Intelligence Squared US. More of our conversation when we return. Welcome back to Intelligence Squared US. I’m your host, John Donvan. Let’s get back to our conversation.

Britta Gross

Let’s go to something more current like the EPA’s website. The USEPA has also addressed these two points about the electricity grid generating electricity to charge vehicles. And they’ve even gone back and looked at the, the use of the electricity grid to create and produce batteries used in electric vehicles is sort of this, the big part on these electric vehicles that’s, um, different than what’s on a gas and electric vehicle. Both of these are viewed as myths by the EPA. Go look at the EPA’s website. Two myths, specifically addressing the use of electricity in the process of producing and charging electric vehicles. And in both cases, they say these are myths. In fact, in the end, their conclusion is that EVs are better for the climate than gasoline combustion engine. So I, I think we should just look at, at, at current data, we should look at what, what the latest data su- suggests we do.

And again, this is the broad, overwhelming consensus of the scientific community. I agree. We don’t just turn a spigot and we have all of the energy storage we need to put renewables on the grid to get up to, you know, 50% first and then, and 100% at some point. We don’t have a spigot to turn for electrifying all the vehicles. This takes time. It takes a method. It takes a process, it takes the concerted effort of government, industry, and businesses. And this is what’s starting to happen right now. And so we need a lot of storage. We’re gonna need battery production capacity here in the United States for the vehicles themselves, and we’re gonna need battery production capacity for storage on the grid. And the beautiful thing is we’ve got two blank sheets of paper. The grid is revolutionizing and the transportation system is revolutionizing too. And we are helping the two industries together to make incremental.

John Donvan

Okay. So Britta, you laid out several targets there, targets for change in improvement. I, I just wanna come back to Jonathan and say, Jonathan, in principle, if those targets were amenable, would, would that be changing your argument, or are you really arguing that there still is a, a big place for the combustion engine in in society?

Jonathan Lesser

My position is quite simple. If people wanna buy electric vehicles, you know, I don’t know if Ms. Gross drives an electric vehicle or not, they should be able to do so. But what you should not have is mandates to force their purchase, subsidies for their purchase, for the charging stations, for the charging infrastructure, for solar panels that, uh, are used to charge them at home. If electric vehicles are so incredibly wonderful and fantastic, people will buy them without subsidies and mandates. And so it simply makes no sense to say, “Oh, this is just a transformational technology, it’s wonderful, et cetera, et cetera, et cetera.” And then say, “And we must force people to, to buy them.”

John Donvan

So I, I understand you’re, you’re addressing the politics of the moment, and I do want to return to that topic, but I’m, I’m just basically trying to understand whether you think that in say, 30, 50 years that all of us driving electrical vehicles could well be a good place to be if that could happen.

Jonathan Lesser

It, it… I don’t know. It might be.

John Donvan

You don’t know? Okay.

Jonathan Lesser

It… You know, I, I think there’s so many issues that, uh, need to be addressed that I don’t see that as… It’s, it’s simply not feasible.

John Donvan

Mm-hmm. All, all right. So, Britta Gross, I wanna take back the point that, that Jonathan was just making about, about the mandates and the incentives. His, his argument being, uh, essentially, the, the, this would be regulation overpowering the marketplace and individual choice, uh, particularly if there are mandates as opposed to incentives, but incentives are also there and incentives cost taxpayer dollars. And he’s arguing that this is not, this is, this is not wise. This is not a way to go in, in trying to generate greater adoption of electric vehicles. I’d just like you to take that on.

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Britta Gross

Yeah, I think that’s, I think these are, this is a really interesting area to talk about because I know that there’s sort of this political divide. And I think that, I think we have to very carefully look at what are early market government incentives and mandates trying to do. And what they’re trying to do is drive certainty into the market. And that’s the number one most important thing that business and industry wants. They just want certainty. Where are you guys trying to go by 2030? Where are you trying to go by 2050? Once that certainty is understood, then business knows where to put its investments. And so when I view things like, uh, the EV tax credit for $7,500 today, that is to begin to provide certainty for the market. It’s to drive adoption behavior so that consumers are more inclined to adopt the technology.

For me, it comes down to the technology is so good, and I’m saying over and over again that consumers love these vehicles and fleet operators love these vehicles because they’re cheaper to operate. Fuel is cheaper when you’re driving on electricity versus gas. It’s inevitable that we go to electric vehicles. However, not fast enough. The pace we need to be on to get to carbon targets in 2030 are just so significant. The 50% reduction that we have to do something to spur the market faster than it naturally wants to go.

John Donvan

Well, I mean, but that… But I, I think in, in a certain sense, you might be making Jon’s point. If the, if, if, if it is so popular, if it’s so obvious, if it’s so necessary, where is the consumer in jumping into this, onto this bandwagon? Why does the consumer need these pushes or these polls if it’s regu- regulation? If, if, as Jon’s saying, if it’s such a clear cut case, why aren’t we seeing consumers be solving the problem on their own by going for electric vehicles in large, much larger numbers?

Britta Gross

And, and so we are seeing some of that, right? You look at California, right? 16% of all new vehicle purchases are electric vehicles. So you are seeing this where there’s lo- where there’s high levels of awareness, where there are a lot of programs to get the word out to talk about incentives, to talk about, like, where can you charge your vehicle, when, when charging infrastructure is clearly available, not only at your home, but at work and out in the public space. This is a paradigm shift for everyone. As much as you might love an electric vehicle, you still think to yourself, “Well, but is there enough charging infrastructure out there? How often would I use a public charger versus home?”

John Donvan

Mm-hmm.

Britta Gross

And it’s getting past those hurdles. And what we’re talking about investing on the government side is just sort of the market starter. It’s a start for the market when larger sums are gonna be needed, vastly larger sums are gonna be needed from the private sector to sustain and build the market that we ultimately will shift actually all of transportation to electric.

John Donvan

Jonathan, your turn.

Jonathan Lesser

Well, um, if everyone’s gonna buy an EV anyway, then the, the incremental benefits are minuscule. And I showed that in my Manhattan Institute Report. That’s just basic economics. Uh, the government didn’t help build the, the infrastructure of, uh, you know, gasoline service stations. You know, why is it needed for, uh, EVs? And, and again, you get into this equity issue of the people who buy EVs are, tend to be much wealthier than the average American. And so you’re lading huge subsidies on these, on these people.

One reason consumers aren’t buying EVs, ’cause they’re really expensive. They’re about $10,000 more on average than an average internal combustion vehicle. Uh, lithium prices, the main ingredient for batteries have gone up 1000% last year. When you start looking at, uh, the shortages of steel, uh, lithium, uh, you know, the same people who are pounding the pavement or, you know, pounding their fists for electric vehicles and mandates are the same ones who don’t want any mines, uh, rare earth mines in this country who don’t care that cobalt and other major ingredient for batteries is being mined in the Congo, primarily using child and slave labor. And that’s, that’s based on an Amnesty International report.

You know, you’re just exporting pollution. Uh, China controls most of the rare earth metal market and production. The pollution in China from the refining of rare earths is horrific. Do environmentalists even care about that? Um, so it, it’s just… You know, this is just… I, I, I don’t know. I find this just silly. This argument is so silly because it’s, it’s like this, you know, energy comes from pixie dust and, and the energy ferry is gonna provide millions upon millions of electric v- batteries. Uh, Tesla’s Gigafactory produces about a 100,000 batteries a year. Uh, you’re gonna need, to, to run a grid on electricity and produce all the batteries for electric vehicles, you’re gonna need hundreds and hundreds of Gigafactory. And there’s simply aren’t the raw materials to even manufacture them

John Donvan

All right. I, I just wanna step in, I just wanna step in, just in terms of tone here and, and encourage you to not have to use pejorative terms like silly and mocking terms like pixie dust. I don’t think Britta is making arguments that are so fatuous as that, but I would like to give her a chance to respond to the substance of what yours saying, which is essentially that, let’s start with the batteries and the sourcing of the material for the batteries. It’s well documented in fact that, uh, cobalt, which is a critical factor in these batteries, is coming primarily from the Democratic Republic of Congo, where in fact, as Jonathan said, Amnesty has pointed out that slave labor and child labor is being used to get this stuff into the batteries of the cars that Americans are riding around in. That’s a real concern, Britta. what’s your response to that?

Britta Gross

Yeah, I’m, I’m glad we’re talking about the supply chain because of course, over the last couple years, all of us have learned how important supply chain is during Covid. Um, and I think it’s really important to look at, at what’s happening here for batteries, and how does this change, how does the supply chains chain change because of, of our, of our move to electric vehicles. Um, this is one of the reasons why the administration just invoked the Defense Protection Act. They’re looking to encourage the domestic production of these minerals and the processing of these minerals in the country. In fact, the DOE just offered a, a loan of a over a $100 million to a Louisiana plant that processes graphite that’s used in the production of anodes for the, for these vehicle batteries. These, this is exactly sort of this capacity building, this domestic manufacturing ability that’s really, really important.

And, and I’ll go back to something I said in the very, very beginning, that this is a huge global competitiveness challenge, but an opportunity. The, the administration currently recognizes that. They understand what it means to move the market, to set the goalpost, to understand where we have to get, because the climate consensus is there. We’ve got to make drastic reductions in carbon. And you have to do this by addressing lithium, nickel, cobalt, graphite, and manganese. Those are sort of the top five battery materials, and they’re looking at all of those. And all of those are part of the sort of the system.

John Donvan

But the, but the part of Jonathan’s argument that you’re not addressing is the, is the idea that the production of these batteries for the American market, for the markets in developed countries is causing harm to less developed countries, countries that are more vulnerable, both in, in terms of, as he said, exporting pollution, exporting carbon, and also just, uh, mistreating people. And, and, and, and that, as I said, it’s a serious concern, I think should be part of the conversation, and would like you to take that on.

Britta Gross

I mean, this is a, this is very heavily discussed in the automotive sector, in the battery manufacturing sector, this issue. Yes, you’re right. The Democratic Republic of Congo is the number one producer of cobalt, for example, in the world. But behind the Congo is Australia, number two. And number six is Canada. And Canada is wrapping up its efforts also to mine for more cobalt. So, I mean, some of this is supply and demand, right? And economist also understands supply and demand, and we just hadn’t had that demand. Now it’s certain that these electric vehicles are coming. And so now we have to put those supply chains, and chains and, uh, supply chains in place and make sure we are not doing harm to some of these companies, uh, to some of these countries and, and not exploiting folks because of where these materials are found today. Try to be as diverse as possible and try to be as close to home as possible to be really honest.

John Donvan

Jonathan, um-

Jonathan Lesser

Can I make a point?

John Donvan

Yeah, please do.

Jonathan Lesser

I, I wanna just make a point about the Defense Production Act. It’s really an empty gesture. And the reason it’s an empty gesture is because it’s not… The administration and environmentalists are blocking, permitting of new mines. And so as long as you block the development of new mines in Nevada, in Minnesota, uh, in Alaska, um, you’re not gonna increase production. Uh, so it… Again, the, the invoking the Defense Production Act is just simply a meaningless gesture.

Britta Gross

Yeah, I would, I would… The only thing I would suggest there is that, you know, there’s the, there’s the mining of materials, but there’s also the processing. And China really controls the processing of all these materials. And that is equally important here, that, that become, uh, a domestic capability here. So it’s, it’s not just the mining of materials, I think, and we do have to keep an open mind about where these materials are coming from. Don’t forget the processing of these materials, which could actually theoretically be done anywhere. And China is really dominating this globally.

John Donvan

Does that concern you, Britta?

Britta Gross

Uh, yeah, it concerns a lot of folks. I mean, you know, one, one thing about electric vehicles and, and why are we so aggressive, not only on the, on the climate and the carbon reduction opportunity and the zero tailpipe opportunity locally for, for air quality, but it’s also this global competitiveness. I mean, it’s very clear, Marco Rubio, Senator Marco Rubio, when he was chairing, uh, the Small Business committee in the Senate a few years ago, he issued a report that talked about 2025 China and their intent to dominate a number of sectors among them, transportation. This is an opportunity for China to leapfrog over combustion engine vehicles ’cause they, they were never really able to compete globally in that sector.

And now they wanna compete here in electric vehicles. And when you start to lose new technology, this ability to compete on battery technology, on, on the, on the, you know, mineral processing, on all the things that go into electric vehicles and what it means for autonomous vehicles, et cetera, you start to lose a lot of capacity to play globally in that landscape. And this is important, this is important to the economy and our gross domestic product every single year. Uh, automotive contributes about three, three and a half percent of GDP, um, every single year. And that’s an important sector and manufacturing we know has its tentacles in many other related industries, uh, in the United States. So it is important. It does concern me.

John Donvan

Jonathan Lesser, same question to you and I, and, and I think this was, this was a place where we wanted to get, is that China is absolutely demonstrating that they had the intention of being first in the world in electric vehicles. And China is attempting to be first in the world and a lot of other things that concern us. Does this sector concern you if China gets ahead of everybody else?

Jonathan Lesser

Well, I agr- I, I agree with Ms. Gross. It is a concern. Uh, but I, again, I think the prospects for expanding, uh, supply of material, raw materials in this country are minimal. And, therefore, you’re dealing… You know, if, if it’s manufacturing and, and processing, yes, that’s important, but then you’re dealing with economies of scale and scope, whether that can be overcome, I don’t know. You know, it’s the, the real problem is that as you increase the demand for these materials by orders of magnitude, the prices are gonna go up, and they’re gonna get very expensive. Uh, there’s a recent, uh, international energy agency study about the supply of, of materials needed for EVs, and it’s a fairly disconcerting study in terms of what’s gonna happen to the, the prices. So, you know, yeah, it’d be great if we could develop, uh, more processing capacity here, but I suspect that environmentalists will, uh, howl in anger when those new plants are developed ’cause they won’t like them.

Britta Gross

Maybe, maybe I could also just offer a couple thoughts on, on a couple of these questions about supply chain and, and just scale the scale of what this is gonna require. One thing I’ll point out that automakers view getting the price out of these vehicles, the cost outta these vehicles as the number one objective, right? I mean, they’ve got batteries, they’re safe, they’re durable, all these things are coming along really, really nicely. But the price, of course, they wanna get these vehicles down into a lower price point. And I’ll point out that one of the ways you do that is getting rid of the raw materials and some of the more expensive raw materials. So GM announced, gee, I think it’s now two years ago, that their new generation, this Ultium generation of batteries today on the vehicles now uses 70% less cobalt than the previous generation.

Tesla said something very similar. So that is the objective is that the batteries you’re gonna see and know in 5 years or in 10 years do not represent what we’re looking at today. They are going to use fewer min- minerals and materials. Uh, they’ll be better performing denser, all the things that you need to do as part of an engineering, engineering process. Those kinds of things are gonna happen.

John Donvan

So again, Jon-

Britta Gross

And, and if I could-

John Donvan

Please, please go on Britta. I’m sorry.

Britta Gross

Well, I was just gonna, I was gonna sort of swerve over to the utility comment before about how much load this is gonna be on the grid, and what that means. And let me just point out that yes, there is a load that’s coming to the grid, but there’s also capacity on the grid today, right? At night, there’s not a lot of load on the grid. And the beauty of of electric vehicles is that they are the biggest, smartest, most flexible load to come to the grid, potentially, arguably ever. And so here’s a load that you can actually command to charge at night or command to charge at noon when the sun is shining and, and California’s trying to offload some solar. So I think there are real opportunities on the grid.

Let me also point out what utilities tell me all the time. And that is that in the 50s, the utilities adapted to the electrification of kitchens. I mean, in, in just years, in just a few years within a decade. And in the 70s they adapted to air conditioning and places that were unheard of; Arizona, California, et cetera. So the, the utilities understand their business, they understand growth, they understand capacity, and, and this is the next big load to come. And they will treat this as they have every other sort of generational change in what the grid has to be able to do.

John Donvan

I’m John Donvan, this is Intelligence Squared US. More when we return. Welcome back to Intelligence Squared US I’m your host, John Donvan. Let’s return to our discussion. So Jonathan, you are arguing that EVs are not the be all and end all that, that, they’ll fall well short of the aspirations that Britta Gross is outlining for them as she cites many other scientific authorities on that point. But your analysis is different. And your thinking is different. And I would like to know where your thinking goes on. Okay, if it’s not gonna be electric vehicles that help us reduce the carbon output of transportation in the United States, w- what would? What is the solution? Where do you think we should be going with this?

Jonathan Lesser

Well, I’m not sure that reducing carbon emissions to zero is that, uh, significant an issue anyway. But, um, the way I would address it is first, by supporting nuclear power, uh, which provides reliable emissions-free electricity. And unlike wind and solar is not intermittent. And so you don’t need all the storage capacity, uh, and all the, the environmental impacts of that. Um, you know, I think internal combustion vehicles are getting more fuel efficient. And so carbon reductions are going down anyway. Um, you know, the switch to natural gas from coal, uh, happened because natural gas became much more cost-effective.

And so, you know, that’s, that’s the single largest source of reductions in US carbon emissions since 2005 is the switch from coal to natural gas. And so what, unfortunately, the current administration is trying to limit, uh, uh, supplies of new natural gas by limiting, uh, uh, oil and gas permits. So that’s not helping. You know, I just think it… As, as I think John Kerry himself said, he’s the climate Czar for the US, uh, under the current administration, that even if the US reduced its carbon emissions to zero won’t have any impact on the climate without looking internationally. And, and it’s quite clear that interna- you know, um, developing countries like China, the US, Russia, they’re not gonna reduce their carbon emissions to zero because they don’t wanna sacrifice their economic growth. It’s not gonna happen.

John Donvan

So it sounds as though a good deal of your, our, uh, position, uh, challenging the, uh, the utility and the usefulness of, uh, electric vehicles comes down to what you’ve said at the beginning of your comment just now, that you’re not all that worked up about trying to reduce carbon overall. Do, do I have that correct ’cause that’s, that’s pretty fundamental to your argument, do it seem?

Jonathan Lesser

No, that’s not my argument. My argument is that electric vehicles aren’t going to be the transformative way to reduce carbon emissions.

John Donvan

Mm-hmm.

Jonathan Lesser

Uh, that the, the net reduction in carbon emissions from electric vehicles is quite small, and the cost investment is going to be massive. So it’s not a particularly cost-effective way to reduce carbon emissions.

John Donvan

Are there other ways, for example, such as supporting deeper, broader, further development of public transit that you would support and do support and argue for?

Jonathan Lesser

Well, I, I, you know, again, I think public transit is fine. It doesn’t really help. You know, I live in a rural area. There are no, there’s no public transit within 30 miles of here.

John Donvan

Mm-hmm.

Jonathan Lesser

Uh, it doesn’t help people who have to go to work, contractors, plumbers, uh, they can’t use buses or Uber.

John Donvan

Mm-hmm.

Jonathan Lesser

Uh, you know, uh, I couldn’t get an Uber where I live if I tried. Um, so yeah, you can use public trans- transit, you can walk or bicycles, Ms. Gross suggests. Sure, that’s great. But, uh, for a lot of people in the country who don’t live in dense cities, um, that’s not much of an option.

John Donvan

And Britta Gross, I’m guessing, I’m pretty sure I’m right about this, that your su- suggestion for those individuals would be electric individual electric cars.

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Britta Gross

Yeah. I mean, look, 250 million of the 270 million vehicles on the road are cars. Light duty vehicles, light duty vehicles. Trucking make up makes up the vast majority of the rest. But, but, you know, we’re almost like at 90% of all the emissions, carbon emissions and emissions per our transportation system are coming from the cars and light duty vehicle trucks, uh, that are on the roads. And so it makes a big difference. In fact, I mean, the, the new, the average new gas vehicle fuel economy today is 31 miles per gallon. A new truck, they’re averaging about 21 miles per gallon. And if you take a look at 31 miles per gallon on average for these cars and compare it to an EV, the, the, the com- the internal combustion engine vehicle, that gasoline vehicle actually needs to get 88 miles per gallon on average across the country to be as clean as an electric vehicle.

And that’s, again, another study by the Union of Concerned Scientists looking at this trade-off between EVs and, and trying to demonstrate for everyone, here’s what the math says, here’s how much it matters. And in fact, if you’re operating on a really clean grid like, uh, upstate New York that has a lot of hydro on its grid, you’d have to have like a gas vehicle of like 231 miles per gallon to compete and outperform from, from a cleanliness and a carbon, uh, standpoint to outperform the EV. So no, it, the most important thing we can do is electrify. And, and maybe just this comment about forcing consumers, no one’s forcing consumers, um, what I can agree is that there just aren’t a lot of models out on the road, right?

We’ve, we’ve been looking at smaller sedans, and, and you know, up until now, since EVs were basically introduced in 2010 again in this next generation. And, and when you look at what’s coming and what, just yesterday was the Ford F-150 Lightning announced, I mean, who doesn’t recognize the name F-150? Every American, every fleet operator understands the u- utility of that vehicle and what it can mean. So there’s no forcing Americans in these cars. It’s awareness and driving, driving more models into the market. And that comes with confidence, and that’s where signals can be sent by the government, for example.

John Donvan

Well, Jonathan Lesser, I, I think by, by forcing, it may have been my paraphrasing of what you said, but I think your point is that there are states passing laws that are going to be banning the, the introduction in, in 10, 15 years from now in the further production of, uh, of, of non-electric vehicles. And you’re also talking about the fact that government subsidies for purchases of vehicles comes from the treasury, and all of us are paying into that treasury. And if we’re not one of the people who can afford to buy one of those cars, we don’t get that benefit. So there there is, there is some compulsion going on. Go ahead.

Jonathan Lesser

Well, absolutely, and it’s actually worse than that. For, for example, Ms. Gross mentioned that the electric utilities and the grid, well, for, to have charging infrastructure and electric vehicles at home, you’re gonna have to have massive investments in the local distribution system. And, and that’s the poles and wires people see running down this street. Um, the way costs are allocated, that’s gonna be paid by all residential consumers, including many who can’t afford electric vehicles. So there’s, uh, there’s a fundamental equity issue here that all this government money is primarily going to the wealthiest Americans, which I simply believe is wrong.

John Donvan

But until the cars get cheaper, that is, when the cars get cheaper, when there’s obviously, when there’s scale.

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Jonathan Lesser

But, but they’re not getting, they’re not getting cheaper, John. Tesla’s raised its prices three times this year. Um, the average cost of an EV this year or currently is 56,000 compared to about 45,000 for a new internal combustion vehicle. They’re not low cost. And as the demand increases for electric vehicles and all the materials needed to manufacture them, then their cost is going to go up. And if you mandates, if you mandate that consumers must buy your product, when you have additional market power, you can raise your prices. And, and that’s what I fully expect to see, prices are going to increase.

Britta Gross

Yeah, maybe I could, uh, maybe I could offer just my thoughts on this, too, ’cause I think you’ve, you’ve pointed out a couple very interesting things here. Let me just start with the number of models in the market that are more affordable. So today, um, I think there are six, there are six EV models that are priced less than $30,000. There are 25 priced, less than $40,000. And let me give you some perspective. The average transaction price for a new vehicle today is $47,000 for new cars and trucks. That has significantly increased. And so we have to keep, sort of, keep both in mind that new cars are not purchased by sort of average Americans. Uh, 90% of new car buyers, all new car buyers own their homes, et cetera. So, uh, it’s really important to keep this in mind. Let me also point out that battery costs are coming down, which is why they’re able to start putting batteries in some of these sort of larger, more affordable vehicles, relatively affordable vehicles like the F-150, like the Chevy Silverado coming, 80% reduction.

There’s been an 80% reduction in the cost of batteries in the last 10 years. My date is three years old on that one. I haven’t looked in three years, but 80% reduction. So they’re desperately looking to drive these costs down. And the last thing I’ll say about this is that while the upfront cost is maybe still there, there on, on, on some vehicles, again, keep in mind that $47,000 for all new vehicles in the market today, on average, keep in mind that operating and driving every mile on electricity versus gasoline saves you about one third the cost of driving on gasoline. So it’s much cheaper. And that’s why fleet operators like FedEx, UPS, Amazon really are interested in electric vehicles. It’s not… These are economic decisions for them too. So one third, the cost of driving on gasoline, and we’re talking about $4 gas on average around the country right now.

John Donvan

Well, let’s talk a little bit just to wrap up the conversation here. Uh, faith in innovation. Uh, I wanna see where you are on that, Jon- Jonathan, because I think that’s the point that Britta’s making that, everything that she’s promising her argument on is that technology’s gonna figure out a lot of these things, including, uh, finding different sources for the material needed for batteries, including, uh, further transitioning the power grid to, uh, to non-carbon emission technology and including, uh, just overall making these vehicles, uh, cheaper, easier to sustain getting the infrastructure put in place, uh, uh, for, for charging stations so that more and more, uh, individuals will wanna buy these things, that there’s a… She has a belief in innovation being, uh, a way to, to address all of this. I wanna know where you are on that as well.

Jonathan Lesser

Well, I believe in technological innovation. I don’t think techno- technological innovation is spurred by the government. Um, you know, that’s the, the… Again, I have no problem at all. If, if, you know, Ms. Gross wants to buy an electric vehicle, uh, more power to her. Uh, if, if consumers wanna buy them, great. I think that’s wonderful. That- that’s what markets are all about. But it should not be ma- It should not be done through mandates. And I believe the mandates and subsidies, and it’s not only subsidies for electric vehicles, it’s subsidies for wind and solar power, even though, uh, those advocates say, “Oh, it’s cheaper than any… It’s the cheapest source of electricity.” Well, then why do you have to subsidize it? Um, so, you know, again, yeah, let, let the market innovate on its own pace. Uh, it will do that as Ms. Gross points out, um, you know, without government dates.

John Donvan

So, so Jonathan, if for example, it was proposed that there be subsidies for lower income individuals to buy electric vehicles, even used electric vehicles, you would, that would not be something that would fly with you?

Jonathan Lesser

Uh, I would prefer that there are no subs. You know, I think government subsidies are inefficient. They, they have a net economic loss. Um, you know, you can’t subsidize your weight to wealth and prosperity. It’s impossible. That’s, that’s free lunch economics. Um, you know, again, I, I, I would just let the market innovate. Uh, you know, if electric vehicles are so wonderful, and the innovation is happening so fast as, as Ms, uh, Gross claims, then you don’t need any of the government programs.

John Donvan

All right. And Britta Gross, just one more time, back to you. You are a believer in innovation, but you are also, from the beginning of the conversation, arguing for a strong role for government in spurring and inspiring and funding this move to a, a world where most of us are driving electric vehicles. So can you respond to Jonathan’s point that mandates just don’t have a part of this. Innovation does, mandates don’t, and by mandates we mean, just to be clear, uh, again, the sorts of things that you were talking about at the beginning of, of government programs to subsidize.

Britta Gross

Yeah. Let me, let me just, uh, maybe just add some perspective on, on sort of what the government’s doing. The government… Again, I’ll go back to something I said earlier, that the, the real role here of government is just to align the rest of us on what we’re trying to accomplish, what’s important to the national security and the economic, uh, prosperity and the environmental, um, uh, you know, benefit of, of, of what we have here to enjoy our life here in the United States. And so the job of the government is to inspire confidence. And it’s hard to do that if you’re not showing by leading, um, with a small- with smaller, relatively smaller investments from government. For example, this, this recent infrastructure investment of seven and a half billion dollars from the IIJA funding. It’s, it’s to fund primarily a large charging infrastructure network.

It’s going to be a better network than that we have today. It replaces a very patchwork system that’s out there. That in turn… I mean, look at what private, the private sector is investing because of this renewed excitement and confidence in where we’re headed and what problems we have to solve. GM, $35 billion. 7 billion just last week announced from Michigan alone, Ford, $50 billion, VW, 7 billion in the United States. And on and on these numbers go. The private sector is stepping up and we need to keep going back and forth. Government shows confidence, private and sector steps up to the plate. Government, you know, continues to show that sort of sustained interest and willingness to sort of, uh, put those sign place in, uh, signpost in front of us and the private sector will respond. So this is just a down payment on what has to happen by the private sector, no question about that.

This thing doesn’t get to scale or the pace required without the private sector actually taking on that responsibility. And I have a lot of faith that that is now starting to happen. And we are now finally for the first time seeing a path to carbon reductions by 2030, that frankly, I wasn’t seeing before this, this understanding of where we’re trying to get and why it’s so important. And then what are all the things that have to change to get there? And, and now let’s start putting those pieces together of this puzzle so that we all get there sort of in lockstep.

John Donvan

Jonathan, if the principle that cited in the case for subsidies were fundamentally to protect the environment, does that impact your thinking in any way?

Jonathan Lesser

I don’t understand your question.

John Donvan

If the point of subsidies, if the, if the case were made that subsidies should be invoked, put in place because the goal is not to support the wealthy or su- or to help the less well off individual buy a car, but because overall it’s gonna be healthier for all of us to have less carbon in the air, would that be more persuasive to you?

Jonathan Lesser

Uh, it depends on what the, the cost of the subsidy is and how efficient it is at achieving the goal. And in my view, subsidizing EVs is a terrible way to reduce carbon emissions. It’s not cost-effective at all. And so, so no, I don’t, you know… Um, you can, you know, there’s certainly a case for externalities and taxing them or subsidizing different sorts of technologies, but you want to do what’s the most cost-effective. Uh, you know, if… uh, in my view, if you want to do what’s most cost-effective, impose a carbon tax and let… again, let markets respond that way with that subsidies-

John Donvan

Well, we would love-

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Jonathan Lesser

Yeah.

John Donvan

That’s a debate that we’ve actually done at Intelligence Squared. I’d like to refer our listeners to that one, but for now, I want to thank Jonathan Lesser of the Manhattan Institute and Britta Gross, the managing director of the Rocky Mountain Institutes Carbon Free Mobility Global Program for joining us here at Intelligence Squared. Britta and Jonathan, thank you so much for joining us.

Jonathan Lesser

You’re welcome.

Britta Gross

Pleasure. Thank you.

John Donvan

I wanna thank you, our audience, for tuning into this episode of Intelligence Squared. I hope you enjoyed it just as much as I did. Intelligence Squared is a nonprofit that is generously funded by listeners like you, members of Intelligence Squared, academic institutions and other partners, and by the Rosenkranz Foundation. Claire O’Connor is our CEO. David Ariosto is our head of editorial. Amy Kraft is our Chief of Staff and head of Production Shale Mera and Marlette Sandoval are our producers. Kim Strimple is our production coordinator. Damon Whitmore is our audio producer, and Robert RosenKranz is our chairman.

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Our mission here at Intelligence Squared is to restore critical thinking and facts and reason and civility to American public discourse. We would love your support in that effort. Please visit otdprod.wpengine.com to join the debate and hear from both sides, at least both sides of every issue. I’m John Donvan, thanks so much for listening.