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Economic (Not Environmental) Factors Are Pushing EV Manufacturing

Job creation and economic opportunity (not environmental concerns) are the primary drivers of the big electric vehicle (EV) manufacturing push being taken by many industrialized nations, according to a recent study from Indiana University Bloomington School of Public Environmental Affairs and the University of Kansas.

The report reviewed various global EV polices. These included policies implemented by several of the world’s largest economic players — China, US, California, Germany, EU, and France.

Image Credit: Tesla Model S via Wikimedia Commons

Here’s a bit more on the research criteria involved and general findings:

“Examining each jurisdiction’s use of risk-management policies (e.g., those designed to reduce environmental and security risks due to oil dependence) or industrial policies (e.g., designed to boost fortunes of a specific technology or sector and increase market competitiveness) indicated the entire lifecycle of making and using EVs is viewed by policy makers mainly as an economic development opportunity.”

EV Manufacturing Study Highlights

Below are some of the highlights of the study. For more, check out the full Indiana University (IU) news release.

With electricity cheap from fossil fuel sources and no nationwide carbon price, China is nonetheless gearing up to be a competitive player in the EV market. Rather than taking climate action, this seems to be primarily for economic reasons. China is looking to EVs as a solution to boost its own car market and automobile manufacturing sector, as it faces challenges accessing the gas-based vehicle market. “Unlike other developed nations studied, China is not already heavily motorized; since it can’t penetrate the existing gasoline vehicle market outside China, it seeks to produce a large market share of its own future vehicle population and a growing share of the global EV market,” IU writes.

Meanwhile, the US has been seeking polices that will give underlying marketplace support. Policymakers don’t see solid EV sales as action towards environmental risk management, it seems, but rather as efforts to boost market competitiveness.

While China and the US aim for EV dominance, the report finds that Germany is the least committed towards EV economic policy. However, analysis also points to Germany’s intention to protect its own market share of luxury vehicles should electrified cars gain a foothold in the high-end vehicle market. “The least committed to EVs of the jurisdictions studied, Germany is nonetheless engaging in an industrial policy of hedging to protect the market share and viability of its premium car industry should electric propulsion gain a foothold in the worldwide premium car market,” IU writes.

A possible combination of lack of full government rule over a single country and aversion to policies that help one nation (within its jurisdiction) while hurting others may give some reason to why risk management is the main factor influencing EV policy within the European Union. The multinational government region has also taken a notably “technology-neutral” approach.

California, due to it’s high car population, which causes considerable pollution concerns, is using a mix of risk management and economic policy in boosting EV manufacturing.

France with its strong concerns regarding environmental issues, is leveraging a strong mix of economic and risk management to boost an already firm EV domestic market.

EV Manufacturing Policies Are Geared At Staking Strong Positions Or Even Dominance In The Emerging EV Market

“Billions of dollars are being invested despite doubts that some express about the viability of electricity as a propulsion system,” said study co-author and SPEA dean John D. Graham.

“The objective of many of these national and sub-national governments is to establish a significant position — or even dominance — in the global marketplace for these emerging, innovative new technologies,” he said.

With EV sales seeing a 100% increase so far in 2013, as governments grapple with determining a future road map for cleaner transportation, it’s clear that economic concerns are leading the way in pushing EV policy. However, as trends continue to play out with the rise of middle classes in emerging markets, and as limited global resources and environmental concerns such as global warming grow, building an EV manufacturing base may increasingly be linked to solving environmental problems.

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