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New US Energy Secretary Should Look To Elon Musk For EV Guidance

Maybe Granholm should invite Elon Musk to the White House and get some insights about EVs in China…

Former 2-term Michigan Governor Jennifer Granholm has been tapped by President-elect Biden to be the next US Energy Secretary. If her nomination is confirmed by the US Senate, Granholm is expected to leverage her experience dealing with the automotive industry into a broader low-carbon recovery plan that embraces climate mitigation strategies, investment in clean energy infrastructure, and clean job growth.

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While outgoing executive office holder Trump perseverated on coal and other dirty fossil fuels, Biden has given the nod to a champion for strong renewable energy standards. As governor of Michigan from 2003 to 2011, Granholm was a vocal advocate for solar and wind power and for $1.35 billion in federal funding for companies to make EVs and batteries. She prodded automakers to make the transition to EVs as insulation from industry devastation during the Great Recession of 2009. She also offered support to Michigan’s major carmakers and other companies and universities so they would be recipients of $1.3 billion in grants as part of the $787 billion Congressional stimulus act.

A wise move for Granholm as she assumes her new role as energy secretary would be to chat up Tesla CEO Elon Musk, whose insights into China’s EV market could be crucial if a Biden administration is to come at all close to achieving EV parity with China.

The Zero Emissions Goals of the New Energy Secretary & President

“We applaud President-elect Biden for his choice of Gov. Granholm to be the next secretary of energy,” said Environmental Working Group President Ken Cook. “Biden campaigned on a renewed investment by the federal government in clean, carbon-free sources of energy to power homes, buildings and transportation, and now it falls on Granholm to turn those pledges into policy. If confirmed, she will play a central role in advancing the federal government’s role in the rapid transition to renewables, which will save lives, create jobs, and combat the climate crisis.”

Biden promoted 2 EV policies in his campaign climate plan.

  1. He called for “unprecedented executive actions” such as shifting federal procurement system toward 100% “clean energy and zero-emissions vehicles” and insuring that US fuel economy standards are set so “100% of new sales for light- and medium-duty vehicles be electrified.”
  2. Biden’s “Year One Legislative Agenda” will be a collaboration with governors and mayors so over 500,000 new public charging outlets will be added by the end of 2030. The plan also calls for restoring the federal government’s electric-vehicle tax credit and prioritizing EVs made in America whenever possible.

Biden will have to appeal to a closely divided Congress for approval of tax credits and billions of dollars more in stimulus funding. Biden has promised to build 550,000 EV charging stations and create over 1 million jobs by investing in clean energy research as part of a $2 trillion accelerated investment.

Joe Britton, executive director of the Zero Emission Transportation Association, or ZETA, is optimistic that Granholm, who was able to pass green initiatives in Michigan, can make a difference. “If we cultivate the electric vehicle sector, we can create hundreds of thousands of manufacturing jobs, and Governor Granholm has been a key advocate in driving that economic development,” he said.

ZETA is a group of 28 car and utility companies — including Tesla Inc, PG&E Corp, and Southern Co. — was launched last month to lobby for EV-friendly policies. It’s the first industry-backed coalition of its kind advocating for 100% of vehicles sold by 2030 to be EVs.

The EV Race is on with China

Biden has said China was set to dramatically outpace the US in EV production. But the US, he said after the November 3 election, could “own” the EV market with the right green policies.

With over 1.4 billion people, China is the largest vehicle market in the world, and the Chinese government has aggressively promoted greener vehicles to reduce air pollution. Battery electric vehicles in China numbered 147,000 units sold in October, growing faster (+128%) than plug-in hybrids (+93%). Sales of “new-energy vehicles” (NEV) in China– a combination of electric, plug-in hybrid, and fuel-cell vehicles — will jump 40% in 2021 to 1.8 million units, predicts the China Association of Automobile Manufacturers.

Tesla’s increase in local production and price cuts has contributed to the positive EV outlook in China, as did expanded manufacturing capacity from China’s own Nio, Inc and Xpeng. The September Xpeng total was a 31% increase compared to the prior month and a 145% compared to the same month previous year; the company’s quarterly total was a 266% year-over-year increase. All-electric Tesla received permission this month to begin sales of  its made-in-China Model Y in China, so Tesla will now be selling its Model 3 and Model Y vehicles made at Giga Shanghai in China.

By the end of 2020, almost 2 million public and private charging points are expected to be available in China, with investment of over US $10 billion this year to expand the already world largest EV charging network. The US has just a fraction of that number of chargers. Then again, Tesla’s overarching plans have always included investment in an ever-growing supercharger network. That insight could provide the impetus for the new administration to follow suit.

Biden and Granholm will likely analyze Tesla’s trajectory alongside California’s Zero Emission Vehicle Program and the Obama-era tax credit ended by President Trump last year. Tesla is now the largest producer of EVs in the world and can be the role model for other US automakers who are playing quick catch-up to invest in EVs.

The Energy Secretary Can Team Up with Buttigieg for Green Transportation

Granholm as energy secretary will have a strong partner at the Transportation Department in former presidential candidate Pete Buttigieg, who has been consistent in his commitment to deploying millions of EVs and an extensive charging network as part of an equation to create thousands of domestic manufacturing jobs. More EVs could be on US city streets if Granholm and Buttigieg push for federal policy that has made sense for Tesla all along.

In a November 7 editorial for The Detroit News, Granholm argued that investing in a low-carbon economy would insure Michigan’s place as a leader in the auto industry. She cited data that finds a low-carbon recovery plan could create 1.7 million new jobs in the US by 2025. She noted that automakers like Ford and General Motors are producing a greater number of EVs, but “policy incentives are needed to ensure that the cost-saving and environmental benefits are available to everyone.”

These are the same automakers who lobbied the Michigan House of Representatives to pass a bill that would again prohibit Tesla from operating sales and service centers in the state, effectively reversing a settlement earlier this year allowing Tesla to operate in the state.

Granholm allowed that more companies that “represent the backbone” of the US economy “know that acting on climate change is good business sense. However,” she admonished, “the private sector needs greater support and political will from our policymakers to help us fully realize the potential of a zero-carbon future.”

Granholm has the capacity to assist the President-elect by assessing and tapping Tesla’s all-electric expertise and promoting growth in the rest of the domestic EV industry. Policies that emerge from the new administration via Granholm and Buttigieg can align the US transport sector to a 1.5°C trajectory, an absolute necessity for the well-being of the people of the US and the world.

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