The United States has legislated that 50% of all new passenger cars and light trucks be electric or hybrid by 2030. That's six years from now. Keep the number 6 in mind. Other countries have similarly ambitious plans for electrifying surface transportation.
The International Energy Association estimates that, absent revolutionary improvements in battery technology, the world will need to do a lot more mining to accomplish those goals. By 2030 the world will need 50 new lithium mines, 60 new nickel mines, 17 new cobalt mines, Copper, rare earths and other materials that need to be mined will add another 261 new mines. Altogether that adds up to 388 new mines. That's more than double the number of existing mines in the U.S. and Canada today.
But propose a specific location for a new mine and watch the nimbys and environmentalists come out of the woodwork to stop mine and refinery construction. Environmental barriers and regulatory uncertainty not to mention financing lead time and construction time mean a new mine can take up to 18 years from proposal to production. And the clueless politicians expect them to be ready to go in 6 years. Ain't going to happen.
The other thing that is happening is that car buyers are becoming increasingly skeptical about the relative value of electric cars versus internal combustion, ICE, powered vehicles. They don't go as far and take longer to charge in cold weather. And despite the global warming fears that are driving the electrify now legislation, we still have cold weather, a lot of it. Cars are piling up on dealer lots. Responding to lack of demand, Mercedes-Benz is delaying its electric vehicle goals by 5 years. Ford has slashed the price of its Mustang Mach-Es. Tesla is reducing the price on its Model Y. Hertz is selling off 20,000 electrics in its rental fleet and not replacing them. Ads for electrics are even disappearing from the Super Bowl for the first time.
What is going to happen? Car companies, required by law to sell a certain percentage of electrics will be incentivized to substantially increase the prices for the ICE cars they can sell. That or rationing ICE cars will be the only way they can maintain the legally mandated ratios. So your new ICE vehicle will cost a lot more. Or you'll keep driving the old, usually less fuel efficient car you already have.
It's not nice to mess with Mother Nature. And messing with markets, telling consumers what they can or cannot buy, usually does not work out very well either. Our current crop of politicians has managed to do both. Maybe it's time to plant a new crop. I'm Richard Fields with Report From the Fields. See you next week.