The Month in Transportation – August

By Jeremy Ertl

Welcome to the latest and greatest from the world of transportation, aggregated by our team at broadhead | HMH. Every month, we aim to share interesting links, thoughts on trending stories and more about the future of transportation. This month (buckle up, it’s been a busy one):

IRA: The Little Acronym That Could

Earlier this month (August 16), President Biden signed the hallmark Inflation Reduction Act into law, which includes a bevy of ambitious social and climate policies to fight climate change and cut emissions ~40% by 2030. The IRA is the largest investment in clean energy and climate action in U.S. history.

The Zero Emission Transportation Association (ZETA) broke down what this means for electric vehicle adoption. A few key provisions:

  • EV manufacturers will no longer be capped at 200,000 units per manufacturer on sales.
  • New vehicles will be eligible for a $7,500 tax credit at point of purchase (qualifying vehicles will receive $3,750 for meeting each of the critical mineral and battery component sourcing requirements).
  • Qualifying used clean vehicles will benefit from a tax credit of up to $4,000 or 30% of vehicle cost and are not subject to the same sourcing requirements as new EVs.
  • Clean commercial vehicles will be eligible for a tax credit equal to 30% of the difference between the cost of the clean vehicle and its gas-powered counterpart.

The law immediately ends credits for about 70% of the 72 models that were previously eligible, but Automotive News broke down the 20 models that will still get EV credits through the end of 2022. CNN also further explained these tax credits for consumers.

Prior to the signing of the IRA, Biden also signed legislation on August 9 that provides $52 billion to boost domestic semiconductor research, development, and production to combat the global shortage of microchips, according to School Bus Fleet.

This is all great news for what is quickly becoming known as the Battery Belt (think America’s heartland, the South and Midwest), where many EV-related factories and facilities are being built, via Axios.

The (Not So) United States of Electric Conversion

We talk a lot about EVs here at broadhead | HMH. With so many developments – new partnerships, models, pilot programs and now – legislative policy incentives – announced every other day, it may seem like mass conversion is just a few years off. However, the reality is that the U.S. is still decades away from a fully electrified American dream.

New findings show that only a handful of states are leading nearly all U.S. electric car adoption. California (39%), Florida (6.7%), Texas (5.4%), Washington (4.4%) and New York (3.6%) lead that list (data compiled using monthly vehicle registrations, per S&P Global Mobility).

So, what’s the hold up?

Concerns abound for consumers. Everything from affordability to range anxiety can plague a decision to transition away from a gas-powered vehicle.

Let’s be negative for a minute, shall we?

  • In a survey of more than 11k EV owners, J.D. Power found that one in five drivers were not able to charge their vehicle during a visit to a charging station. 72% blamed faulty equipment. This lack of a reliable charging network is a serious problem for Biden’s administration as they hope to accelerate adoption and curb emissions.
  • Many of America’s favorite road trip destinations are still not a possibility for electric vehicles other than Teslas. AAA compiled data on the 11 most popular travel destinations (places like the Grand Canyon, Zion National Park, etc.) and found that four have stretches of at least 200 miles between public fast-charging stations. To zoom out on those numbers – of the more than 80 EV models currently in the U.S. marketplace, 31 travel less than 250 miles on a single charge. And that range can vary based on interstate speeds, cargo weight and inclement weather.

Hey, EV can’t always be all spark and no clouds! We return to our regularly scheduled programming in 3…2…1….

Make Room for BYD, an Egoless Tesla

Bloomberg did a fantastic cover story on BYD, profiling the Chinese enterprise many have never even heard of by headlining the industry titan as a company that “builds its own batteries and chips, mines lithium, works with unions, makes EVs the middle class can afford—and its billionaire CEO isn’t obsessed with Twitter.” The Real Founders of EV Companies, anyone? Bravo?

BYD is already the biggest EV producer in China and is in a tight race to unseat Tesla as the world’s biggest EV maker by sales volume.

Enter billionaire founder and CEO, Wang Chuanfu. Whereas Elon Musk began his career by selling six-figure luxury sedans, Wang has primarily focused on developing affordable cars for middle-class drivers. BYD also has an expansive vehicle product line (including trucks, forklifts, and buses, tapping the commercial market) where Tesla has failed (Google ‘Cybertruck’ for reference). Musk is hostile with labor unions, while Wang has unionized his workforce at U.S. factories. Musk trades jabs with the White House on Twitter, where Wang hosts Chinese Premier Li Keqiang for factory tours. The list goes on.

A game of thrones to watch, not exclusive to HBO Max.

I’m Sorry, Is Autonomy Boring You?

As our cars continue to get smarter, the onslaught of autonomous and self-driving safety features can actually make driving more boring, according to a story by Axios.

Waymo, a leader in self-driving technology and a unit of Google, is ringing the alarm on this issue, noting that people who drive cars that mostly operate themselves for long stretches may enter a “dangerous state of fatigue” with little to do at the wheel. Additionally, an event known as “irony of automation” suggests that drivers cannot take control of a vehicle fast enough when an emergency takes place that a robot can’t handle.

Waymo’s solution is for all OEMs to adopt a “Fatigue Risk Management Program,” with solutions to mitigate (and keep awake) drowsy AV test drivers. Monitoring cameras can help, in addition to self-assessments before, during and after a driving shift. Frequent breaks and small in-car tasks are also necessary, like pushing a button repeatedly throughout a drive to test the driver’s motor and cognitive skills.

Until autonomous cars can operate on roads with only other fully autonomous cars, human error will continue to test the limits of self-driving technology.

California Puts the Kibosh on Gas

Eureka! California is striking gold (and maybe some nerves) with new sustainability deadlines. By 2035, the state plans to phase out sales of all new cars, trucks and SUVs that are not powered by electricity or hydrogen, via NPR.

They are the first state to take this step and are currently seen as the most aggressive (and in some cases, progressive) plan in the nation for hitting the brakes on fossil fuels. The California Air Resources Board (CARB, the good kind) is set to vote on the policy. As a caveat, one-fifth of sales after 2035 can be plug-in hybrids. And tax credits of up to $7,500 are available (but still complicated to obtain) towards the purchase of a new vehicle.

The move is expected to drastically reduce emissions and air pollutants, but as California remains the seventh-largest oil producing state, the new policy could cause pain points for providers in the interim.

The state looks like it’s one step closer to commercial electrification, as well. After a successful three-year pilot program, Volvo Trucks is wrapping up its LIGHTS (Low Impact Green Heavy Transport Solutions) project, via a report from Electrek.

LIGHTS studied class 8 Volvo VNR electric trucks in California’s South Coast Air Basin, one of the largest cargo gateways in the U.S.

Volvo concluded that in order for freight trucking to receive widespread electrification, federal and state organizers need to align to: (1) improve route efficiency through analysis of hills, traffic, weather and driving patterns, (2) provide reliable and cost-effective charging station availability and (3) offer training and support for new heavy-duty electric trucks.

It’s always nice to have a roadmap, eh?

Quick news bites:

  • Faraday-someday-distant-Future delayed production of its debut EV, the FF91 SUV, via Bloomberg.
  • Speaking of fledgling “zero-revenue, cash-burning” EV companies, Fortune had a lot to say on the Canoo x Walmart collab – check out the exposé (and interview with CEO Tony Aquila) here.
  • Dodge’s first dip in the EV pond will be a crossover called the 2023 Hornet, a nod to the 1970s station wagon, via CNBC. They’re also giving us a glimpse of the first electric muscle car, the Charger Daytona SRT, via Detroit Free Press.
  • American Airlines is picking up what Boom Supersonic is putting down, placing a deposit (sight unseen) on 20 of the company’s supersonic planes (still in the napkin sketch stage), via AP.
  • Drone delivery might be coming to suburbia sooner than you think – mostly due to the lack of obstacles, via The Next Web.
  • Honda and LG announced plans to build a $4.4 billion EV battery plant in the U.S. (TBD on exactly where), with construction expected to start in 2023, and mass production slated for 2025 to make phasing out fossil-fuel vehicles by 2040 a reality, via CNN.

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