A new report from the Institute for Energy Research (IER) details the costs of electric vehicles (EVs), the limitations to electric vehicle adoption, and the myths surrounding electric vehicle policy.
In When Government Chooses Your Car, IER finds that the average price of EVs is 42 percent higher than traditional, internal combustion engine-powered (ICE) vehicles. Further, U.S. average charging costs for a typical-sized EV battery are $12.32 per charge, and as high as $25.01 per charge in California.
“More electric vehicles mean more electric load placed on an already strained grid….Massive infrastructure and electric capacity investments are needed to meet this increased demand,” IER notes. “Adding in efforts to eliminate the 60% of electricity generation currently derived from natural gas and coal means even more spending on new generation sources. All this transmission and generation spending must be paid for, and ultimately, utilities pass these costs on to their ratepayers. This transfer means higher electricity costs. The more generation is needed for electric vehicle load, and the more required spending on transmission and generation capacity, the higher the rates must go. Indeed, we have already seen electricity prices rise significantly in recent years.”
The IER paper also notes that the higher repair costs for EVs are typically reflected in insurance premiums, which are around 20 percent higher for EVs than for traditional automobiles. What’s more, EVs typically depreciate in value faster than ICE vehicles due to their maintenance costs, as replacement battery packs can cost up to $30,000.
IER also points out that while EVs eliminate tailpipe emissions, their heavier weight and faster acceleration may increase particulate emissions from tire wear and that tire emissions may exceed tailpipe emissions. Additionally, EVs require significantly more mineral inputs than conventional cars and the environmental impact of mining these minerals is considerable.
There is a serious human cost to that mining as well, as was highlighted in another report in 2024 from the American Consumer Institute (ACI).
“A typical EV battery weights 1,000 lbs,” ACI notes. “Collectively, 90,000 lbs of rock/ore are involved just to extract the amount needed for one battery. But to access each ton of ore, anywhere from 3 to 20 tons of earth must be removed. This averages out to about 500,000 lbs of earth removal per car battery.”
In the Democratic Republic of the Congo (DRC), which contains over half of the world’s known supply of cobalt, ACI points out that “entire displaced populations are forced to dig [for cobalt] with their bare hands for a few dollars a day because they are left with no alternative after their villages have been demolished. Human trafficking and child labor are rampant; an estimated 25,000 children work in DRC mines. Cobalt is toxic to the touch and the fumes permeate the air and water supply. Tens of thousands, including young children, die or lose limbs from collapsing tunnels. Just like the Uyghur camps taint the solar industry, these human rights violations tarnish the EV supply chain.”
Another study from the Mahattan Institute for Policy Research found the broad-based adoption of EVs will likely increase pollution and environmental costs.
“Based on data from the U.S. Energy Information Administration (EIA),” the study notes, “increased reliance on ZEVs will increase overall emissions of sulfur dioxide, oxides of nitrogen, and particulates, compared with the same number of new internal combustion vehicles, even after accounting for emissions from petroleum refineries.”
Furthermore, there is effectively no economic value to the potential carbon dioxide (CO2) emission reductions of EVs. “Although new ZEVs will reduce CO2 emissions compared with new internal combustion vehicles, the overall reduction will be less than 1% of total forecast energy-related U.S. CO2 emissions through 2050,” the study continues. “That reduction will have no measurable impact on world climate and thus no economic value.”
“Even if, by 2050, all internal combustion vehicles were replaced by ZEVs,” the study concludes, “the resulting reduction in CO2 emissions would be less than 500 million tons per year. This is less than half the estimated annual impact of the U.S. Environmental Protection Agency’s now-moribund Clean Power Plan, which itself would have had no impact on world climate.”
Despite constant pronouncements of their inevitability, most Americans remain skeptical of purchasing an EV. The latest results of the annual poll conducted by the Energy Policy Institute at the University of Chicago and the Associated Press-NORC Center for Public Affairs Research, released on June 4, finds 46 percent of the 6,265 respondents “not too likely/not at all likely” to purchase an EV, while only 21 percent said they were “extremely likely/very likely” to buy one. Further, in factoring why they wouldn’t purchase an EV, 80 percent said they were too expensive, 75 percent said the range-per-charge wasn’t far enough, 72 percent said they take too long to charge, and 66 percent said they don’t know of any charging stations near where they live.
“As this report clearly shows,” the IER paper concludes, “at least in the near term, a forced transition to 100% EVs is not possible. Consumer resistance in the United States is widespread, and the factors that cause that resistance, such as cost and range anxiety, are not subject to near-term solutions. Even if Congress were to create new legal authority to allow the government to override consumer choice, there are still practical limitations on the pace of growth that EVs can achieve in areas like mineral production and charging infrastructure. Those limitations are independent of the costs of an EV transition. Still, the high costs of a transition discussed in the paper also limit the pace of EV adoption because, ultimately, someone must pay for all those costs, whether it’s consumers or governments. This near-term inability to achieve an EV transition in the U.S. should be more prominent in the policy and media discussion. It is frequently assumed that a rapid transition is already happening and inevitable.”
The questionable, meager environmental gains to be achieved by adopting tax breaks and subsidies encouraging the broad-based adoption of electric vehicles are far outweighed by the extraordinary cost to vehicle owners and taxpayers. Such government subsidies and incentives make for poor public policy because they encourage rent-seeking, subvert the market’s natural mechanism for matching supply with demand at the correct price, and clash with other government incentives, all of which creates adverse fiscal consequences.
The following documents provide more information about electric vehicles.
When the Government Chooses Your Car: Examining the Challenges and Complexities of a Transition to Electric Vehicles
https://www.instituteforenergyresearch.org/wp-content/uploads/2024/12/WHEN-GOVERNMENT-CHOOSES-YOUR-CAR.IER_.pdf
This paper from the Institute for Energy Research provides a comprehensive analysis of the current landscape of electric vehicles within the U.S. motor vehicle market, emphasizing the challenges and complexities surrounding a forced transition towards electrifying our transportation system.
Short Circuit: The High Cost of Electric Vehicle Subsidies
https://www.manhattan-institute.org/sites/default/files/R-JL-0518-v2.pdf
This Manhattan Institute study concludes the widespread adoption of electric vehicles in the United States will likely increase air pollution compared with new internal combustion vehicles. At the same time, subsidies for ZEVs and the required infrastructure to support them benefit the higher-income consumers who can afford to purchase them at the expense of lower-income consumers who cannot.
Clearing the Air: Honest Truths about Green Energy
https://www.theamericanconsumer.org/wp-content/uploads/2024/07/Clearing-the-Air.pdf
This report from the American Consumer Institute details many of the environmental impacts associated with the so-called green energy forms being heavily promoted. The life cycle of all three—the wind turbine, solar panel, and EV battery—involve significant environmental consequences that should not be overlooked and need to be part of the discussion when implementing energy policies.
Policy Brief: How the Green New Deal’s Renewable Energy Mining Would Harm Humans and the Environment
https://heartland.org/wp-content/uploads/documents/PBdriessenmining2Apr20.pdf
In this Heartland Institute Policy Brief, Paul Driessen, senior policy advisor with the Committee For a Constructive Tomorrow, argues expanding mining on the scale needed to meet the renewable energy requirements contained in the Green New Deal and other proposed renewable energy mandates would cause unimaginable harm to the environment, wildlife, and humans.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Heartland’s Government Relations department, at [email protected] or 312/377-4000.
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
