JAN
22

“The Great Race” to Transform the Automobile

 

Achieving lasting energy security in the United States will require a fundamental shift in the transportation sector away from oil. In his new book, The Great Race, New America Foundation fellow Levi Tillemann recounts the story of a century-long battle between automakers for market share, profit, and technological dominance—and a race to build the car of the future. The United States is at the center of this contest, with its electric vehicle (EV) sector propelled forward by America’s automotive giants, Silicon Valley innovators, and a set of smart policies from the State of California. SAFE staff took a moment to discuss the Great Race with Tillemann, taking a closer look at the history of U.S. transportation policy and the steps necessary to reduce domestic oil dependence today. The story begins in mid-twentieth century California, where episodes of daily smog were forcing residents to remain indoors many days. In response, the state organized what is now known as the California Air Resources Board (CARB). Through a science-based approach to policymaking and technology forcing measures, CARB helped set the stage for the next half-century of California's clean air and transportation policy. Today, it governs emissions for California and 14 other states—a huge swath of the U.S. economy. CARB has used its influence over automakers and the U.S. federal government to advocate strong innovation policies that promote technologies like electric vehicles (EVs) and reduce American reliance on oil. But more must be done at the federal level, Tillemann believes. The author told us that a “systemic infrastructure policy” should accompany incentives designed to encourage EV adoption nationwide. Washington, D.C. has taken “a very different approach” from that in California, providing little motivation for the construction of charging equipment and other facilities essential to an EV ecosystem. What is necessary, according to Tillemann, is a policy that accounts for both the supply side and demand side, leveraging America’s huge market power to promote innovation. The United States is the undisputed leader in electric vehicle development and manufacturing. It is home to Elon Musk’s Tesla Motors, Chevrolet’s Volt plug-in electric vehicle, Ford’s Focus Electric, and North American production of the Nissan LEAF. At this year’s North American International Auto Show in Detroit, nearly every major automaker in the exhibit hall was sporting at least one EV model—painting a clear picture of the EV’s role in the automotive market. Going forward, EVs will be a powerful weapon in reducing America’s dependence on oil. “EVs are a critical tool for oil displacement,” says Tillemann, and California leads a group of eight states that is aggressively promoting EV adoption. Through market-based mandates and buyer incentives, they plan to put 3.3 million EVs on the road by 2025. “If you think about it in terms of 1 or 2 percent of oil demand, that’s a huge deal.” Securing even deeper cuts in oil demand for the transportation sector will require the federal government to take a more proactive role, crafting market-based policies that target the entire nation. Tillemann praised SAFE and organizations like it for working to reshape the debate on oil dependence in transportation, citing the need for guidance on building smart, strategic policies grounded in economic reality and taking into account the risks of overreliance on oil. “Good policy can be enormously powerful,” Tillemann added. “My book shows how the difference between success and failure in The Great Race often boils down to policy. China’s struggle to get its incentives right has hampered its competitiveness. Japan’s policy on EVs has been better, but still not nearly as effective as that of California." SAFE President and CEO Robbie Diamond considers The Great Race a necessary read for anyone looking to better understand the “complicated nexus between innovation, energy security, and smart energy policy.” An excerpt is available online at Marketplace.