There are now 486 electric vehicle startups in China, where electric car sales topped 1.1 million last year. That’s three times more than sales in the United States.
While American automakers slowly add new electric cars in the U.S. market, the Chinese market is a different story: GM, which has committed to an all-electric future, plans to introduce 20 “new energy” vehicle models there by 2023—including electric cars and plug-in hybrids—and 10 of those within the next year. In the U.S., the company only offers one electric car (the Chevy Bolt) and one plug-in hybrid. It’s planning to release electric SUVs and pickups but has not disclosed when those will come to market.
It’s an illustration of the difference that policy can make. China, through national policy, has aggressively supported a shift to what it calls “new energy” vehicles, at the same time the Trump administration works to roll back clean car standards. What’s happening in China helps make the case that the Green New Deal—which calls for a transition to zero-emissions vehicles amidst a full decarbonization of the economy—isn’t just about climate change but opportunities for businesses and jobs to grow. The shift is already underway but could happen more quickly with the right policy, says Hal Connolly, senior vice president of programs at the nonprofit Climate Reality Project. “I think the transition’s inevitable,” he says. “But in order to get it as fast as we want, we really are going to need to pull some policy levers. And it’s not just about addressing the climate crisis, which is, of course, paramount and critical, but it’s also about American competitiveness.”
This story is part of our series A Green New Deal for Business, looking at how the environmental and economic aims of the resolution might transform industries in the U.S. You can read more here.
That’s true not just for cars and passenger trucks but across the transportation sector, from the airline industry to public transportation to the millions of trucks that deliver goods. As companies work to reduce emissions—whether they’re building electric planes or electric scooters—they also have an opportunity to address inequality. The changes that the Green New Deal spell out would create a vast array of new and well-paying jobs that could help even out the economy. And rapidly scaling up clean transportation options can create better access for people currently underserved by transportation options. Under the Green New Deal, decarbonizing transportation could function as a lever to address so many other issues facing the U.S. today.
Electrification is the future that’s already here
To tackle climate change and avoid its worst impacts, a UN report last year said that the world needs to radically transform to a zero-emissions economy by mid-century, meaning that every industry needs to begin to change now. By 2030, global emissions need to be 45% lower than 2010 levels (as of 2018, they were at an all-time high). This is the science that underpins the urgency of the Green New Deal and makes it clear that the time for incremental tweaks and changes is long past.
In the U.S., transportation is now the leading source of emissions. Within transportation, the vast majority of those emissions come from passenger cars and trucks, followed by larger trucks and semis and then airplanes. The Green New Deal doesn’t outline specific policies but sets out a general goal to “overhaul” transportation to eliminate emissions “as much as is technologically feasible.”
The largest part of the problem—cars and light trucks—could already feasibly change now. The shift is already beginning. “I think we are actually closer to the electrification of transportation than a lot of people think we are simply based on cost,” says Geoff Eisenberg, a partner at Ecosystem Integrity Fund, a venture capital fund that invests in companies working on environmental sustainability. Batteries, the most expensive part of an electric vehicle, have fallen in cost at least 85% since 2010. Deloitte predicts that the total cost of owning an electric car will be as cheap as a gas or diesel car by 2022 even without subsidies.
Bloomberg New Energy Finance predicts that the sticker price of larger electric vehicles in Europe will be as cheap as other cars by the same year. Electric cars also have other advantages for drivers, including the fact that their fewer moving parts means less need for maintenance. If a network of EVs can double as storage by attaching their batteries to the electric grid when they’re not in use—something that’s needed as the grid shifts to renewable energy like solar that isn’t available all the time—it’s possible that car owners could eventually also get paid for that service by utilities. A shift to autonomous cars could also force a shift to electric cars, because all of the controls (from electric steering to brake by wire) can be controlled through a single source, making it most efficient for an autonomous “brain.” Autonomous cars could drive costs down so much that people choose to use electric robo-taxis instead of owning cars in a decade.
A fast transition could mean good business
Automakers, too, believe that future vehicles will be electric. “General Motors believes in a world of zero emissions with a vision for an all-electric future, driven by battery electric and fuel cell electric technologies,” says Doug Parks, vice president of autonomous and electric vehicle programs at GM. Ford is spending $11 billion over the next few years to launch 40 new electric and hybrid models—though most of them will launch in China. The company also invested in Rivian, a startup making an electric pickup, and plans to make an electric version of the F-150 truck. Toyota plans to bring 10 new electric vehicles to market over six years. Volkswagen is planning 70 new electric models over the next decade. Referring to Volkswagen’s pledge, which will bring 22 million all-electric vehicles to the market, Green New Deal coauthor Senator Ed Markey says, “that wasn’t on the scorecard last year.” He adds that the framework, though not yet policy, is already spurring manufacturers to make changes.
Still, fully electric cars make up less than 0.05% of new car sales now, and in a recent survey, only 20% of Americans said that they’d be interested in buying an EV in the future—more than ever before but still a minority. By 2030, the International Energy Agency predicts that electric vehicles could account for more than 30% of sales in the U.S., but again, most cars would still run on fossil fuels. Stronger policy could speed up adoption by supporting a larger network of electric chargers or new incentives for manufacturers and buyers.
It could also help ensure that the transition happens equitably. “When we talk about electric vehicles, we’re always thinking about how can we leverage those as tools for social justice,” says Joel Espino, the environmental equity legal counsel at the nonprofit Greenlining Institute, noting that low-income communities suffer from the worst air pollution from cars and are also hardest hit by fuel costs. One program in California pays low-income drivers in the most polluted areas up to $9,500 to replace old cars with electric cars (a used Nissan Leaf can sell for $10,000); another is bringing shared electric cars to a redesigned housing project in the low-income neighborhood of Watts. Both are examples of the type of policy that could help speed EV adoption nationally and support equity for low-income communities of color—one of the principal aims of the Green New Deal.
For car companies, strong policy could help ensure that American jobs grow, another aim of the Green New Deal. If the transition is inevitable, the countries that move fastest can lead globally, and those that are slower risk losing jobs, from engineering and design to manufacturing, to other locations. Connolly points to what happened with the solar industry, where China made a concerted effort to dominate. “We have over 200,000 solar jobs now in the United States, and that’s incredible,” he says. “But China has 2.2 million solar jobs, and that’s an opportunity that we missed out on by not competing. My concern is that we could be facing the same sort of situation with vehicles.” In fact, he argues, the situation could be worse. “Unlike solar, where we were going from zero jobs to 200,000, we’re talking over seven million U.S. jobs that could be threatened if we don’t take the lead.”
Related companies, like battery manufacturers, could also create new jobs; if electric vehicles are sold in meaningful numbers, we’ll need far more factories making batteries. Right now, Tesla is the only company making batteries in the U.S. In 2018, the company reported that it had supported more than 50,000 jobs in California in the previous year and contributed more than $5 billion to the state’s economy.
Beyond cars: How the whole industry will change
The Green New Deal could also help grow businesses and jobs in parts of the transportation sector that are more difficult to transition to zero emissions, like air travel. “It gets harder the heavier the vehicle, just based on physics,” says Eisenberg. Large jets are especially challenging, but a handful of startups are already working on electric or hybrid-electric technology for small planes that could make regional flights. “I think that that’s something that could get a five-year head jump from something in the Green New Deal,” he adds, referring to government support or subsidies that might be included once the policy is more fleshed out. Something similar could happen for large trucks; electric semis are already poised to make shorter trips. Other startups are working on solutions for longer-distance travel, including systems that would let electric trucks swap batteries en route so they don’t have to stop to charge and new designs that use hydrogen fuel cells to avoid some of the challenges of battery electric trucks.
High-speed rail, which the Green New Deal mentions as an important part of the transition, could help address the problem of long-distance passenger trips as airplanes improve. Here, too, China has pushed faster: by the end of the year, it will have 20,000 miles of high-speed rail, two-thirds of the total that exists in the world. The U.S. has none, if high-speed rail is defined as trains that can travel faster than 155 miles per hour. (In the Northeast, the Acela train travels 150 miles per hour for a short distance.) A robust high-speed rail network would also impact businesses. “If you’re a business in Philadelphia and you had high-speed rail lines where people from Pittsburgh and Boston and D.C. could get to Philadelphia in 40 minutes by train, think of how much more talent you’d have access to,” says Connolly. “It really is a competitiveness issue, too.”
Within cities, the Green New Deal also calls for better public transportation as another key way to reduce pollution from cars by helping people drive less. That will involve massive investment—even in New York City, with arguably the best public transit in the country, the MTA needs to spend $60 billion to get to a state of good repair. Buses are already shifting to electric because the long-term cost of electric buses is cheaper; companies like New Flyer, founded in 1930, now believe that it’s possible all buses could be electric in a decade. Companies like California-based Proterra are quickly growing. But they could grow faster with more policy support. Connolly notes that Washington, D.C., has a single electric bus now; Shenzhen, China, has an entire fleet of 16,000.
Building better public transit infrastructure, from bike lanes to subways, can also create more jobs and transform neighborhoods. “It’s a huge spur for economic development in cities that do it right,” says Sonia Aggarwal, vice president of the nonprofit Energy Innovation. It also directly benefits companies like Lyft and Uber that are investing heavily in urban scooter and bike-share systems. Policy could help ensure that transportation improvements are prioritized in communities that currently lack access, or those in which people struggle most with the cost of commuting to work. Often, these are low-income communities of color, and ensuring they’re brought into the fold of benefits created by decarbonizing the economy is a core tenet of the Green New Deal.
For companies, she says, the changes that can come from the Green New Deal—or some variation on it—can offer meaningful benefits. “I think they should be thinking about it, preparing for it, and also looking for ways to take advantage of it,” she says. “It’s actually a huge opportunity to remake our entire transportation system from the ground up. That’s a huge business opportunity. If I were working at a car company or a public transit company right now, I’d be pretty excited about the opportunity that lies inside this.”