Within a historical situation in which cars are necessary for many Americans, but in which there is growing awareness that oil is a limited and diminishing resource, the electric car would seem to be a highly promising invention. This technology, though, has been surrounded with controversy and debate over the past several years. The purpose of this research paper is to develop an overview of the rise of electric cars. The research paper will begin with a short history of the technology, including the rise of Tesla Motors to prominence within the industry. Then, it will consider three elements of the regulatory battles that have surrounded the electric car. The first consists of efforts to make electric cars more available and desirable to consumers; the second consists of the antagonism between electric cars and Big Oil; and the third consists of Tesla’s sales model, which diverges from the sales model utilized by other auto manufacturers. This sample research paper provided by Ultius will provide an overview of these three regulatory battles.
A short history of electric cars
As the U.S. Department of Energy has indicated, the electric car actually has a longer history that the average person may be given to expect. As the agency has written:
“Here in the U.S., the first successful electric car made its debut around 1890 thanks to William Morrison, a chemist who lived in Des Moines, Iowa. His six-passenger vehicle capable of a top speed of 14 miles per hour was little more than an electrified wagon, but it helped spark interest in electric vehicles” (paragraph 6).
Moreover, it seemed that the electric car had quite good prospects for the future: at the time, it had significant advantages over the gasoline and steam alternatives that were available for consumers. If history had turned out differently, then electric car technology could well have become far more developed at a considerably earlier stage of the history of the United States.
The impact of the Model T
As it stands, though, the invention of the Model T by Henry Ford proved to be enough to tilt the scales in favor of the gasoline-powered car. Due to the highly efficient production model pioneered by Ford, it became possible for the first time to make gasoline-powered vehicles widely available to the general American public; and the prices of these vehicles were significantly lower than the prices of their electric counterparts. The laws of supply and demand thus led auto manufacturers to abandon the electric car and instead compete with Ford in developing high-quality gasoline-powered vehicles. Again, an important point here is that electric cars were abandoned not because of any intrinsic issues regarding technological feasibility but rather primarily for economic reasons.
The rise of Tesla
Electric cars have, of course, experienced a resurgence over the past decade; and this has largely been led by the company Tesla Motors. As the CEO of the company reported on the 17th of March 2008:
“We have obtained all the required regulatory approvals for the sale of the Roadster in the US and delivered the first production Tesla Roadster” (Drori, paragraph 2).
Just as the original obsolescence of the electric car was driven primarily factors concerning the American economy, so was the recent resurgence of the technology. The economic downturn of the last several years, along with increasing concern over the finite supply of oil in the world (and the foreign policy implications of this situation), have led to a greater demand for electric cars within the nation. Tesla has played a pioneering role in making the electric car widely available to the American population, in an analogous sense to how Ford first made gasoline-powered vehicles available to the general public. However, there has been significant conflict and debate within the policy sphere regarding regulations for electric cars within the nation. The present essay will now turn to a discussion of three fronts of these regulatory battles.
1. The push for electric cars
One of the main legislative initiatives that is encouraging the rise of electric cars within the nation consists of regulations and initiatives that in fact require auto manufacturers to develop and sell low-emissions vehicles. For example, Ramsey and Rogers have reported on regulations in the state of California to this effect; and they have pointed out that
“the Obama administration also is rewarding auto makers for offering more electric cars under fuel-efficiency rules approved this year. By 2025, car makers’ vehicles fleets must average 54.5 miles on a gallon of gasoline, a goal that can be achieved in part by offering more electric cars” (paragraph 9).
Such regulations clearly provide a context within which auto manufacturers feel experience pressures and incentives to contribute to the rise of electric cars within the nation. These initiatives are surely driven by two main factors:
- The environment – Gasoline-powered vehicles produce emissions, and these emissions pollute the air and contribute to global warming. So, insofar as the quality of the environment within the United States (not to mention potentially the long-term survival of the species) depends on cutting back on cumulative emissions within the nation, this would be an important reason to encourage the rise of electric cars.
- Foreign policy and international relations – Although the United States does have some oil reserves, the nation obtains much of its oil from abroad; and this compromises national autonomy and security. Lesser dependence on oil would thus translate to greater integrity in foreign policy formation, insofar as the United States will be more able to make decisions on the basis of principled strategy instead of simple economic need. Less vested interest in foreign oil reserves would allow the United States to tighten national security by proposing less of a threat to terrorist factions. The rise of electric cars would help meet this national objective.
2. Electric cars vs. Big Oil
There are also significant legislative hurdles that Tesla Motors and other companies must overcome before electric cars can develop a truly generalized presence within the nation. The main problem here is that the oil industry (or “Big Oil”) clearly has a stake in preventing the rise of electric cars: if electric cars became more prevalent, then the demand for (and thus the price of) gasoline would fall; and while this would be in congruence with national interests, it would clearly contradict the self-interest of Big Oil. As OPEC drives the economy of the Middle East, an entire region of the world stands to suffer. As Diamond has put it:
“Big oil’s ruthless supply and demand tactics have monopolized the entire industry by shredding competitors’ attempts to offer alternatives. Consumers are forced to surrender their right to choose due to the aggressive techniques being used by the oil industry to prevent the use of clean energy” (paragraph 1).
In short, Big Oil tends to use its power in order to prevent the rise of electric cars and maintain the status quo of the dominance of gasoline-powered vehicles.
The economic power of the oil industry
In general, the oil industry is able to do this because Big Oil has big money. This implies both:
- Capacity to monopolize the market
- Capacity to influence legislative through intensive lobbying activity
The result is that in order for newcomers to entry into the market and clean energy alternatives to emerge, it would likely be necessary for the government to develop regulations that prevent Big Oil from pursuing its own economic self-interest. Again, this would be justified insofar as becoming less dependent on oil is in fact a national security priority, which would mean that the self-interest of Big Oil could ultimately constitute a national security threat. This potentially opens up onto a broader political question regarding allowing the free market to follow its own logic versus regulating the market in the name of higher interests. Aside from the national security implications, the current situation also calls into question the old idea that free markets necessarily result in the greatest possible level of innovation: in this case, lack of regulation is in fact limiting possibilities for innovation. What is clear, in any event, is that
“there is $100 trillion of oil left in the earth, and they [Big Oil] plan to mine it—even if doing so will make the planet uninhabitable. Anything that could divert that cash away from them is a threat to be crushed” (Hari, paragraph 13).
Although, this language is somewhat strong, it would seem to be a more or less accurate and objective description of Big Oil’s modus operandi. Under the Obama administration and its views on government spending (and under more liberal state governments in general, such as the government of California), it would seem that steps have been taken to establish the regulations that would be needed in order to create the right kind of environment for the emergence of electric cars. If the Republicans were to rise to power again, though, it is likely that they would attempt to reverse these regulations and create an regulatory environment that is more congruent with the interests of Big Oil.
3. Tesla’s sales model
Unlike all other auto manufacturers, Tesla seeks to sell its vehicles directly to consumers, bypassing the traditional mediation of car dealerships. As Morran has indicated, several states have banned this sales model and thus the sale of Tesla’s vehicles within their borders, including:
- North Carolina
- Virginia (paragraph 11)
This has largely been done under pressure from auto dealer associations who are obviously concerned that such a sales model would potentially render their services irrelevant. However, Tesla has clearly argued that the traditional sales model is not appropriate for the sale of electric cars, and that the proliferation of electric cars within the nation will require the emergence of a new direct sales model. Insofar as Tesla is correct, the decision of the states mentioned above to ban direct sales is a significant barrier against the rise of electric cars within the nation.
Returning power to the purchaser
At the ethical level, this issue can be conceptualized in terms of the right of free association: as Koopman has suggested, Tesla could be called a “free market antihero,” insofar as the company is advocating for the right of consumers to buy their cars in whatever ways they would like to buy their cars. Essentially, the current regulations follow the same logic as if the computer manufacturer Apple Inc. were told that it could only sell computers through third-party “dealers” and not through their own stores. Auto dealerships surely emerged at one point in time as a practical means through which the general public could access cars in an easy and reliable way. Now, though, the efforts of auto dealers to hold onto to their own power would seem to be undermining that very same consumer prerogative.
In summary, this research paper has discussed the rise of electric cars within the United States. It began with a historical overview of the technology, and then it proceeded to discuss three key fronts of the regulatory battles surrounding the rise of electric cars within the nation. Some of the key issues that are involved in these battles include:
- Environmentalism and emerging US environmental policy
- National security
- Free markets versus regulation (both in terms of regulating Big Oil’s pursuit of its own self-interest and in terms of bans on direct sales of electric cars to consumers)
In general, it would seem that electric cars manufacturers, led by Tesla, are in a good position to expand their operations and reach out to broader and broader segments of the general public with their technology. However, a great deal clearly hinges on the regulatory environment. If the national and state governments pass laws encouraging the proliferation of electric cars, then this could well happen in the near future; but of course, if they do the opposite, then the opposite could also occur.
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Diamond, Regina L. “Big Oil’s Stranglehold on America.” Student Pulse 3.1 (2011). Web. 15 Dec. 2014. .
Drori, Ze’ev. “We Have Begun Regular Production of the Tesla Roadster.” Blog. 17 Mar. 2008. Web. 15 Dec. 2014. .
Hari, Johann. “Big Oil’s Vendetta against the Electric Car.” Common Dreams. 7 Apr. 2014..
Koopman, Christopher. “Tesla: Free Market Antihero.” U.S. News & World Report. 30 Jun. 2014. Web. 15 Dec. 2014. .
Morran, Chris. “Michigan Joins List of Tesla-Hating States; Bans Direct Sales of Cars.” Consumerist. 21 Oct. 2014. Web. 15 Dec. 2014. .
Ramsey, Mike, and Christina Rogers. “California Spurs Electric Cars.” Wall Street Journal. 19 Nov. 2012. Web. 15 Dec. 2014. .
U.S. Department of Energy. “Timeline: History of the Electric Car.” The History of the Electric Car. 15 Sep. 2014. Web. 15 Dec. 2014.