Is the EV transition inevitable?

Electric cars are, on average, more expensive than their gas-powered counterparts. Now, the Trump administration wants to roll back government incentives that have been luring buyers to take the EV plunge.

Add to that range anxiety – an uneven availability of charging options – that have kept other buyers from considering an EV as their next car.

But to hear Wall Street Journal automotive reporter Mike Colias tell it, the transition from gas to electrics will happen. In fact, he argues in his new book, it’s inevitable.

The book, “Inevitable: Inside the Messy, Unstoppable Transition to Electric Vehicles,” argues that other countries’ drivers have embraced a growing number of technologically advanced, energy-efficient options, and it’s only a matter of time before U.S. manufacturers and drivers do the same. Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: Let’s start with that title. At a high level, why is a transition to electric vehicles inevitable?  

Mike Colias: Well, right now it’s kind of ugly in the U.S. I’ve heard people call it “EV winter.” Sales aren’t materializing quite like the carmakers thought it would.

Several years ago we had tons of enthusiasm and buzz around EVs. A lot of the traditional automakers were finally joining Tesla and putting out some pretty cool, stylish new models. And there were waiting lists and people were paying above sticker price for them. And that kind of lasted a few years.

Then it faded a bit starting, I’d say, in the middle of 2023. We started seeing signs that we’re still growing, just not as fast as the companies expected. And even last year, U.S. sales were still up about 10%. But it has certainly slowed down. 

The messy part now is that the companies are losing billions of dollars. As you mentioned, the Trump administration’s coming in. All that’s like a really kind of grim backdrop, you might think.

Was this a fad and it’s just going to go away? I think there’s a few reasons for why it’s not, but the main one I would point to is that we’re seeing a very narrow lens on this story right in the U.S., where we’re lagging behind many other developed countries in terms of adoption. 

About 10% of new car sales are EVs or plug-in hybrids. Places like China, it’s approaching 50%. They’re by far the leader. But even in Europe, it’s 20 to 25%.

So I think if you’re GM or Ford and you see it’s going a little bit slower in your market than you expected, you can’t just kind of bury your head in the sand because you know that eventually you’re going to have to compete on EVs on a global stage.

Let’s talk more about China. It’s a key player in EVs. And though the country’s vehicles are not allowed in the U.S., they’ve been building this industry for 30 years.

What should we know about China’s approach to EVs and how it’s been different than U.S. and even European automakers? 

Yeah, this was really a fascinating aspect that I was able to research – just how China has emerged here and really, I mean, it’s a pretty young car market in general.

It really only started making cars in the ’90s and it kind of invited in the big global automakers, GM and Volkswagen and Toyota. They all came in, set up partnerships with Chinese companies. And the big foreign companies dominated that market for decades. And the Chinese automakers really tried to compete. And they eventually decided “we can’t.”

It wasn’t like Japanese carmakers, even Koreans, eventually started making excellent-quality cars. The Chinese quality wasn’t very good. They couldn’t compete on internal combustion technology. Engines and transmissions is really complex stuff.

They made a decision kind of in the early 2000s, they being Beijing and the government: “We’re going to leap ahead on EVs. And we don’t think that the big global automakers will follow us because all their profits are tied to gas engine cars.”

And so they put a massive thumb on the scale, and started funding incentives for consumers to buy electrics and incentives for companies to make them. They invested in charging infrastructure. Today, there’s 20 to 25 times more fast chargers in China than in the U.S.

And so really, you mentioned the two big barriers to adoption are price and charging infrastructure. China is an example of a market that has largely solved those two problems. And now almost one out of every two car buyers in China are choosing an EV. 

Back here in the U.S., Tesla has already come up in this conversation. And Elon Musk’s role in the Trump administration, we should say, is controversial right now. But no matter what people might think of him, you write that Tesla’s innovation in EV manufacturing, in the car business as a whole, have resulted in big changes for the industry.

Can you talk about some of what Tesla has done that was revolutionary?

Yeah, I don’t think it’s an overstatement to say that we’re seeing this big push into EVs by the rest of the industry because of what Tesla is able to do. I mean, I would talk to auto executives for years and years and they just kind of dismissed Tesla. They never thought it could really push through to mass manufacturing of cars or turn a profit because [automakers] hadn’t really seen startup companies come into the car business. The barriers to entry were too high and the EVs have kind of knocked that down.

So Tesla comes in with a totally different approach, like a clean sheet approach to electric cars and builds from scratch. So not only is it electric, but also is very updatable. They’ve gotten the tech right. Wall Street started to notice in kind of like the late 2010s. And the stock valuation took off to a point where it was worth more than the ten biggest automakers in the world combined. And that’s still the case today. 

So yes, the traditional carmakers were getting pushed in this direction by emissions regulations in Europe and other places. But it was really Tesla’s emergence and Wall Street falling in love with that story I think that really got the companies. They finally decided, “we can’t ignore this anymore.” And then one after the other started declaring “we’re pushing toward an all-electric future.”

Well, as I’m speaking to you, I’m about 30 miles away from Tesla’s Gigafactory in Central Texas. Even though the Green New Deal is kind of up in the air, you write that one reason EVs might fare better than expected during the Trump administration is their connection to red states like Texas. Could you say more about that?

Yeah. So there’s a couple different ways that the government has been, under the Biden administration and before that, helping the EV industry and nurturing adoption. One is a $7,500 tax credit that a lot of electric car buyers can qualify for. The other is this much larger pot of money that’s available – it’s like over $100 billion to companies that build EV batteries in the U.S.

And so because of this big EV push that we’ve seen in the last five or six years, all the companies have invested in these massive battery factories in places like Tennessee and Kentucky and Georgia and Ohio. They’re calling it the “battery belt,” stretching from Georgia all the way up through to Indiana and Michigan. Most of these are red states.

And so, the Trump administration can’t just claw back this funding. It would have to go through Congress. And I think a lot of these red state lawmakers, even though they might have never voted for any Biden-era climate package, I think they’re going to probably feel inclined to look the other way and let that money stay in place because it’s nurturing tens of thousands of jobs in their districts and in these largely rural communities that have kind of been down on their luck.

I mean, it’s an example of bringing U.S. manufacturing jobs back to the U.S. because of the green economy push.

Well, battery technology plays a huge role, of course, in making EVs viable. From the people you’ve spoken to, what kinds of breakthroughs are these manufacturers looking for in the next few years?

Yeah, it’s interesting. You know, you hear about battery breakthroughs often through the years, and I don’t know that one ever just kind of overnight or in the span of a matter of months or even a couple of years dramatically brings down the cost of the battery, which is the biggest problem. It’s why the prices are so high.

They have come down. They haven’t come down far enough.

So there are a few things, like something called solid state, which replaces like a liquid electrolyte inside of the lithium ion battery into solid. And it’s supposed to have much longer range, be much lighter. That’s kind of the holy grail.

I still think it’s five to ten years out. I think that’s what most experts would say. So really, in the meantime, it’s just like this incremental grind. The companies are just trying to find every way to get tiny, tiny costs out. If it means taking some of the material out of the big battery pack that goes under the floor of the vehicle so it’s a little bit lighter and we can squeeze a few more battery cells… A lot of it has come down to how they’re putting the cars together, trying to do it more efficiently. 

And then there’s also a different chemistry. I won’t get too technical here, but it’s like an ion-based cathode instead of a more expensive one that uses nickel and magnesium and stuff. And that was really pioneered in China. And I don’t think initially we thought the U.S. would use this. It’s called LFP in the industry, but they’re now starting to bring these cheaper batteries over to the U.S. and they feel like that’s going to help get the cost down as well.

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Well, we’ve kind of touched on this, but I wonder if we could talk a little bit more about these legacy automakers. They’ve gone kind of back and forth in their ambitiousness, I guess, and they’re embracing an EV future.

As an example, can we look a little bit about General Motors and how they’ve been navigating the EV present and future? 

Yeah, sure. I mean, they’re a good one to look at because you can even go way back to like the late 1990s when they developed the EV1, which is sort of the first modern-day, potentially mass market electric car. They quickly decided they weren’t going to make money on that and they sort of scrapped the program immediately.

But GM also dabbled in hydrogen fuel cell cars, which is a form of an EV. And then they had this Chevy Volt, which was a plug-in hybrid, and then they had the Chevy Bolt. 

So GM is an example of a traditional automaker that’s really kind of shown promise in this area and just never really embraced it. And like we talked about, Tesla burst onto the scene. So they were one of the first to really – kind of in the late teens – say “we’re all in to develop this new EV system.” It’s that huge goal. They were going to be all-electric by 2035. I’m not sure they’ve amended that proclamation yet, but I don’t think anyone thinks that that’s going to happen at this point. 

So they had big plans, really kind of stumbled out of the gate. And we’ve seen this with a lot of the traditional car companies – it’s been harder to make this transition than I think they expected. It’s like this massive rewiring of supply chains. And it’s a different way of putting together a car. They’ve had some manufacturing trouble. 

So during those years of buzz and enthusiasm around EVs, they really kind of stumbled. Now they are putting out cars. They’ve kind of figured some of this out. They’ve got probably more models in U.S. showrooms than anybody.

But like everybody else, they’re losing a lot of money on it. So what they’re trying to do now is sort of calibrate like, “OK, how do we cadence this to meet the consumer where they are and not have too many of these that are sitting on dealer lots and don’t have buyers?”

Well, when it comes to what consumers want, you also say the trend toward EVs is also kind of combined with this trend towards computerization and other driver tech. Could you go into that a little bit more? 

Yeah. And I think this is, again, one of the things that the industry is still chasing Tesla on.

I mean, we talked about the sort of “from-scratch” approach. You know, cars for years, and still today, are controlled by dozens of these little electronic control units that one might oversee the steering and another might be in control of the engine. And what Tesla did is really kind of centralize that in sort of one brain. And so that’s why it’s so much easier for Tesla to fix things through just like a remote software update. 

They came out with a new car several years ago, and I think Consumer Reports complained that the braking distance wasn’t good enough. And Tesla just sent an update overnight and fixed the problem.  Those are the kind of things Tesla’s been doing for years.

The industry’s trying to keep up, but I think that is the battle. This is another reason why I don’t think this is just going to fade away, the EV story, is because EVs allow the companies to do these types of things – add self-driving features and hands-free – different semiautonomous features that people want. Digital content to the car. All that stuff you can do with a gas-powered car, but it’s a lot easier or more efficient to do with an EV.

So I think the EV story sticks and then the next race is really all of the software and digital stuff that you’re going to be able to beam down to the car.

I’d like to end where we began – with that title: “Inevitable.” How long do you think it will be before the majority of drivers in the U.S. are buying EVs? Are there tipping points we should be watching for? 

Yes. So this has been a hazardous thing to drink. A lot of people have gotten this wrong. But I think conservatively, a lot of of analysts see – and I kind of think I agree with some of these ranges – is by the end of this decade, so 2030, if we’re at 10% now, I think we’ll probably [be] in the neighborhood of 20%. 

And then, middle of next decade, 2035, I could see it being around a third. A lot of experts see 40%. So I think 2040 is where you start to approach half the market. But this thing has gone faster and slower at different times than people expected. So I think really it just comes down to cost and in charging infrastructure and there’s billions of dollars going into that getting better. 

It still has a long way to go. We still need to figure out what to do about people who live in apartments and condo buildings – it’s a lot harder to own an EV. Highways – obviously you can road trip in an EV, you’ve just got to plan ahead and pack your patience because it’s going to take longer to charge.

I mean, once we start to see that fill out and the prices come down to comparable to gas-powered cars, I think you might see a tipping point, because that’s what we’ve seen in other places like China. 

Well, I’ve got to follow up. I wonder, when you think about this tipping point towards EVs, are you including hybrids in that or are people going to really need to make the leap all the way to an electric vehicle? Are hybrids just this stopgap measure? Or will they be part of the long-term picture? 

I do think that hybrids will be part of the long-term picture.

There’s two different breeds of hybrid. One’s just a traditional hybrid. It’s a small battery pack with an electric motor that just helps the gas engine. It doesn’t power the car in electric mode fully. And it’s a great option. It gets maybe 35% better fuel economy. It feels a little peppier. And that’s like the old Prius. The original Prius is kind of what was the pioneer. And now those are across much of the industry. 

Many automakers have a hybrid version of almost every car they sell. Like that’s Toyota today. I think that’s great, and a lot of people that used to have a stigma – I mean, “a Prius is like only for environmentalists.” And today, there’s no stigma.

I think that normalization starts to happen with EVs, but there’s also a plug-in hybrid, which is you can go 30 or 40 miles or so on electric range fully, so you can get around town without using any gas. You can come back, you can charge it, do the same the next day. But you still have that backup gas engine. 

That’s a pretty small part of the market now. It’s growing. And I think a lot of people who are interested in EVs are kind of taking that route – not ready to make the leap fully. And that is, I think, a good way to sort of get your feet wet with the idea of driving an electric. So, no, I think the hybrid story is here to stay for quite a long time. 

And finally, I’ll just say that for consumers, there’s going to be a lot more to sort of consider and choose from when you go into a showroom in the next few decades. I mean, the gas car’s going to be around for a long time, but you’re going to have all these other options I just talked about.

And so you’re going to have more to decide than just the paint color or the engine size. There’s going to be a lot of choice out there. And I think that’s a good thing from a consumer standpoint. 

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