I see and hear this argument often:
A mandate overrides market forces. Let the market decide between gas vehicles and EVs. Don’t force people to buy something that they don’t want. That is more like a dictatorship than a democracy. Capitalism – if you build something people like, they will come. We didn’t evolve from the horse and buggy to the automobile because people were forced to buy an automobile. It was because it was a better product that people wanted.
The argument overlooks several critical factors that have historically shaped the automotive industry’s approach to innovation and environmental responsibility. Here’s why simply letting supply and demand dictate production without any mandates is problematic:
- Market stability: Mandates provide clear goals for automakers, allowing for more stable long-term planning and investment.
- Historical resistance to change: Automakers have consistently fought against regulations aimed at improving vehicle safety, emissions, and fuel efficiency. Without mandates, they have often prioritized short-term profits over long-term societal benefits. Seat belts were first introduced by Saab in 1958. Despite these advancements, widespread adoption was slow. It wasn’t until 1966 that the U.S. Congress passed the National Traffic and Motor Vehicle Safety Act, requiring all automobiles to comply with certain safety standards. Even then, the first compulsory seatbelt law for drivers and front-seat passengers wasn’t enacted until 1970 in Victoria, Australia. In the United States, mandatory seatbelt laws weren’t introduced until the 1980s, and they faced significant opposition. Some consumers even went to court to challenge these laws, demonstrating the cultural resistance to this safety measure.
- Market failures: The true cost of emissions and pollution is not reflected in the price of vehicles, leading to a market failure where consumers don’t bear the full environmental cost of their choices. Big automakers lobbied hard against change because they make record profits from the old technology – and didn’t want to invest heavily in R&D to make an entirely new vehicle. GM, Ford, Stellantis, Toyota and Honda spent millions lobbying against change.
- Energy independence: Promoting EVs through mandates can reduce dependence on foreign oil, enhancing national security and economic stability.
- Slow adoption of new technologies: Without regulatory pressure, automakers have been slow to adopt new technologies that could reduce emissions and improve fuel efficiency.
- Consumer information gap: Many consumers may not fully understand the long-term benefits of cleaner vehicles, leading to choices that may not align with broader societal goals.
- Industry inertia: The auto industry has significant investments in ICE technology, creating a natural resistance to change without external pressure.
- Job preservation and creation: Mandates can help ensure a smoother transition for workers in the auto industry, preserving jobs while creating new ones in emerging technologies. The transition to EVs created new jobs in manufacturing, engineering, and related industries, potentially offsetting job losses in traditional automotive sectors. I suspect Vo-Techs have been very busy training tomorrows electricians.
- Innovation incentives: Regulations and mandates often spur rapid innovation, leading to improvements in battery technology, charging infrastructure, and overall vehicle performance. This benefits consumers.
- Global competitiveness: As other countries implement stricter emissions standards, mandates help ensure U.S. automakers remain competitive in the global market. I believe due to resistance in the US we’ve just about lost our place in the global automotive market. As other countries invest heavily in EV technology, mandates would have ensured U.S. automakers remain competitive in the global market.
- Long-term cost savings: While initial costs may be higher, mandates often lead to long-term savings for consumers through improved fuel efficiency and lower maintenance costs.
- Public health concerns: Vehicle emissions contribute to smog / air pollution, which has significant health impacts. Mandates can help reduce these health risks more quickly than market forces alone. Remember the photos of California where smog from automobiles covered towns. Remember the videos from the Olympics in China a few years ago? Mandates make for faster progress and often very necessary change.
- Would America have put a man on the moon without a presidential mandate? It is highly unlikely that America would have put a man on the moon without a presidential mandate, at least not within the timeframe it did. The Apollo program’s success was largely due to the political will and resources mobilized by President Kennedy’s ambitious goal.
As for the horse & buggy, it didn’t take much motivation as people were tired of stepping in piles of horse dung and having to shovel piles and piles of horse dung. The Government did however begin playing a role – regulations to address safety concerns and manage the growing number of automobiles on the roads.
- Implemented speed limits.
- Requiring driver’s licenses.
- Mandating safety equipment like headlights and rearview mirrors.
- Determining right-of-way rules for cars, horses, and pedestrians.
- Regulating road usage for different types of vehicles.
In conclusion, while market forces play a crucial role, history has shown that mandates are often necessary to overcome industry inertia, address market failures, and achieve important societal goals such as reducing emissions and improving public health.