The bipartisan compromise on infrastructure cuts in half President Joe Biden’s call for $15 billion to build 500,000 electric vehicle charging outlets, raising the stakes as the administration seeks to win auto industry cooperation on anti-pollution rules to curb climate change.
The Senate legislation provides $7.5 billion in federal grants to build a national network of charging outlets, an amount that analysts say is a good start but isn’t enough to spur widespread electric vehicle adoption.
Still, even the smaller amount can be effective if they’re placed in the right locations, said Jessika Trancik, a professor at the Massachusetts Institute of Technology who studies EV charging.
“If there’s half the funding, you have to be twice as strategic and twice as deliberate,” she said.
Biden has made combating climate change a policy priority, and the broad compromise bill reached after intense negotiations takes some steps toward his goal of reducing greenhouse gas emissions in half by 2030. Widespread availability of electric charging stations in communities big and small is the cornerstone of his efforts to switch America’s car and truck fleet from polluting combustion engines to zero-emissions electric. Many drivers are hesitant to make the switch for fear of running out of electricity with no charging station in sight.
The back-and-forth in a closely divided Congress over EV funding reflects a tricky balance for the auto industry and the Biden administration. The transportation sector is the single biggest U.S. contributor to climate change.
Currently there are just over 43,000 charging stations in the U.S. with more than 106,000 outlets, according to the Department of Energy. Fully electric vehicles represented just 2.2% of U.S. new vehicle sales during the first half of this year, or about 1.1 million vehicles on the road.
The Biden administration had planned to build a half-million charging units around the country to fulfill a campaign promise and nudge a significant number of Americans into zero-emission vehicles by 2030. It intended to tap an additional $7.5 billion in low-cost loans from an infrastructure bank of public-private investment that was to be created in the Senate bill.
But the president’s plans evaporated Wednesday after lawmakers haggling over wage laws for transportation projects covered by the $20 billion bank gave up and eliminated it. The White House now says it won’t set a specific target for charging units but hopes to find other funding to cover the gap.
“The future of cars is electric, and we’re ready,” Transportation Secretary Pete Buttigieg tweeted Wednesday after the bipartisan deal was announced.
The Associated Press reported Tuesday that the Biden administration plans to issue proposed rules as early as next week on tailpipe emission standards, including nonbinding language that at least 40% of U.S. sales be electric vehicles, according to government and industry sources who spoke on condition on anonymity to reveal details that are still being finalized.
While Ford CEO Jim Farley announced Wednesday that he expects 40% of the company’s sales to be fully electric vehicles by 2030, other companies are still weighing whether to endorse that figure. Stellantis, for instance, has has committed to a 40% U.S. sales figure, but counts “low-emission vehicles” such as gas-electric hybrids in its mix.
In the past year, U.S. automakers have accelerated announcements of new electric vehicles, spending billions to develop them. Some, including General Motors and Volvo, have set goals of selling only electric passenger vehicles by 2035.
But nearly all have said it will take government incentives to persuade people to switch to the new technology, at least until EV prices fall as more are produced and sold. And they have said that government spending on charging infrastructure is essential to overcoming consumer anxiety about running out of electricity.
Biden had originally proposed $174 billion in his Build Back Better plan to boost the EV market, including tax credits and other incentives to spur consumers to embrace the newer technology. While only $7.5 billion of that in the bipartisan bill will go to charging stations, Democrats are expected to add back roughly $100 billion in EV tax credits in a separate $3.5 trillion “reconciliation” bill. Support from all 50 Democratic senators will be needed for that bill to pass.
“If a reconciliation bill emerges with 10 digits of guaranteed EV rebate money, that will go a long way towards reassuring automakers that they can ramp up production,” said Jeff Davis, a senior fellow at Eno Center for Transportation.
Automakers have made it clear the government needs to help make the switch away from internal combustion engines.
“Much of this transition is going to depend on government support, infrastructure build-out,” Ford’s Farley said during its second-quarter earnings conference call Wednesday.
According to a Consumer Reports survey last December, anxiety about limited range and the availability of charging stations were among the top concerns consumers had about owning an EV.
Currently electric vehicle owners charge their vehicles at home 80% of the time. But that is likely to change as more people buy EVs who don’t have a garage to house a charging station.
New chargers should be located based on models that predict where they will be needed, MIT’s Trancik said. They should be placed along travel corridors for people going long distances, as well as in areas where people spend lots of time, such as hotels, apartment building parking lots and even along public streets, she said. The government also will have to raise incentives to get charging stations built in less-populated rural areas, she said.
Direct current fast chargers, which can charge a car up to 80% of its battery capacity in 20 to 45 minutes, are quite expensive, costing $40,000 to $100,000. So those should be placed where people need to charge quickly and get back on the road.
Chargers that run on 240-volt electricity similar to what powers a clothes dryer are far cheaper, around $2,000. They take around eight hours to fully recharge a car. Trancik says they can be used effectively at much lower costs in areas where people stay for long periods of time.
Ford to add 10,800 jobs making electric vehicles, batteries
Ford and a partner company say they plan to build three major electric-vehicle battery factories and an auto assembly plant by 2025 — a dramatic investment in the future of EV technology that will create an estimated 10,800 jobs and shift the automaker’s future manufacturing footprint toward the South.
The factories, to be built on sites in Kentucky and Tennessee, will make batteries for the next generation of Ford and Lincoln electric vehicles that will be produced in North America. Combined, they mark the single largest manufacturing investment the 118-year-old company has ever made and are among the largest factory outlays in the world.
Notably, the new factories will provide a vast new supply of jobs that will likely pay solid wages. Most of the new jobs will be full time, with a relatively small percentage having temporary status to fill in for vacations and absent workers.
Together with its battery partner, SK Innovation of South Korea, Ford says it will spend $5.6 billion in rural Stanton, Tennessee, where it will build a factory to produce electric F-Series pickups. A joint venture called BlueOvalSK will construct a battery factory on the same site near Memphis, plus twin battery plants in Glendale, Kentucky, near Louisville. Ford estimated the Kentucky investment at $5.8 billion and that the company’s share of the total would be $7 billion.
With the new spending, Ford is making a significant bet on a future that envisions most drivers eventually making the shift to battery power from internal combustion engines, which have powered vehicles in the United States for more than a century. Should that transition run into disruptions or delays, the gamble could hit the company’s bottom line. Ford predicts 40% to 50% of its U.S. sales will be electric by 2030. For now, only about 1% of vehicles on America’s roads are powered by electricity.
In an interview Monday, CEO Jim Farley said it would be up to the workers at the new plants to decide whether to be represented by the United Auto Workers union. That question could set up an epic battle with union leaders, who want employees of the future to join the union and earn top UAW production wages of around $32 per hour. It represents a high-stakes test for the UAW, which will need jobs for thousands of members who will lose work in the transition away engines and transmissions for petroleum-powered vehicles.
Ford’s move also could put the company at odds with President Joe Biden’s quest to create “good-paying union jobs” in a new, greener economy.
Farley said it’s too early to talk about pay or unionization at the new factories. He stressed that Ford will maintain a geographic manufacturing balance when the company’s investments in Ohio and Michigan are included. Ford and General Motors have UAW-represented plants in Kentucky and Tennessee, states where it is common for political leaders to actively campaign against unionization.
“We love our UAW partners,” Farley said. “They’ve been incredible on this journey of electrification so far. But it’s up to the employees to decide.”
Just four months ago, Ford said it would build two new battery plants in North America. But Farley said demand for the electric Mustang Mach E SUV and over 150,000 orders for the F-150 electric pickup convinced the company to increase battery output.
Farley said Ford intends to lead the world in electric vehicles, a title now held by upstart Tesla Inc., which is adding jobs at a third factory now under construction near Austin, Texas.
Ford picked the Kentucky and Tennessee sites in part because of lower electricity costs, Farley said, as well being less exposed to flooding and hurricanes than other states. Battery factories use five times the electricity of a typical assembly plant to make cells and assemble them into packs, so energy costs were a big factor, Farley said.
The company also needed huge tracts of land for the plants that weren’t available in other states, Farley said.
Both Southern states also have skilled labor forces and are willing to train workers for the new jobs, he said.
“These jobs are very different than the jobs we’ve had in the past,” Farley said. “We want to work with states who are really excited about doing that training and giving you access to that low energy cost.”
The Tennessee Valley Authority, which serves the Memphis-area site, sells industrial electricity at a price that’s lower than 93% of competitors nationwide, said CEO Jeff Lyash. Rates have stayed flat for the past decade and are planned to stay flat for the next 10 years, he said.
Combined, the three new battery plants will be able to supply enough batteries to power 1 million vehicles per year, about 129 gigawatts of power, Ford Chief Operating Officer Lisa Drake said.
Shares of Ford Motor Co., which is based in Dearborn, Michigan, rose more than 4% in extended trading after the new factories were announced late Monday.
Reaction from the union was tempered Monday, with officials seemingly optimistic about organizing the factories.
“We look forward to reaching out and helping develop this new workforce to build these world-class vehicles and battery components,” union President Ray Curry said in a statement.
Kristin Dziczek, a senior vice president at the Center for Automotive Research who follows labor issues, said the union’s future depends largely on organizing the new plants.
“It’s imperative that the UAW organize these if they’re going to have a stake in the electrification of this industry,” she said.
Union representation of the plants could become a contentious issue in the next round of national contract talks with the union in two years.
When General Motors first announced joint venture battery factories over the past few years, its executives said workers would decide on unionization. UAW officials howled in protest. In May, GM said it would support union organizing at the plants.
The Kentucky site is only about 50 miles (80 kilometers) south of Louisville, where Ford has plants that make SUVs and trucks now powered by internal combustion engines. Ford wouldn’t comment on whether those plants eventually would make electric vehicles, but Dziczek said converting at least one would make sense. One plant makes the Ford Escape small SUV, in the most popular segment of the U.S market, she said.
Kentucky Gov. Andy Beshear said in an interview that Ford’s 5,000 jobs at the Glendale battery plants is the largest single employment announcement in state history. And he said it will also bring jobs with suppliers that make components for the plants. Earlier this month state legislators approved $410 million worth of economic development incentives.
Beshear said Ford would get a loan of up to $250 million to draw on through construction. It’s forgivable if the company hits completion milestones. The package also includes the cost of the Glendale land, plus up to $36 million in training incentives, he said.
Ford will formally announce the plants with ceremonies on Tuesday at both sites. In Glendale’s one-block downtown on Monday evening, there were no signs of pending dramatic changes in the economy from the new jobs. All was quiet in the town where the primary businesses are antique shops and corn and soybean fields that stretch in all directions.
The Tennessee assembly plant is to be built on a site about 50 miles (80 kilometers) east of Memphis that’s almost six square miles (15.5 square kilometers). Combined, the assembly plant, to be run by Ford, and the battery factory, would employ about 5,800 workers.
State officials have been trying to develop the site for years without success. Gov. Bill Lee said Tennessee offered Ford $500 million in incentives to win a contest with 15 other states. Lee said he is confident legislators will approve the spending.
GLENDALE, Ky. (AP)
Remote work is becoming the new norm, should tech industries be worried?
Back in 1822, Charles Lamb, British poet and essayist wrote in a letter to poet William Worsworth “You don’t know how wearisome it is to breathe the air of four pent walls without relief, day after day,” describing the agony he faces while working in the East India Company’s office located in the heart of London’s Leadenhall Street.
It’s safe to say Lamb would’ve enjoyed the COVID-19 pandemic that pushed workers into a work-from-home routine, liberated from what he coined as “official confinement.” Yet, this may not be the case any longer.
A new survey of 2,000 UK tech workers and employers by Hackajob’s marketplace researchers resulted in shocking findings.
Half of the employers who participated in the survey noted that it is extremely difficult to grow and enhance a strong team while working remotely, and 54 percent of the participants said having a distributed workforce caused a negative toil on the office culture.
However, tech professionals have a different perspective on the matter. Hackajob’s researchers found that only 22 percent of tech workers agreed that remote working has a negative impact, while 44 percent noted that there isn’t much of a difference.
The different findings mean one thing: businesses are increasingly facing challenges when trying to please their workers and ensure a productive workforce with the shift in job expectations.
Hackajob noted that 72 percent of the tech workers surveyed cited remote working as the main element they look for during a job hunt, while 67 percent said that they’re looking for different opportunities that don’t require remote work.
Co-founder and CEO of Hackajob, Mark Chaffey, made it clear that the increase in demand for tech workers might force businesses to reformulate their work culture, even though expectations of employers and employees “are not aligned at the moment.”
“Tech workers are in demand and our data shows it is a buyer’s market now, so employees seem to be in the driver’s seat,” Chaffey added.
For example, Microsoft recently warned that remote work can possibly have a harmful impact on workplace communication and productivity as it turns out that the tech giant’s own U.S. workforce was struggling with communicating back in March of last year when employees were forced to work remotely for the first time.
Yet, other tech giants are maneuvering their way around remote work in a different manner. Google has given its U.S. staff the option to work remotely at the expense of salary deductions.
In Hackajob’s survey, 53 percent of tech workers stated that they wouldn’t consider cutting their salaries to work remotely, in comparison to only 27 percent of participants who were okay with having potential salary adjustments.
“It will be interesting to see what shifts first and what shifts furthest, workers’ expectations about remote working or employers’ demands about being in the office,” Chaffey said.
New FTC memo will transform the way big tech operates
Federal Trade Commission (FTC) Chair Lina Khan recently publicized her policy priorities and vision in a memo that was sent out to staff members on Wednesday.
Supervised by five commissioners who vote on enforcement actions and policy statements, Khan set in stone the main priorities of the agency in the recent FTC memo: fixing power imbalances, reducing harm on the consumers, and targeting “rampant consolidation.”
Khan laid out the main focus of the agency, as well as how it can adjust its strategic approach to overcome issues born by “next-generation technologies, innovations, and nascent industries across sectors.”
FTC’s new list of priorities indicates that tech giants, even though none of them were named, will be under extreme scrutiny going forward.
The five principles outlined in the FTC memo are the following:
- Conduct a “holistic approach to identifying harms.” Khan noted that the agency should acknowledge that employees, private corporations, as well as consumers, can be equally harmed by antitrust and consumer protection violations. The famous antitrust lawsuits have previously emphasized strictly on consumer harm, as it was mainly concerned with how to price a product to ensure fairness. However, Khan argued in her memo that a more productive approach could be utilized to better assess harm by tech giants, which often offer free of charge platforms in exchange to high levels of engagement.
- Keep an eye on “targeting root causes rather than looking at one-off effects.” Khan explained that the FTC workers should examine how business models or conflicts of interest go against the law.
- Incorporate more “analytical tools and skillsets” for an overall assessment of business methods.
- Enjoy “forward-looking” and work on stepping up quickly when harm is done, this includes focusing on “next-generation technologies, innovations, and nascent industries across sectors.”
- Democratize the FTC through ensuring it’s “in tune with the real problems that Americans are facing in their daily lives.”
“Research documents how gatekeepers and dominant middlemen across the economy have been able to use their critical market position to hike fees, dictate terms, and protect and extend their market power,” Khan wrote in the memo, adding that “deeply asymmetric relationships between the controlling firm and dependent entities can be ripe for abuse.”
The FTC chairwoman also included non-compete agreements in her memo, which she says have the ability to restrict workers from which jobs they can take on, as well as impose restrictions on consumer’s right-to-repair. Apple has been criticized in the past for the limit it imposed regarding the number of times users can repair Apple devices they purchased.
Earlier this year, the FTC vocalized its intentions to fighting these restrictions.
“Consumers, workers, franchisees, and other market participants are at a significant disadvantage when they are unable to negotiate freely over terms and conditions,” Khan wrote in the memo.
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