General Motors' Transition to Electric Vehicles

Location 2: California

As the fifth largest economy worldwide, California has global influence and power. With global influence and power comes an opportunity to be leaders against climate change. The state of California has ambitious climate goals that often outpace the objectives of the United States at large— so in October, 2019 when Donald Trump set out to prevent the State of California in setting their own emissions requirements for vehicles, this may not have come as a surprise to Californians or climate conscious Americans. 

Since the  Clean Air Act of 1970   when California was authorized to regulate their own emissions standards, no President has attempted to repeal this privilege, making the litigation introduced by Donald Trump so shocking. According to  Ronald Brownstein, a Political Journalist for The Atlantic , Trump's decision to intervene with California’s jurisdiction may extend to dynamics that extend beyond an anti-climate change agenda. Brownstein states that Trump’s motivation can be understood through the lens of “three broad trends, including: blue-state resistance to Trump’s policies, the desire to undo Obama’s efforts to limit emissions and reduce climate change, and finally Trump’s effort to transfer resources from blue states to red states."

Whether or not these intentions were transparent to the American public and businesses, the litigation appeared to be advantageous to automobile manufacturers. When General Motors became aware of the Trump Administration’s intentions to pursue legal action against California’s freedom to set their own regulations, they aligned themselves with the pursuit.  Manufacturing cars is a difficult process . It takes specialized machinery, advanced technology, and intense preparation. At minimum, car models are manufactured for  four to six years . So, when car manufacturers hear talk of California setting state specific emissions regulations, worry presumably arises. Questions like “how would we possibly be able to manufacture to that standard?” are presumably asked. Considering the size of California, car manufacturers cannot afford to lose a population of buyers that size, so they must adapt. However, Donald Trump provided a potential avenue for resistance against the challenge, so General Motors backed the legislation. 

As an automobile manufacturer, General Motors is part of the industry responsible for 28% of global emissions, the sector with the largest contribution to climate change. By manufacturing vehicles, General Motors has been contributing heavily to greenhouse gas emissions and therefore climate change for the last 113 years and more recently was vehemently opposed in supporting California’s endeavors towards lower emissions. With that, it is safe to discern that General Motors’ decision to align themselves with the Trump administration illustrates the intentions of the company: to make money and above all else, stay in business.

Location 3: Resource Rich Communities

The United States has a fixation on personal vehicles. According to the Bureau of Transportation Statistics,  households on average have more vehicles than drivers . This is a baffling statistic, but nonetheless a testament to the United States’ deeply embedded dependence on personal vehicles. However, it is apparent that we are on the brink of a drastic change, a change not away from personal vehicles, but a change in the way they run. Electric vehicles are becoming increasingly popularized as an alternative to the internal combustion vehicle due to their lack of emissions and therefore environmental benefits. However, significant environmental damage occurs in the production of electric vehicle batteries that is being overlooked. 

Electric vehicles’ batteries are dependent on natural resources such as cobalt, nickel, and magnesium, among others. Cobalt is the highest in demand resource for electric vehicle batteries, and the  Democratic Republic of Congo has 2.57x more cobalt  than the next leading country. With projections indicating that there will be  18 million EVs on the road by 20 30, will the DRC be able to match the scale of production? This section focuses on the resource politics associated with the transition towards EVs on a global scale with a focus on the global South. 

Intense resource conflicts have plagued the world resulting in violence, environmental pollution, and pervasive inequalities. Up until a few years ago,  oil was considered the world’s most valuable commodity . Terms like  “oil war”  or  “petro-aggression”  are recognized by the general public and used most commonly to describe pervasive violence in states abundant with petroleum resources. Only in the last few years has  data been thought to replace oil as the world’s most valuable commodity.  

The transition facing the automotive industry reflects the larger transition of commodity values, where internal combustion vehicles connected to oil and electric vehicles to data. However, this is not to say there will be no associated conflicts with the transition away from internal combustion engines and towards electric power, and that data strays away from material resources. The transition merely shifts to a host of new and equally politicized conflicts and towards exploitation of different areas. 

One lens for understanding the political and economic dynamics associated with resource conflicts is the idea of the “resource curse.”  Resource curse  is the phenomenon that countries rich in natural resources (specifically fuels and minerals) are outperformed economically by countries with fewer natural resources. While this may appear counterintuitive, the resource curse phenomenon exists because of ideologies like  neoliberalism ,  neocolonialism,  and  capitalism  which emphasize freemarkets, commodification of goods and resources, and technological innovation. 

The market for electric vehicles is one instance of where the resource curse is manifested. With the exponentially increasing demand for electric vehicles, an undo demand is being put on the DRC while simultaneously perpetuating the DRC as a commodity dependent economy, creating little opportunity for upward mobility and further perpetuating economic and social vulnerability as well as a North and South divide. 

Unfortunately the oppressive dynamic between the United States and The Democratic Republic of Congo is not unique. Countries across the global South are subject to intense economic and political oppression motivated by principles of neoliberalism, neocolonialism, and capitalism. With lack of a clear and comprehensive process for how General Motors will ethically source the rare-earth materials necessary for high-scale production of electric vehicles, General Motors is merely shifting dangers associated with climate change from the global North to the global South. 

Location 4: China

With a population of nearly  1.4 billion , China is a desired market by producers across industries worldwide. China is the world’s largest automobile market creating a special desire to capitalize amongst automobile manufacturers. However, over the last decade China has taken preparatory steps over the last decade to become the world leader in electric vehicles. So, how much room is there for U.S and European manufacturers to capitalize on the Chinese market? 

China anticipated the global transition to electric vehicles and  began investing in infrastructure to support it as early as 2009 . Significant government support such as subsidies and incentives were issued to promote initial development of electric vehicles. On the production side, the Chinese government created  a quota for the percentage of electric vehicles that each company must adhere to avoid paying a fine.  One policy taken up by individual cities,  like Beijing , is prohibiting vehicles aside from electric ones from entering city centers. Another related policy is  limiting the days and times that internal combustion vehicles are allowed to travel on roads,  presenting obstacles for those who use internal combustion vehicles as their main source of transportation. One final policy implemented by the Chinese government is charging the steep price of  $12,000 for a license plate  on internal combustion vehicles. With all of these policies in place it is evident that electric vehicles are the most convenient and inexpensive option for a personal vehicle. 

China’s early investment in electric vehicles is evident through their sales comparative to the rest of the world.  In 2020 China sold 1.33 million electric  vehicles compared to the United States sales at about  296,000 . While China is the  world’s largest producer of electric vehicles , they are also the  world’s largest polluter of greenhouse gases , the largest contributor to climate change. However,  China pledges to be carbon neutral by 2060  and electric vehicles are one avenue for achieving this goal. 

The established infrastructure and policies associated with electric vehicles in China, the massive automobile market, and the pledge to be carbon neutral by 2060 creates the perfect storm for automobile manufacturers looking to expand their electric vehicle customer base. General Motors is one U.S based automobile manufacturer that is looking to capitalize on the Chinese market, but with the tight restrictions surrounding internal combustion engines, GM’s window was dwindling. General Motors has had a presence in China since the late 1990s with the creation of  SAIC GM , a joint venture between GM and China. This has proven advantageous since  General Motors’ largest market worldwide is China . However, GM must make the jump to manufacturing vehicles that adhere to the Chinese vision of an all electric future. 

The Chinese government is by no means reliant on any U.S or European manufacturer to achieve their transition towards electric. Chinese brands like  Nio  and  XPENG  are major brands that are exclusively electric and are even identified as  rivialing Tesla,  the brand to beat when it comes to electric vehicles. China is also equipped with  500,000 charging stations , while the U.S comes in at about  100,000 . It is clear that not only do brands like General Motors need to ramp up production of EVs to be competitive in the Chinese market, but the U.S must also increase the scope and investment of EV infrastructure. 

In 2020 General Motors sold  6.8 million vehicles  and only about  28,000  were electric. This number indicates the massive investment in electric vehicle infrastructure that must be made swiftly if General Motors would like to remain a player in the Chinese market. General Motors has extensive plans to pioneer electric battery production in the United States. GM recently teamed up with LG Chem with a  $2.3 billion investment  to begin manufacturing batteries for EVs, however China is responsible for the overwhelming majority of EV battery production. 

Electric vehicle battery and motor production is overwhelmingly concentrated between  Japan, Korea, and China , accounting for about 95% of production, with China alone producing nearly  70%.  China has control of extensive infrastructure such as production facilities as well as control of chemicals required for production. As mentioned in the previous section, the Democratic Republic of Congo contains the majority of the world’s supply of cobalt, an integral ingredient for EV batteries. Of the DRC’s cobalt supply, it is estimated that  China owns between 40-50% . This is not only problematic as it allows China to have disproportionate power over the EV market, but also because of notions of neocolonialism and neoliberalism. China controlling the supply of cobalt in the DRC perpetuates inequalities as well as a North South divide, limiting the autonomy of the DRC. 

While China is a compelling market for U.S and European automobile manufacturers, China made early investments in electric vehicles equipping them for a successful and autonomous transition to meet the demand of the Chinese market and well beyond. It is evident that General Motors’ decision to transition to electric vehicles is motivated by China’s transitioning transportation paradigm which prioritizes electric vehicles.

Location 5: Examples of Excellent Alternatives to Personal Vehicles

While it is evident that the internal combustion engine is on its way out, electric vehicles are not the only alternative being explored. Locations all around the world are redefining transportation by investing in alternatives to the personal vehicle. Cars embody issues beyond greenhouse gas emissions such as financial accessibility, congestion, and car-based fatalities, all of which can be greatly reduced through investment in alternative transportation methods. Three exceptional examples of car alternative communities are featured here.

Heidelberg, Germany: Heidelberg, Germany is a renowned leader in environmentally conscious urban planning. Heidelberg’s mayor,  Eckart Würzner, has a vision  for the city that does not include cars, no matter if they’re gas or electric. Würzner has extensive plans to make a car free city happen by including  hydrogen powered bus networks ,  bicycle superhighways , and urban planning that  promotes walkability . The city of Heidelberg strives to go beyond reducing emissions by reclaiming their streets and in turn increasing the quality of life for its residents.

Location 6: Examples of Excellent Alternatives to Personal Vehicles

London, England: London, England implemented a  congestion charge system  as early as 2003. Congestion charging requires a daily charge to people driving within Central and parts of West London. The system was implemented with  four key objectives:  to improve air quality through reduced greenhouse gas emissions, reduce traffic congestion, improve journey time reliability, and investment in public transportation. Since its implementation, London has been largely successful in achieving these objectives, notably the investment in public transport. London is renowned as a city with one of the  strongest transport systems in the world  and this can presumably be attributed to the revenue generated by congestion charges. Updated bus routes, improved frequency of buses, increased park-and-ride spaces, as well as expanded bike and pedestrian infrastructure are  all a result of the congestion charges in London.  While the congestion charges do not probit cars entirely, they do discourage them and provide quality alternatives to personal vehicles.