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The dilemmas of transitioning to EVs with Chad Livengood · Talking Michigan Transportation

• 0:07
  Jeff Cranson: Hello, welcome to the Talking Michigan Transportation Podcast.
• 0:11
  Jeff Cranson: I'm your host, eff Cranston.
• 0:12
  Jeff Cranson: As discussed on the podcast many times previously, demand for electric vehicles continues to grow, but not quite at the pace once expected, at least here in the United States.
• 0:26
  Jeff Cranson: There are many reasons for this, and some of them involve misunderstandings about the geopolitical forces at work in production of the batteries.
• 0:34
  Jeff Cranson: I spoke with Chad Livengood, a senior editor and columnist at Detroit News, about this topic and his reporting for a column about how demagoguery gets in the way of an honest policy discussion.
• 0:45
  Jeff Cranson: That's especially important in the auto state.
• 0:48
  Jeff Cranson: As always, Chad had some interesting insights, and I hope you enjoy the conversation.
• 0:54
  Jeff Cranson: Thank you again for joining, Chad.
• 0:56
  Jeff Cranson: In the wake of the Biden administration slapping some pretty severe tariffs on Chinese goods back in May of this year, and how that fits in with some other things being discussed, it seems like there's a lot of misunderstanding out there when it comes to Asian-based auto companies.
• 1:12
  Jeff Cranson: Do most consumers think about the difference between a Chinese Polestar, a Korean Hyundai or a Japanese Toyota?
• 1:18
  Jeff Cranson: Obviously, loyalty to American-owned companies remains a factor for some.
• 1:23
  Chad Livengood: I think some people, certainly here in Michigan, who we've built our allegiances over the years I, admittedly, am from a General Motors family, although we have a few Fords hanging around.
• 1:35
  Chad Livengood: Funny enough, my cousins--l ast time I was down in Missouri, my uncle, who has always had Chevy trucks and suddenly one cousin has a Ford truck and one cousin has a Dodge or a Ram.
• 1:50
  Chad Livengood: I still call it Dodge, right, right, yeah, I mean, but nonetheless we have our allegiances and that's kind of that's very much a Midwest thing.
• 2:03
  Chad Livengood: If you go to Florida or California you don't.
• 2:07
  Chad Livengood: You don't really find that in one who is now married to a native Californian.
• 2:12
  Chad Livengood: They're not nearly as obsessed with, with driving something.
• 2:17
  Chad Livengood: Some Detroit steel is as we as as we are out in San Francisco, for example.
• 2:25
  Chad Livengood: But yeah, the motoring public, I'm not sure they really see a lot of difference and that's what's kind of.
• 2:32
  Chad Livengood: What I'm not sure people are actually paying attention to yet is if you get one of these Chinese EV makers who you know, if they're able to penetrate the market with a China subsidized lower cost car, you can see a real potential for that really taking off really fast in the American market.
• 2:54
  Jeff Cranson: Oh my God, the idea of buying an EV for $12,000.
• 2:57
  Jeff Cranson: Yeah, that's going to be appealing to a large part of the people who otherwise have trepidation, and I think a lot of what you wrote about in this goes to what that trepidation is.
• 3:08
  Jeff Cranson: I've talked to Joanne Muller at Axios about this a couple of times and she's become quite schooled in EV policy and why people make the decisions that they do.
• 3:17
  Jeff Cranson: And obviously it's still about range anxiety and the more batteries that you can build and the more charging infrastructure we can install, which the biden administration is trying to do with the nevi program, the more you can put people's anxiety at ease.
• 3:30
  Jeff Cranson: Yet we've got, um, some policymakers, politicians, policymakers trying to stand in the way of building these plants which you know, the.
• 3:40
  Jeff Cranson: The proponents would say the biden administration.
• 3:43
  Jeff Cranson: Others would say look, this is the way we're going to keep them offshoring vehicle production.
• 3:46
  Jeff Cranson: I guess what's your biggest takeaway from the reporting that you did for this?
• 3:51
  Chad Livengood: Yeah.
• 3:51
  Chad Livengood: So if you go back to the Republican National Convention, donald Trump in his acceptance speech openly invited Chinese automakers to build assembly plants in the US, essentially saying they're not going to build them in Mexico, they're going to build them in our country.
• 4:09
  Chad Livengood: But then he turned around just a few weeks later and openly opposes Goshen, a battery parts maker for electric vehicle companies, building a plant on the north side of Big Rapids, companies building a plant on the north side of Big Rapids.
• 4:28
  Chad Livengood: And this is just a real mixed message, because you can't be for the assembly plant if you're not for what is effectively the powertrain plant and that is what the battery plant is.
• 4:38
  Chad Livengood: And so I mean and this is already the pressure is already here that, whether Trump or Kamala Harris is the next president, one of them is going to face this question of whether to support Chinese investment in the US.
• 4:59
  Chad Livengood: And it seems like we are just.
• 5:02
  Chad Livengood: You know, there's just eventually one of the big Chinese automakers, like BYD, is going to try to convince a southern governor point for the auto industry.
• 5:24
  Chad Livengood: If you have a subsidized car company from China trying to build cars in the US and that seems to be where we're at now is we're either going to try to basically fight China with our own subsidies or our own tariffs or our own mechanisms to thwart that off, or we're not, and that's why I kind of wanted to point out, you know, this sort of inconsistency that I'm hearing from Donald Trump and Republicans in Michigan right now on this issue.
• 5:58
  Jeff Cranson: Well, to your point, I think, you know, later this year Polestar is scheduled to start producing a new model, the Polestar 3, at a South Carolina plant which is operated by Volvo Cars and is owned by Grilli, a Chinese company.
• 6:11
  Jeff Cranson: That's South Carolina.
• 6:14
  Chad Livengood: And all they need to do is find a William partner or buy one of these companies or buy a big share like Volvo, and they've got their entrance into the market, and maybe not without even having to go to the expense of building a new plant.
• 6:31
  Chad Livengood: They can just latch on to an existing operation and workforce and start bringing their tech.
• 6:38
  Chad Livengood: And that's why this debate about, like let's use Ford Motor Company, for example, they have teamed up with CATL and to license CATL Chinese battery makers technology in order to build those batteries in Marshall, michigan, at that plant that they're constructing right now, kind of at the confluence of I-94 and I-69.
• 7:11
  Chad Livengood: And they're doing that so that again we're not importing the battery from China, which is hugely expensive.
• 7:15
  Chad Livengood: It's not as easy to maneuver and move these big battery cells, especially for larger vehicles like trucks, because they're just so heavy, and so in order for this to work, you've got to build these battery plants near where the final assembly is and in the logistics world that really necessitates building it as close to the plant as possible.
• 7:39
  Chad Livengood: That's why last week when Donald Trump was in Potterville, he was sitting standing in an aero steel metals processing plant six miles from a ginormous two million square foot battery plant that General Motors is building in partnership with LG Energy Solution, a South Korean battery maker, and that plant sits just next door to the Delta Township assembly plant that builds the profit-rich Chevy Traverse, a three-row SUV, and down the road, about 15 miles away in the city of Lansing, the Sitsa-Lansing Grand River plant, which has been pegged as the recipient of, likely the recipient of much of the battery product that we built in Delta Township and once they convert that plant to be an EV plant and the reason is that people aren't buying Cadillac CT4 sedans anymore, or at least not in mass from the Inflation Reduction Act in order to subsidize the conversion of the plant to build EVs in much the same exact way that the Chinese do with their automakers.
• 9:13
  Jeff Cranson: Well, the people who demagogue the issue I think intentionally conflate borrowing technology with letting the Chinese or another foreign government get a foothold.
• 9:24
  Jeff Cranson: I mean, no matter what you're doing in competition, you'd be silly not to borrow ideas that work that have proven effective right.
• 9:31
  Jeff Cranson: All of us do that.
• 9:32
  Jeff Cranson: I mean that's part of growing any kind of business that you take something that somebody else is doing well and try to implement it yourself.
• 9:40
  Jeff Cranson: Isn't that a lot of what's going on with battery technology?
• 9:44
  Chad Livengood: That's exactly right.
• 9:45
  Chad Livengood: That's what they're trying to do and take that and utilize the workforce.
• 9:52
  Chad Livengood: And I mean, some people with Goshen have scratched their heads why Big Rapids?
• 9:58
  Chad Livengood: And one person that kind of on the inside of the industry said it was purely, purely because of of workforce.
• 10:05
  Chad Livengood: Uh, not just not just the need for a big sprawling piece of land but also workforce, and that's an impoverished area up there in mecosta county, um, and they don't.
• 10:15
  Chad Livengood: They would be the largest private sector employer, um, probably the largest employer, uh, in general, um, and I think, as state has said, it would be the largest manufacturing facility furthest north, up north.
• 10:28
  Chad Livengood: But they passed over other southern states where some of these southern states they've had so much investment from the foreign national Japanese and South Korean automakers that they don't simply have the workforce capacity to take on, they have their own crises of housing and whatnot.
• 10:50
  Chad Livengood: And so the other thing about the Goshen project that I think has gotten lost is they are the American subsidiary of Goshen is one-third owned by Volkswagen.
• 11:01
  Chad Livengood: You would presume that these batteries will go into Volkswagen EVs, even though those are built in the South.
• 11:09
  Chad Livengood: But the other part of that project is they're going to build battery cells for energy storage systems, which I think I can see as a next big industry because of all the solar that we're going to be putting into our energy supply, energy and electricity generation.
• 11:30
  Chad Livengood: We're going to need a much more complex integrated system to store electricity in this state and this country in order to reduce our dependency on fossil fuels and ultimately to to reduce our, our uh, our dependency on fossil fuels and and uh and ultimately try to reduce our greenhouse gases you mean, if you live in the part of the state where most of the population is obviously south of us-10 and the sun goes away in november and doesn't come back until april, we might need to store up some energy.
• 12:02
  Jeff Cranson: Is that what you're thinking?
• 12:03
  Chad Livengood: that's right.
• 12:03
  Chad Livengood: Yes, yes, they're gonna have to have to put it away somewhere, and so this plant that Goshen wants to build is going to construct the battery packs needed, the cells needed to store electricity for short and long-term purposes.
• 12:20
  Jeff Cranson: Stay with us.
• 12:20
  Jeff Cranson: We'll have more on the other side of this important message.
• 12:24
  Safety Message: In Michigan.
• 12:24
  Safety Message: Safety comes first on the roads.
• 12:26
  Safety Message: To combat distracted driving, Michigan passed the hands-free law.
• 12:30
  Safety Message: The law makes holding or manually using a cell phone or other mobile electronic device while operating a vehicle a primary offense.
• 12:38
  Safety Message: This means an officer can stop and ticket you for violating the law.
• 12:43
  Safety Message: This can include, but not limited to, sending or receiving a call, sending, receiving or reading a text or email, accessing, reading or posting to social media sites or entering locations into the phone GPS.
• 12:57
  Jeff Cranson: With this law in place, drivers are encouraged to stay focused, keeping their hands on the wheel and their attention on the road.
• 13:03
  Jeff Cranson: Drive smart, drive safe, drive hands-free.
• 13:07
  Safety Message: Michigan's hands-free law making the road safer for everyone.
• 13:14
  Jeff Cranson: So, I think you asked rhetorically about yeah, what is going to happen if that Lansing plan inevitably shuts down and it's not replaced by EVs and a massive government investment to match the way China is subsidizing, in huge ways, its auto industry?
• 13:31
  Jeff Cranson: You know, then, what you said, and I know you were just kind of throwing that out there, but what is the answer to that question?
• 13:39
  Chad Livengood: Well, I mean, we know how this goes in Michigan.
• 13:42
  Chad Livengood: We've seen plants get shut down, we've seen communities get hollowed out.
• 13:58
  Chad Livengood: I mean, I lived in Lansing for several years.
• 13:59
  Chad Livengood: The west side of Lansing, the south side of Lansing, and Michigan State is a major employer down the road.
• 14:04
  Chad Livengood: But those two auto plants and the warehousing that GM has in town and then all the suppliers that revolve around those two plants, they are a huge part of the economy.
• 14:18
  Chad Livengood: Now, granted, there is a legitimate argument that the transition to batteries does greatly reduce the number of parts involved that go into a vehicle.
• 14:31
  Chad Livengood: There's no doubt there are going to be fewer people working in the auto industry.
• 14:37
  Chad Livengood: Start to lower the number.
• 14:47
  Chad Livengood: We're talking about thousands of fewer parts, uh, because of a battery, um, a propulsion system versus, uh, an internal combustion engine.
• 14:51
  Chad Livengood: But if you don't have an assembly plant there, you're not going to have any of it.
• 14:56
  Jeff Cranson: Well, it's just not natural to try to put that genie back in the bottle.
• 15:01
  Jeff Cranson: I mean, you know, whatever the metaphor is, water finds its own level.
• 15:05
  Jeff Cranson: We're going to migrate toward that for lots of reasons anyway, and you're not going to artificially, just you know, maintain combustible fuel engines just because of the jobs.
• 15:18
  Chad Livengood: Well, we're at 1.2 million EV sales nationally now in a market of about 17 million total vehicles sold.
• 15:28
  Chad Livengood: Yes, it's still a small part of the market, but it's growing every year.
• 15:35
  Chad Livengood: And if you just take Tesla, they have 600,000 of those 1.2 million in sales In China.
• 15:41
  Chad Livengood: Tesla can't make enough cars fast enough.
• 15:44
  Chad Livengood: They're making a million a year right now and they're greatly expanding their manufacturing capacity in China and in Europe.
• 15:57
  Chad Livengood: And again, if you go look at what's going on right now in the auto industry, general Motors is getting clobbered in China right now because of the competition, uh, with these chinese automakers, um, and the teslas of the world and whatnot.
• 16:07
  Chad Livengood: And so, yeah, you're either going to get involved in this global race, um, uh, on evs, or you're gonna.
• 16:15
  Chad Livengood: You're gonna, we're gonna get passed up and and so.
• 16:18
  Chad Livengood: But back to my point if l, if Lansing doesn't keep Lansing-Cran River and there's not a new product for Delta Township when the lifespan of the Chevy Traverse comes to an end, we've seen what happens these plants shut down and these towns shut down, and Lansing has already got its own struggles economically.
• 16:39
  Chad Livengood: It's not too far out of the realm of possibilities that Lansing looks more like Flint in the absence of having the two critical assembly plants.
• 16:53
  Jeff Cranson: I think it was interesting going back to the tariffs announced in May.
• 16:57
  Jeff Cranson: At the time, senator Gary Peters, our junior senator, said today's announcement is a necessary response to combat the Chinese government's unfair trade practices that endanger the future of our auto industry.
• 17:08
  Jeff Cranson: And a Chinese spokesman replied, or weighed in on the whole thing at the time, and said we believe that free trade is essential to speed up the transition to more sustainable mobility through increased EV adoption.
• 17:21
  Jeff Cranson: Transition to more sustainable mobility through increased EV adoption.
• 17:25
  Jeff Cranson: Now, does that come from a genuine place when they talk about free trade, when they subsidize an industry the way they do?
• 17:31
  Chad Livengood: It doesn't seem to compute, and that 102.5% tariff that they put on these Chinese EVs being assembled in Mexico, that has shown to have some.
• 17:45
  Chad Livengood: As you say, the Biden tariff here has started to work and take root because Lotus had to slash its projection of exports by 53%, citing tariffs in the US and the European Union.
• 18:01
  Chad Livengood: So that's what I get back to earlier.
• 18:04
  Chad Livengood: There's going to be, there's going to do.
• 18:06
  Chad Livengood: You know, the next president is going to have to deal with with this head on, either in a in a continued or and as maybe escalated trade war, uh, and and I mean unless you can get China to agree to stop subsidizing these companies, um, and and and.
• 18:22
  Chad Livengood: That doesn't seem like it's going to work.
• 18:24
  Chad Livengood: So the only alternative is either block them from coming here or just block them at the border.
• 18:31
  Chad Livengood: But then again, can you block them from coming here is kind of an unanswered question when you have, you know, the supply chain, like Goshen, if you want, because they're dominating on the technology on the battery front.
• 18:47
  Chad Livengood: And so that's why Ford came up with a solution Okay, we're going to license this technology, we're going to own it ourselves and we'll license and we'll pay the chinese, um, what they uh, uh, what they've, what they've earned for their technology, just like anything else, yeah no, I think that's.
• 19:11
  Jeff Cranson: That's a really good point.
• 19:11
  Jeff Cranson: So, lastly, I guess what have you heard from the commentariat?
• 19:16
  Jeff Cranson: And you know, let's not call them all trolls, but what kind of feedback did you get to your column?
• 19:21
  Chad Livengood: You know people again like say well, you're supporting the communist government here.
• 19:27
  Chad Livengood: I just keep raising the question how can Donald Trump be for Chinese assembly plants but not Chinese suppliers to cars?
• 19:37
  Chad Livengood: That just doesn't compute.
• 19:39
  Chad Livengood: It just doesn't compute and that's exactly the position he's now taken in this China debate, nailed down on in an interview going off the record last week.
• 20:01
  Chad Livengood: Is if Donald Trump is elected president, will he pull the plug on that $500 million Inflation Reduction Act grant for the Lansing Grand River plant or will he go forward with this Biden administration policy and decision to subsidize that transition and let that transition to an EV plant take place?
• 20:25
  Jeff Cranson: Well, hopefully, governments, not just in Michigan but across the country, will be doing more with this NEVI program.
• 20:31
  Jeff Cranson: Soon You'll start to see more charging stations going out and more ways to support EVs, and the way I think about it is if still our biggest employers, some of our most important industry, still feel like this is important, even if it hasn't taken off quite the pace that they hoped, you know that government does have a responsibility to support them, and charging infrastructure is one way to do that, I guess.
• 20:54
  Jeff Cranson: Stay tuned.
• 20:56
  Chad Livengood: And definitely just the last point is charging infrastructure needs to improve.
• 21:03
  Chad Livengood: Point this charging infrastructure needs to improve.
• 21:05
  Chad Livengood: I I got my eyes wide open back in late may when I rented a uh on my honeymoon in in northern california, rented a hybrid uh, jeep, wrangler and and drove it all from san francisco up up to up the coast, almost to oregon and back, and um was surprised at how little infrastructure for charging there was in a lot of little towns and some bigger size towns as well and affluent towns around the suburbs of the San Francisco Bay region.
• 21:37
  Chad Livengood: And so this is California and so they have a long ways to go, and Michigan certainly still has a long ways to go, although I've been pleased this summer to see at times, some charging stations along US-23 up to along the Sunrise side, where I spent some time, and there's clearly a movement by not just government but by the private sector.
• 22:04
  Chad Livengood: I mean a number of different charging stations that are clearly private sector.
• 22:10
  Chad Livengood: You know, charging stations at a marathon, a gas station, for instance, in the middle of the middle of Alpena.
• 22:17
  Chad Livengood: I saw this all this summer and I've been surprised by that and it also just tells me that people are starting to move their feet here on this.
• 22:27
  Jeff Cranson: Yeah, it's going to have to be the private sector.
• 22:28
  Jeff Cranson: I think that what the government can do is help kickstart it.
• 22:31
  Jeff Cranson: But you're right, you're going to have to see that investment.
• 22:34
  Jeff Cranson: They're going to have to figure out a way to make money, just like they make money on gas, right?
• 22:37
  Jeff Cranson: That's the way it works.
• 22:38
  Jeff Cranson: So, yeah, let's talk more about that sometime.
• 22:42
  Jeff Cranson: I'll be interested.
• 22:42
  Jeff Cranson: You drove a 4xe in California.
• 22:45
  Jeff Cranson: Those are cool-looking vehicles, so I do want to hear more about that sometime.
• 22:49
  Jeff Cranson: Joanne Muller has made the point that some automakers are rethinking hybrids now.
• 22:54
  Jeff Cranson: They thought they were going to make the leap very quickly to all-electric and people are much more comfortable in a hybrid.
• 22:59
  Jeff Cranson: It sounds like that was your experience.
• 23:00
  Jeff Cranson: Definitely, yes.
• 23:02
  Jeff Cranson: Well, thanks, chad.
• 23:03
  Jeff Cranson: I appreciate you taking time to do this again and always appreciate your insights.
• 23:08
  Chad Livengood: Hey, thanks for having me.
• 23:10
  Jeff Cranson: I'd like to thank you once more for tuning in to Talking Michigan Transportation.
• 23:13
  Jeff Cranson: You can find show notes and more on Apple Podcasts or Buzzsprout.
• 23:17
  Jeff Cranson: I also want to acknowledge the talented people who help make this a reality each week, starting with Randy Debler, who skillfully edits the audio, Jesse Ball, who proofs the content, Courtney Bates, who posts the podcast to various platforms, and Jacke Salinas, who transcribes the audio to make it accessible to all.