It seems we’ve reached “peak EV,” with sales in trouble and assembly line workers losing their jobs. The hard truth is electric vehicle sales would have never reached the level they have if the government had not trespassed into private matters.
The EV troubles are all around. Sales are slowing. Unsold cars have piled up in lots. Surveys plainly indicate that fewer Americans want them. In response to dramatically slowing sales, Ford announced last fall that it was delaying $12 billion in EV investments. Which should surprise no one, considering that the company lost nearly $73,000 on each EV it sold in the second quarter of 2023.
At roughly the same time, General Motors walked away from its EV strategy. Mercedes was excited about its new EVs just a few months back but learned that customers weren’t thrilled about about them. Earlier this year Hertz decided it would dump as many as 20,000 of its EVs. Now Tesla is laying off 10% of its global workforce, meaning around 14,000 former employees will be looking for new jobs.
Rivian is also dropping one-tenth of its workforce. The company’s share price fell 15% when the announcement was made. Production at Lucid, another EV startup, is expected to be “much lower than Wall Street’s expectations,” Reuters reports.
Meanwhile, BYD, the Chinese EV maker that’s heavily subsidized by Beijing, has seen a sharp fall in sales.
For years EV sales have been propped up like a corpse by public policy. The incentives to buy what are considered zero-emission automobiles but clearly are not come at an obscenely high cost. Research by the Texas Public Policy Foundation found that “nearly $22 billion in federal and state subsidies and regulatory credits suppressed the retail price of EVs” by an average of nearly $50,000. Or put another way, “the average model year 2021 EV would cost $48,698 more to own over a 10-year period without $22 billion in government favors given to EV manufacturers and owners.”
Federal and state tax credits and rebates account for almost $9,000 of that sum. Another $4,800 in subsidies is attributed to state zero-emission mandates and credits funded by hidden fees on gasoline vehicles.
Then there are $19,000 in indirect subsidies created by the federal Corporate Average Fuel Economy standards – “which in recent years have been made increasingly stringent in order to make [internal-combustion engine vehicles] more expensive and to drive EV adoption,” says the paper – and more than $3,000 due to the Environmental Protection Agency’s greenhouse-gas emissions standard.
Utility ratepayers also kick in about $10,500 per car. They have to bear the costs of systems upgrades that are needed to handle the demand for more power to charge the battery cars.
On a level playing field, with no subsidies and no incentives for either EVs or internal-combustion automobiles, EVs would be nothing more than novelty items, toys actually, owned only by a wealthy few. As Steve La Fleur and Todd Wynn of the Cascade Policy Institute have noted, the free market will reject them until they become “technologically and financially viable.”
That was 15 years ago, and EVs today are still inferior to the cars and trucks that burn fossil fuel.
Of course that matters not a bit to the Democrats. Their indifference to consumers is manifested daily in the White House’s unrelenting pursuit of economically ruinous emission and mileage mandates, and in states where officials have decided they are better qualified to make the automobile buying choices.
“The real boss” though, says Jon Miltimore of the Foundation for Economic Education, is the free-market economy. It’s not the auto industry, which wanted to build EVs when it thought it could rake in profits with help from policymakers, “and it’s certainly not the federal government.”
“You look at how much money they’re losing right now,” says Jason Isaac, a co-author of the Texas Public Policy Foundation study, of EVs “and they can’t compete.”
Maybe one day that changes. As long as companies are free to innovate, progress is always possible. But it’s not government’s job to support an enterprise until it can stand on its own, especially one whose payoff is so clearly uncertain.
— Written by the I&I Editorial Board
EVs are a plot to defund big oil.
I think the auto industry was gung-ho on EVs because they would make the ever-tightening emissions standards somebody else’s problem. Those standards are getting to the point where they’re unrealistic and unattainable, not to mention that the cost/benefit ratio not longer justifiable. However, if consumers refuse to buy them, then going all electric is a path to ruin.
Yes, of course EVs, Teslas, Rivians and others will be able to compete for those buyers who want them and can afford the cost. Same as Mercedes, Jags, Bentleys, etc., are desired by people who can afford them and like their special engineering and design features. There is a place in a free market of all sorts of different products in every sector.
Can EVs survive and be competitive without all the tax paid subsidies?
Hard to tell, but I bet yes, indeed. The companies are owned and managed by very smart people with many smart investors and they surely will figure it all out without the disruptive and distorting crutch of gov.
For politicians like Gov. Newsom to pick a date out of his hat and declare that date to be the doomsday date for gas powered cars is the height of arrogance, ignorance and probably stupidity, too.
Comment boards often have rules about the length of a post.
Fortunately the question posed – Could EV’s compete in a true free market? – can be answer accurately and concisely without need for elaboration:
NEVER IN A MILLION YEARS.
As someone who could not afford a Tesla, I have amazingly had the opportunity to drive a top of the line Model X for the last 6 years (no, I don’t work for Tesla or any of its affiliates), and I absolutely know this car can compete in a high-end market. This particular model sold for 158K in 2018 (they are down to about 90K now) and I don’t believe it qualified for the 7500 tax credit. Regardless they sold more Teslas than most of the high-end European cars, combined, and I believe they would have sold nearly as many without the tax credit. It’s an unequalled feat of engineering, it’s among the very quickest of all cars, yet it requires almost no maintenance other than tires. Also, in a state with reasonable electricity rates, it costs under $6 to drive this big, heavy and roomy SUV 200 miles (when charged overnight at home). That being said, I don’t believe in subsidies and mandates for EV’s, I’m against the “carbon credit” tax scams, and I believe that the jury is still out regarding human caused “climate change.”
Hasn’t Lunch Bucket Joe claimed he was an 18-wheeler driver, a miner, and a bunch of other jobs? Maybe he’s planning on building all the EVs himself that would be needed to meet his completely unrealistic target goals.
No, no and hell no!
The notion of “Peak EVs” is nonsensical. Leftists struggle with the fact that “Supply and Demand” has multiple variables, including the over all utility of the product (range, comfort, convenience, load) vs the COST of the product. At the CURRENT cost, demand is stable – which is absolutely normal. Demand will increase when utility increases and / or price decreases – period.
My Mach E cost $53,500. I save at least $300 monthly on gas and service. Yeah, the payment is higher but it’s easier to budget when I’m not paying out $60 several times a month.
Even we benighted are well aware that the current EV enthusiasm is an accounting trick whereby EV owners can skate by -=currently=- on lower prices on a fossil grid until such time as the other promised shoe drops (fossil fuel grid shutdown) at which point an EV will not only be inconvenient but also more expensive. An EV can only be cheaper than gas via temporary accounting trickery (few EV cars, lots of gas ones.) . Build 500 nuke plants and the equation changes… but EV buyers aren’t the supporters of nuclear energy. Who’s benighted again?
EV’s predate the ICE automobile by decades. The lovely Bertha Benz had an EV, it was the reason Karl invented the modern ICE automobile. The problems then were range, weight and recharge time, sound familiar? Karl was wasting his time according to many of his peers, because better batteries were ” just around the corner “, fortunately he ignored them.
Subsidized Chinese EV’s are nothing less than economic IED’s being planted in our society. It’s bad enough that our own government is trying to shove the damn things down our throats, inferior technology that they are. The car-buying American public has spoken … there is only a very small niche market for these things. They are totally inadequate for the vast majority of American roadway infrastructure. Congress, get a clue. Or plan on seeing charging stations look like rural roadsigns … full of bullet holes.