Automakers Hit Reverse On Idealistic Electric Vehicle Targets Despite Billions In Biden-Harris Subsidies

From the Daily Caller News Foundation

Automakers have continued to backpedal on electric vehicle (EV) targets over the last year as a slackening of consumer demand has hampered growth despite the billions in subsidies lavished on the industry by the Biden-Harris administration.

A wide array of auto manufacturers have abandoned key EV goals since February, with Volvo, Ford and Mercedes-Benz all dialing back electric quotas or dropping previously planned product lines. The shifts in corporate strategy suggest the EV transition — once touted by auto executives like Ford CEO Jim Farley as the industry’s future — may not be as feasible as once thought due to consumer aversion to lower mileage ranges, a lack of charging infrastructure and higher prices, experts told the Daily Caller News Foundation.

The auto industry’s change in direction is in spite of the billions in subsidies doled out to the industry via the 2021 Bipartisan Infrastructure Bill and the 2022 Inflation Reduction Act, with the White House offering a $7,500 federal tax credit for certain EVs to ease costs for buyers, and allocating $12 billion for carmakers to retrofit factories for EV production. The administration has also put in place stringent regulations designed to phase out internal combustion engine vehicles, including a tailpipe emissions rule that would effectively require about 67% of all light-duty vehicles sold after model year 2032 to be electric vehicles (EVs) or hybrids.

“Even after throwing money at EVs hand over fist, basically paying people tax dollars to drive these cars off the lots, you have a dire spiral of (1) not enough demand to support the number of cars being produced, and (2) the people you paid to buy them now wanting to go back to what they had before,” O.H. Skinner, executive director of the Alliance for Consumers and the former solicitor general of Arizona, told the DCNF.

Autos over the last 5 years:

Auto CEOs: “we’re going electric by 2030 so I can become the toast of the town and get glossy magazine spreads written about how visionary and green I am.”

Engineers: “that’s not possible…”

Accountants: “that’s not possible…”

Customers: “we… https://t.co/ldca2L0n4G

— Alliance For Consumers (@for_consumers) September 4, 2024

Despite the generous tax credits, consumers have been hesitant to adopt EVs at the rate the Biden-Harris administration and automakers have hoped, with EV sales growing 50% in the first half of 2023 and 31% in the first half of 2024, less than the 71% increase in the first half of 2022. Moreover, a June poll from The Associated Press-NORC Center for Public Affairs Research and the University of Chicago’s Energy Policy Institute found 46% of respondents were unlikely or very unlikely to purchase an EV, while just 21% were “very” or “extremely” likely to make the change.

Consumer sentiment towards EVs has struggled even among those who have already purchased the vehicles, with a June survey from leading consulting firm McKinsey and Company finding nearly half of Americans who own an EV want to go back to a standard vehicle.

“The [EV market] headwinds come from physical realities that translate into economic and practical realities,” Mark Mills, a distinguished senior fellow at the Texas Public Policy Foundation and an expert on the automobile market, told the DCNF. “EVs are inherently more expensive… and most consumers are very price sensitive; EV fueling for most people is far less convenient… [and] EV fueling infrastructure is extremely expensive and will take a long time to build out.”

The average cost of a new EV was 10% higher than the price of a standard vehicle as of January, with the 2024 electric version of a base Ford F-150 costing roughly $20,000 more. The Ford F-Series was the best-selling vehicle in the U.S. in 2023.

Ford canceled plans to produce a three-row electric SUV in August and reduced output of its F-150 Lightning pickup truck in January. The reversals follow Ford losing $4.7 billion on EVs in 2023, equating to nearly $65,000 per EV it sold. When reached, a Ford spokeswoman referred back previous comments to the DCNF stating that “we aren’t going to launch vehicles unless they are going to be profitable within 12 months of launch.”

“These are staggering costs to impose on American families,” Diana Furchtgott-Roth, director of the Center for Energy, Climate and Environment at the Heritage Foundation, told the DCNF.

EV carmakers Tesla and Lucid have also struggled in the last year, announcing plans to layoff roughly 10% and 6% of their workforces, respectively.

On top of sheer cost, expanding charging infrastructure has also been a challenge for manufacturers, with the Biden-Harris administration having built just seven EV charging stations in four states as of April 2024, despite the Bipartisan Infrastructure Bill earmarking $7.5 billion for the creation of a national EV charger network. A lack of demand, union requirements, as well as diversity, equity and inclusion initiatives, with the Department of Transportation requiring applicants to promise to perform “intentional outreach to underserved communities” by hosting “neighborhood block parties” in order to qualify for funding, have significantly slowed down the project’s rollout.

Beyond a lack of infrastructure, charging can simply be inconvenient for consumers, with refueling times ranging from 20 minutes to upwards of 50 hours depending on charger voltage and battery size, according to American automotive resource company Edmunds. Even “fast charging” in the urban center of Washington, D.C., can take as long as 35 minutes.

Faced with these obstacles, Volvo Cars abandoned plans to offer an all-electric line-up by the end of the decade, instead aiming to have between 90% and 100% of its cars be fully electric or plug-in hybrids by that time. Mercedes-Benz made a similar announcement back in February, slashing its target of selling 100% EVs by 2030 to just 50% after its net profit fell 21.5% year-over-year in the fourth quarter of 2023.

“The Biden-Harris administration is spending billions in tax incentives to pay auto companies to make EVs, and billions for tax credits to pay households to buy the cars,” Furchtgott-Roth told the DCNF. “Still, Americans are too smart to fall for a product that is not suited for them.”

The White House, Volvo and Mercedes-Benz did not respond to a request for comment from the DCNF.

Related Topics:#DailyCaller #EVMandates #EVSubsidies ElectricVehicleTargets EVDemandFalling EVGoals EVTargets OwenKlinsky

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Nissan, Honda scrap $60B merger talks amid growing tensions

Published on February 6, 2025

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MxM News

Quick Hit:

Nissan is reportedly abandoning merger talks with Honda, scrapping a $60 billion deal that would have created the world’s third-largest automaker. The collapse raises questions about Nissan’s turnaround strategy as it faces challenges from electric vehicle competitors and potential U.S. tariffs.

Key Details:

Nissan shares dropped over 4% following the news, while Honda’s stock surged more than 8%, signaling investor relief.
Honda reportedly proposed making Nissan a subsidiary, a move Nissan rejected as it was initially framed as a merger of equals.
Nissan is struggling with financial challenges and the transition to EVs, still reeling from the 2018 scandal involving former chairman Carlos Ghosn.

Diving Deeper:

Merger talks between Nissan and Honda have collapsed, according to sources, after months of negotiations to form an auto giant capable of competing with Chinese EV makers like BYD. The proposed deal, valued at over $60 billion, would have created the world’s third-largest automaker. However, differences in strategy and control ultimately derailed the discussions.

Reports indicate that Honda, Japan’s second-largest automaker, wanted Nissan to become a subsidiary rather than an equal merger partner. Nissan balked at the idea, leading to the collapse of negotiations. Honda’s market valuation of approximately $51.9 billion dwarfs Nissan’s, which may have fueled concerns about control. The failure of talks sent Nissan’s stock tumbling more than 4% in Tokyo, while Honda’s shares rose over 8%, reflecting investor confidence in Honda’s independent strategy.

Nissan, already in the midst of a turnaround plan involving 9,000 job cuts and a 20% reduction in global capacity, now faces mounting pressure to restructure on its own. Analysts warn that the failed merger raises uncertainty about Nissan’s ability to compete in an industry rapidly shifting toward EVs. “Investors may get concerned about Nissan’s future [and] turnaround,” Morningstar analyst Vincent Sun said.

Complicating matters further, Nissan faces heightened risks from U.S. tariffs under President Donald Trump’s trade policies. Potential tariffs on vehicles manufactured in Mexico could hit Nissan harder than competitors like Honda and Toyota. The stalled deal also impacts Nissan’s existing alliance with Renault, which had expressed openness to the merger. Renault holds a 36% stake in Nissan, including 18.7% through a French trust.

While both Nissan and Honda have stated they will finalize a direction by mid-February, the collapse of this deal signals deep divisions in Japan’s auto industry. With Nissan’s financial struggles and the growing dominance of Chinese EV makers, the company must now navigate an increasingly challenging market without external support.

Automotive

Trudeau must repeal the EV mandate

Published on January 25, 2025

Todayville

By Dan McTeague

Last Monday, Transport Canada released a bombshell statement, announcing that the Trudeau government’s program granting a $5,000 rebate to Canadians purchasing an Electric Vehicle (EV) had run out of money and would be discontinued, “effective immediately.” This followed a prior announcement from the government of Quebec that they would be suspending their own subsidy, which had amounted to $7,000 per EV purchased.

This is, of course, a game changer for an industry which the Trudeau government (as well as the Ford government in Ontario) has invested billions of taxpayer dollars in. That’s because, no matter the country, the EV industry is utterly dependent upon a system of carrots and sticks from the government, in the form of subsidies and mandates.

EVs have remained notably more expensive than traditional Internal Combustion Engine (ICE) vehicles, even with those government incentive programs. Without them the purchase of EVs becomes impossible for all but the wealthiest Canadians.

Which is fine. Let the rich people have their toys, if they want them. Though if they justify the expense by saying that they’re saving the planet by it, I may be tempted to deflate them a bit by pointing out that EVs are in no way appreciably better for the environment than ICE vehicles, how all the lithium, nickel, cobalt, manganese, aluminum, copper, etc, contained in just one single EV battery requires displacing about 500,000 lbs of earth. Mining these materials often takes place in poorer countries with substandard environmental regulations.

Moreover, the weight of those batteries means that EVs burn through tires more quickly than gas-and-diesel driven vehicles, and wear down roads faster as well, which among other issues leads to an increase in particulate matter in the air, what in the old days we referred to as “pollution.”

That is a potential issue, but one that is mitigated by the fact that EVs make up a small minority of cars on the road. Regular people have proved unwilling to drive them, and that will be even more true now that the consumer subsidies have disappeared.

Of course, it will be an issue if the Trudeau Liberals get their way. You see, Electric Vehicles are one of the main arenas in their ongoing battle with reality. And so even with the end of their consumer subsidies, they remain committed to their mandates requiring every new vehicle purchased in Canada to be electric by 2035, now just a decade away!

They’ve done away with the carrots, and they’re hoping to keep this plan moving with sticks alone.

This is, in a word, madness.

As I’ve said before, the Electric Vehicle mandate is a terrible policy, and one which should be repealed immediately. Canada is about the worst place to attempt this particular experiment with social engineering. It is famously cold, and EVs are famously bad in the cold, charging much slower in frigid temperatures and struggling to hold a charge. Which itself is a major issue, because our country is also enormous and spread out, meaning that most Canadians have to do a great deal of driving to get from “Point A” to “Point B.”

Canada is sorely lacking in the infrastructure which would be required to keep EVs on the road. We currently have less than 30,000 public charging stations nationwide, which is more than 400,000 short of Natural Resources Canada’s projection of what we will need to support the mandated total EV transition.

Our electrical grid is already stressed, without the addition of tens of millions of battery powered vehicles being plugged in every night over a very short time. And of course, irony of ironies, this transition is supposed to take place while our activist government is pushing us on to less reliable energy sources, like wind and solar!

Plus, as I’ve pointed out before, the economic case for EVs, such as it was, has been completely upended by the recent U.S. election. Donald Trump’s victory means that our neighbors to the south are in no immediate danger of being forced to ditch gas-and-diesel driven cars. Consequently, the pitch by the Trudeau and Ford governments that Canada was putting itself at the center of an evolving auto market has fallen flat. In reality, they’ve shackled us to a corpse.

So on behalf of my fellow Canadians I say, “Thank you,” to the government for no longer burning our tax dollars on this particular subsidy. But that isn’t even half the battle. It must be followed through with an even bigger next step.

They must repeal the EV mandate.

Dan McTeague is President of Canadians for Affordable Energy.