Automotive
Electric vehicle mandates mean misery all around
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From the Fraser Institute
By Matthew Lau
The latest news of slowing demand for electric vehicles highlight the profound hazards of the federal government’s Soviet-style mandate that 100 per cent of new light-duty vehicles sold must be electric or plug-in hybrid by 2035 (with interim targets of 20 per cent by 2026 and 60 per cent by 2030, with steep penalties for dealers missing these targets).
The targets were wild to begin with—as Manhattan Institute senior fellow Mark P. Mills observed, bans on conventional vehicles and mandated switches to electric mean, in jurisdictions such as Canada, “consumers will need to adopt EVs at a scale and velocity 10 times greater and faster than the introduction of any new model of car in history.”
Indeed, when the Trudeau government announced its mandate last December, conventional vehicles accounted for 87 per cent of the market, and today the mandated switch to electric looks even more at odds with actual consumer preferences. According to reports, Tesla will cut its global workforce by more than 10 per cent (or more than 14,000 employees) due to slowing electric vehicle demand.
In Canada, a Financial Post headline reads, “‘Tall order to ask the average Canadian’: EVs are twice as hard to sell today.” Not only has Tesla’s quarterly sales declined, Ford Motor Co. announced in April it will delay the start of electric vehicle production at its Oakville plant by two years, from 2025 to 2027.
According to research from global data and analytics firm J.D. Power, it now takes 55 days to sell an electric vehicle in Canada, up from 22 days in the first quarter of 2023 and longer than the 51 days it takes a gasoline-powered car to sell. This is the result, some analysts suggest, of a lack of desirable models and high consumer prices—and despite federal subsidies to car buyers of up to $5,000 per electric vehicle and additional government subsidies in six provinces, as high as $7,000 in Quebec.
Similarly in the United States, the Wall Street Journal reports that on average, electric vehicles and plug-in hybrids sit in dealer lots longer than gasoline-powered cars and hybrids. Again, that’s despite heavy government pressure to switch to electric—the Biden administration mandated two-thirds of new vehicles sold must be electric by 2032.
In both Canada and the U.S., politicians banning consumers from buying vehicles they want and instead forcing them to buy the types of vehicles that run contrary to their preferences, call to mind famed philosopher Adam Smith’s “man of system,” described in his 1759 book, The Theory of Moral Sentiments.
The man of system, Smith explained, “is apt to be very wise in his own conceit” and “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess–board.” But people are not chess pieces to be moved around by a hand from above; they have their own agency and if pushed by the “man of system” in a direction opposite to where they want to go, the result will be misery and “society must be at all times in the highest degree of disorder.”
That nicely sums up the current government effort to mandate electric vehicles contrary to consumer preferences. The vehicle market is in a state of disorder as the government tries to force people to buy the types of cars many of them do not want, and the outcomes are miserable all around.
Author:
Automotive
Nissan, Honda scrap $60B merger talks amid growing tensions
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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
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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.
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