Automotive
Europe’s EV Market Collapse Provides A Lesson For UAW Leadership
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From the Daily Caller News Foundation
It is an ill-kept secret of American politics that most of the big labor unions in the country have long been client organizations of the Democratic Party. In presidential election years, endorsements from these unions for the party’s nominee have generally been foregone conclusions regardless of voting attitudes of rank-and-file union members.
Some are quicker to endorse than others. Vice President Kamala Harris barely had time to buy campaign letterhead before the United Auto Workers (UAW) weighed in on July 31 with its endorsement. The union’s bosses made the move despite the reality of the Biden-Harris electric vehicle mandates placing many of that union’s jobs at risk as the companies they work for lose billions each year on quixotic efforts to force the public to enjoy paying premiums for cars they cannot rely upon when the going gets tough.
Even with that early move, the UAW fell 9 days behind the AFL-CIO, which jumped on the Harris bandwagon so quickly it probably made union members’ heads spin. Hey, speed matters when your business model relies on constantly asking for favors and protections from the federal government, for which the Democratic Party has traditionally been the most fertile ground to plow.
Given that reality, the Teamsters Union made big news this week by endorsing — well, no one — despite overwhelming support among the rank-and-file for the Republican candidate, former President Donald Trump. It was the first time the Teamsters had failed to endorse the Democrat in a race since 1996, and only the second time in the union’s existence. Teamsters General President Sean O’Brien spoke at the Republican convention in July — and was snubbed by the Democrats at their convention in return. So, the refusal to endorse Harris was not a huge surprise. But O’Brien, fully aware of the vindictive nature of the Democrats towards their political enemies, apparently decided it would not be politically prudent to give a full-throated endorsement to the candidate his members so obviously prefer.
With the race shaping up to be another nail-biter, it remains to be seen whether any of these major unions’ decisions will prove to be wise. But for the UAW, the move to endorse Harris comes with increasing risk amid a softening market for the EVs being forced on U.S. consumers and the rising challenge by Chinese EV makers to the hegemony of domestic car companies in the U.S. market.
With legacy automakers like Ford and General Motors already bleeding billions of dollars in losses in their EV divisions despite heavy government subsidies in place, they can ill-afford an incursion into the U.S. market from Chinese carmakers who are able to make and sell quality EVs for far less than American car companies can. Right now, Europe is providing an object lesson about what happens in the EV space when governments allow that to happen.
EU countries were slow to move to protect their domestic car manufacturers when Chinese companies like BYD began to flood the European market with EVs. EV buyers in countries like Germany and France eagerly bought up the Chinese cars, saving thousands of Euros per unit in the process. When the EU belatedly moved to impose import tariffs on Chinese cars, the domestic car companies responded by raising prices for their own EVs in an effort to recover losses.
The result has been entirely predictable: EV sales in Germany collapsed by nearly 70% during the month of August. In France, they plunged by 33%. Clearly the appetite among EU car buyers for EVs is extremely price sensitive (no one could have possibly seen that coming), and consumers are more than happy to go back to buying gas-powered cars as cheaper alternatives.
Now, the climate alarmist central planners at the EU are proposing to respond to those uncooperative buyers by imposing massive fines on car makers for continuing to sell them the gas-powered cars they actually want to buy. Because, of course, that would be the response from power-mad apparatchiks.
Given that the Biden-Harris regime has basically followed the EU’s model on EV regulation, the EU’s struggles provide a preview of coming attractions for the U.S. auto market under a Harris presidency. It is hard to believe this is the future the UAW leadership really desires for its members.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
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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