There haven’t been many worse weeks for electric vehicles.
Apple stated that it will no longer try to build an EV, and will instead focus on AI technology. Ford announced a pause in its delivery of the new F-150 Lightning pickup trucks, citing quality control problems. Mercedes no longer plans to go all electric by 2030, and said it will only make the EVs that drivers want to buy.
These announcements follow Ford’s January message in its investor earnings call that it had lost over $65,000 per EV sold in 2023; its October reduction in EV investment by $12 billion; and the delay in its $3.5 billion Michigan battery plant, a partnership with China’s Contemporary Amperex Technology Co. Limited.
General Motors, meanwhile, has abandoned its goal of selling 400,000 EVs by June 2024.
Yet reality is more easily ignored at the White House. President Joe Biden has proposed rules that would require 60% of new cars sold to be battery-powered electric by 2030 and 66% battery-powered electric by 2032.
These proposed rules, promulgated by the U.S. Environmental Protection Agency and the U.S. Department of Transportation, are due to be issued in final form this spring, after incorporation of public comments.
But despite generous tax credits for manufacturers for plants to build the electric vehicles and batteries, and tax credits for Americans to buy EVs, Americans are not purchasing the vehicles in sufficient quantities to make the proposed rules attainable. Hence the raft of announcements from disappointed automakers.
EVs were once the hot new fad, and all automakers, with the exception of Toyota, promised to go all electric by 2035 or earlier. But the technology has not caught on as fast as was forecast. EVs are sitting on dealers’ lots, and over 4,500 auto dealers have written to President Biden asking him to delay the EV mandate.
The dealers write that “the day supply of electric vehicles on dealer lots today is nearly twice the supply of conventional vehicles.” EV sales were 8% percent of total sales in 2023, and they cannot reach 60% by 2030. Only 19 models, compared to 43 models in 2023, qualify for a tax credit, due to rules on domestic content to enable drivers to take the credit.
Drivers are worried about batteries going dead, and with good reason. America has 170,000 public charging stations, but 2.8 million will be needed by 2032. Only three have been built with Inflation Reduction Act funds, according to the dealers.
EV use is not growing because of the big C—Choice. And people aren’t choosing EVs for five other reasons, all beginning with C.
Cost. EVs cost more than equivalent gasoline-powered vehicles. The recently-paused Ford Lightning, the electric version of the Ford 150 pickup truck, one of America’s top selling vehicles, costs an additional $17,000. Tesla’s prices begin at $42,000 for a Model 3, and reach $100,000 for a Model X.
Convenience. Owning an EV is convenient for drivers who can charge them at home overnight and who don’t travel out of range. For others, stopping to recharge during the day while out on business, or while on a vacation trip, is a major drawback. A charge can take an hour—and longer if the driver is not first in line at the charging station.
Children. EVs tend to be smaller, and it’s hard to fit three car seats in the back row. This means families with more than two children don’t find these vehicles suitable for their needs. The children are also a major disadvantage to long recharging times, because their patience is limited.
Climate. EVs lose 40% of their battery range when the temperature dips below 20 degrees Fahrenheit and when the heating is on, according to the American Automobile Association. Residents of Wyoming (840 registered EVs); North Dakota (640); and Alaska (1,970) are unlikely to increase their purchases substantially.
China. China makes 80% of the world’s electric batteries and controls 60% of the world’s critical minerals that are used to make the batteries. Required use of EVs, rather than U.S. oil and natural gas resources, makes America depend on China for a vital part of its economy.
The stated rationale for mandating EVs is that they are emissions-free, and fossil fuels cause climate change. But EVs are only emissions-free when they are charged with emissions-free energy, such as renewables and nuclear power. This is not the case in America at present. In addition, China, India, Russia, Africa, and Latin America are increasing their consumption of fossil fuels, and show no signs of decline.
Going all EV is a “luxury belief,” a term coined by Rob Henderson to mean an opinion that confers “status on the upper class while often inflicting costs on the lower classes.” Take crime. When the police have less funding and drugs are legalized, higher levels of crime and drug use disproportionately hurt the poor, but the rich are insulated from the adverse consequences.
Similarly, mandated EVs make poor people poorer. With cars more expensive, poor people are priced out of the market or forced into less reliable used cars, and have a smaller choice of jobs or schools.
Lack of personal transportation makes poor people’s children worse off, too. Without cars, poor people can’t take children to sports practice, to choir, or to church.
As long as consumers have choice, some will buy EVs, but they won’t buy them in numbers that the Biden Administration is requiring. Ford, Apple, Mercedes, GM, and the auto dealers are canaries in the proverbial coal mine.
As the saying goes, you can lead a horse to water, but you can’t make it drink. By the same token, the Administration is finding that it can offer Americans EV tax credits, but it can’t make them buy the vehicles.
