Latest bad news for electric vehicles further imperils massive bets by Illinois and federal government – Wirepoints

By: Mark Glennon*

Electric vehicle subsidies total nearly $50,000 per EV, according to a new study reported in RealClear. The true total may well be far more, the cost of which is forced on taxpayers, gasoline vehicle owners and utility ratepayers.

That massive bet on EVs is looking more unsound every day and may be shaping up as a historic failure of government industrial policy. Both the Biden Administration and the State of Illinois, with its Reimaging Energy and Vehicles plan, have bet the ranch on EVs. That means taxpayers, not private investors, lose if the bet goes bad, as increasingly appears likely.

Consider the bad news on EVs just in the past couple weeks:

• A scathing report from Consumer Reports found that Electric vehicles have nearly 80% more problems and are less reliable than conventional gas powered vehicles. That report was widely cited in major media across the nation, such as here by CBS.
• Used EV prices are plummeting. They are down 7% while the average used combustion car price is only down 5.1 percent.
• If you get in an accident, repairs typically cost 50% more for an EV than for a gasoline powered vehicle, the Wall Street Journal reported.
• General Motors pushed back its EV targets and postponed its coming EV lineup in what it called an effort to ensure profitability; Hertz is slowing the electrification of its fleets, in part citing weak resale value; and Tesla remains engaged in a price war meant to entice skeptical buyers, all as reported by The Street.
• A wave of layoffs has hit EV battery makers in the US and across the world, thanks to slowing demand.
• With the Biden Administration’s support, Congress set aside $7.5 billion in 2021 to build tens of thousands of EV charging stations across America. But not a single charger has yet been brought online, according to a new report by Politico.
• Nearly 4,000 auto dealers sent an open letter to President Biden asking him to back off on the EV push. “This is the voice of the consumer,” A dealer owner told CNBC, saying that unsold EVs are stacking up on dealers’ lots. “We’re now backed-up up to 12 months with EVs. Consumers don’t want them; they’re not buying them.”

Central to many of those problems is that final point as stated by auto dealers: “Consumers don’t want them; they’re not buying them.”

Yes, more EVs are being sold than ever and the numbers are growing, but not at nearly the pace needed to justify the subsidies or stem the losses for EV makers.

Also central to the problem, the Biden Administration is forcing a backdoor EV mandate. The EPA has proposed tailpipe emissions standards for greenhouse gases that would effectively require that EVs make up two-thirds of car sales in 2032.

Consequently, despite the subsidies, EV makers are losing money at an impossible rate. Ford loses $36,000 for every EV it sells. Rivian loses $32,600 for every electric truck it sells. Lucid loses an astonishing $336,000 per EV it sells.

Getting back to that study showing subsidies of $50,000 per EV, skepticism from some is predictable because it was prepared by a conservative outfit, the Texas Public Policy Foundation, in an oil-rich state.

But go through it and judge for yourself whether it’s reasonable. What’s most striking are additional subsidies that are not included in its $50,000 estimate. “First and foremost are the tax credits, grants, and loans for domestic battery manufacturing, which is by far the most expensive component of an EV,” the report says. See the long list of other subsidies not counted in the study here.

It’s understandable that the full impact of all direct and indirect EV subsidies aren’t included. We’ve long complained bitterly that Illinois rarely provides a reasonable cost estimate on green energy programs, and there are dozens of them at all levels of government.

For example, Illinois now imposes an unfunded mandate for charging stations in new homes and multifamily housing garages. Nobody counts the cost of that.

And how about the incentive package Illinois will provide for the new Stellantis project in Belvidere, heavily centered on EVs? It’s likely to be bigger than the $536 million package for Gotion, a Chinese company, proposed EV project in Manteno Illinois. So far, however, Gov. JB Pritzker has refused to say how much Illinois taxpayers will be kicking in.

Much the same is true for many other states and the federal government. If it’s green, cost doesn’t matter.

Grab your wallet.

*Mark Glennon is founder of Wirepoints.