Electric Vehicle Makers ask Pritzker To Outlaw Their Competition – Wirepoints

By: Mark Glennon*

Gifts from the government apparently will never be enough for the electric vehicle industry.

Last week, as reported by the Chicago Sun-Times, 16 companies in the industry signed a letter to Gov. JB Pritzker asking him to pledge that by 2050 all new medium- to heavy-duty vehicles sold in Illinois will be zero-emission models. Signers included Rivian, with a large EV plant in Illinois, and Lion Electric, which is starting to build electric school buses in the state.

Industry demands actually go much further than that. Most of the major industry players, including Rivian and Lion, openly advocate for policies to achieve 100% electric sales by 2030 for vehicles of any size. The Biden Administration and at least nine states, led by California, have set either soft or hard deadlines for zero emission transportation. Biden’s goal is for half of vehicle sales to be EVs by 2030. EVs today are just 6.5% of vehicle sales.

Those goals may not be feasible, but incentives and mandates of many sorts are being legislated to achieve them with little recognition of the total cost.

I am not referring just to the cost-benefit considerations of an individual’s purchase of an EV – iffy as that is. The most thorough cost-benefit analysis for would-be buyers I’ve found is from Car & Driver, which concluded with this: “So is owning an EV cheaper in the long run? All signs point to possibly. Maybe. Sometimes.” The answer depends heavily on individual circumstances, the analysis says.

That answer is surely irrelevant to working class consumers, however, who simply don’t have the up-front cash to buy an EV. The price of an EV soared to an average of $65,000 last month, a year-over-year increase over twice that of conventional vehicles.

Costs to a particular owner, however, are just the start. The general public is paying heavily as the gas-powered industry gets smacked from many sides. A few examples:

•  Even a pro-EV trade group postulates that over a quarter trillion dollars of government help would be needed to bring the EV industry along in accordance with the vision of the Biden Administration and supporters in Congress. Much of that is being covered by federal and state taxpayers, including Illinois taxpayers, through subsidies for EV charging stations.

•  Buyers of conventional vehicles subsidize losses on EVs. Most EV makers are losing thousands of dollars on every EV they sell, according to the Wall Street Journal, which they offset by charging more for the gas-powered trucks and SUVs that the vast majority of Americans still prefer.

•  The federal per-vehicle subsidy is protectionist, imposing unknown, added costs on American consumers. Under the revised subsidy requirements, vehicle assembly must be in North America and various components must be American made, driving up costs for consumers. Ironically, that’s part of the so-called “Inflation Reduction Act.” Whether our trading partners retaliate remains to be seen, but that might impose further costs on Americans.

•  Most importantly, the forced transition to EVs is being made through federal average mileage requirements. Biden Administration rules require 40 miles per gallon for new vehicle averages by 2026, a 25% increase over previous rules. Those standards cannot be met without significant transition to EVs, and the rules arguably were issued illegally. One way or another, Americans have to pay for compliance with that mandate. “I want you to look at my eyes. I guarantee you, I guarantee you we’re going to end fossil fuels,” Biden said earlier. Higher mileage standard is one step towards that end.

Car makers and dealers are getting nervous about the the EV bandwagon’s shaky wheels, the Wall Street Journal reported just yesterday. There’s a “silent majority” in the auto industry questioning whether electric vehicles should be pursued exclusively,” Toyota’s president recently said to reporters, quoted in the Wall Street Journal

The Journal also quoted Ryan Gremore, an Illinois-based dealer, who owns several brand franchises, who said part the interest in EVs is due to limited supplies. That might give the impression of robust demand, but it is unclear how it will materialize when inventory levels at dealerships normalize, he added. “Is there interest in electric vehicles? Yes. Is it more than 10% to 15% of our customer base? No way,” Mr. Gremore said.

Also in Illinois, WREX recently reported that on the very day Pritzker hoped to “land the plane” on a deal with Stellantis that would bring electric vehicles to the its Belvidere plant, Stellantis told him the plant would be shutting down for an indefinite period.

Is Stellantis trying to shake down Pritzker for more sweeteners? It’s a fair question given that Pritzker has been negotiating to reopen the plant for EV production. As we discussed earlier, Pritzker has already boosted the incentives for EV makers as part of the Reimagining Electric Vehicles Act and wants authority for more.

Let’s hope Pritzker can find a better way to get the laid off employees back to work.

Let’s also hope — no, insist — that he ignores that new letter from EV makers essentially asking him to pledge to destroy their gas-powered competitors. Enough should be enough for the EV industry, which has become a corporate welfare state.

EVs are the future, we constantly hear. Maybe they are, but if so they shouldn’t need subsidies and their competition should not be destroyed.

*Mark Glennon is founder of Wirepoints.

This column was corrected and updated by changing the EV US market share from 3% to 6.5% and to add the material about increasing nervousness by Toyota and others over the EV market.