Automakers have been backtracking on their EV goals over the past year as consumer interest failed to keep up with the vision automakers had.
That vision appears to have been born from the idea that if the federal government mandated people to drive electric cars, then people would buy them. [emphasis, links added]
Not only did consumers rebel against this EV future, but they also voted for a candidate who had vowed throughout his campaign to end the Biden-Harris administration’s EV mandate.
On Monday, President Donald Trump made good on the promise, signing the “Unleashing American Energy” executive order. Among other things, it eliminates the EV mandate to “promote true consumer choice.”
Now, the automakers who were already losing billions on EVs could be in more trouble, depending on how much EV sales were buoyed by the mandates the automakers were counting on.
“I think the EV mistake has basically crippled the U.S. automotive industry, and unless there are bailouts, I can’t see these guys surviving,” Jack Lifton, executive chairman of the Critical Minerals Institutetold Just the News.
Scaling back
Trump’s order revokes a non-binding goal Biden had set in 2021 to make half of all new cars sold to be electric by 2030.
To block the EPA’s tailpipe emissions standards, which by some estimates would require 66% of all new cars sold in the U.S. to be electric by 2032,
Trump would have to work with the EPA to rewrite its rules. Either that or Congress could legislate the rule away.
While most consumers still want gas-powered cars, EV adoption rates continued to climb last year.
According to Cox Automotive’s Kelley Blue Book, EV sales jumped 15.2% year over year in the last quarter of 2024, and full-year EV sales reached 1.3 million, an increase of 7.3% in 2023.
Automakers, however, had expected sales volumes to be much higher, and when they weren’t keeping pace, they began realigning their EV targets with what consumers appear to want.
Ford had planned to invest 40% of its capital budget in electric vehicle lines, but in August, that was brought down to 30%. The company also scrapped plans for a three-row electric SUV.
General Motors had planned to sell only zero-emission vehicles by 2035. Last July, the company said it was pushing back the opening of an EV manufacturing plant in Michigan to mid-2026, and pausing plans for an electric line in its Buick brand.
Stellantis also scaled back its EV targets last fall and temporarily suspended production of an EV Fiat 500 due to sluggish demand.
Meanwhile, the automakers have also been losing billions on their EV bet.
Ford, which separates its EV business from other parts of the company, lost $3.7 billion in the first three quarters of 2024. General Motors expects to narrow its losses on EVs this year by $2 billion to $4 billion.
All-electric Rivian lost $75,563 on every EV it sold in the third quarter, rivaling the $58,391 that Ford lost for each EV it sold, according to energy expert Robert Bryce.
Despite these losses, Bryce reports, the Department of Energy Loans Program Office gave the carmaker a $6.57 billion loan guarantee.
All electric Tesla saw its net income rise in the third quarter of 2024 to nearly $2.17 billion, or 62 cents a share, up from $1.85 billion, or 53 cents a share, a year ago.
However, Politico reports that the automaker earned $10.7 billion over 10 years selling credits from government climate programs designed to encourage automakers to switch to EVs.
This funding stream accounted for 33% of the company’s profits. If Congress repeals the program, that could impact Tesla’s profits considerably.
Read rest at Just The News
