Ford reported that it’s going to lose $3 billion on electric cars in 2023.
Unlike most automakers, Ford reports its electric vehicle numbers separately, but experts estimate that most car companies are losing similar amounts on the dead end business.
Ford’s investment in Rivian’s electric cars can’t be helping. Last year the startup electric pickup truck maker was spending $220,000 to make the electric vehicles that it sells for $81,000.
That’s bad news for George Soros and for CalPERS: California’s massive public employees retirement fund and a ticking time bomb which owns hundreds of thousands of shares in Rivian.
GM and Ford both project that their electric cars will be profitable in a few years. Ford plans to make 2 million electric cars every year by 2025. That would be impressive considering that Ford only sold 61,575 of them in 2022. It sold 3,624 electric vehicles in Feb 2023.
That’s a long way from 2 million.
GM plans to sell 1 million electric cars by 2025. It sold less than 40,000 in 2022.
Projections like these might make sense if GM and Ford had hot products and untapped market demand. Instead there are too many electric car models chasing a tiny market. Electric car sales have yet to break the million mark. Most of the electric car activity continues to be concentrated in the luxury SUV market which only has so many buyers able to afford them.
Even the “affordable” electric cars, like GM’s Bolt, start at $30,000, and lose as much as $9,000 for the company.
The only way to create demand for electric cars is through government mandates.
After 2035, if you want to buy a new car in California, it’s electric cars or it’s nothing. California’s mandates that fined car manufacturers, forcing them to buy credits from electric car makers like Tesla, financed the electric car industry. By 2035, California will simply eliminate the competition.
New York, New Jersey, Oregon and Washington have also moved to ban the sale of new cars. About a dozen Democrat states have similarly decided to prevent residents from buying cars. Virginia’s House voted to drop its car ban, but the state’s Senate Democrats have kept it in place. Biden has proposed a similar ban nationwide following its adoption by the EU.
By 2040, GM expects to stop making and selling cars on the assumption of such a ban.
George Soros has reportedly lost over $1 billion with his Rivian investment, and his other electric car investments may seem shaky, but in the long term the leftist politicians he has backed are expected to eliminate the competition and clear cars off the roads and highways.
Automakers are spending billions to build electric cars that no one wants and no one can afford because governments have assured them of a captive market. And after all that money flushed down the drain, their lobbyists are aggressively pressuring legislators to impose new bans and keep the existing bans in place. They’ve also been seduced with the promise of subsidies and tax credits that will free them from the pedestrian business of actually turning a profit.
Woke pension funds and party donors have kept the pressure on to see that it pays off.
Detroit’s bet that customers will just accept this as the new normal and just pay higher prices for worse performance is a bad one. The electric car mandates are the work of a Democrat party that is closely tied to a wealthy elite even as Republicans are becoming a working class party. Assuming that half the country will just accept being priced out of the car market when car ownership remains the key to economic and social mobility is as arrogant as it is clueless.
Even assuming that Republicans remain too dysfunctional and outmaneuvered to significantly roll back the leftist agenda, the new car market will drastically shrink. Americans, like Cubans, will desperately work to keep old cars going because for much of the country they will be the only option. The number of illegal cars on the road will dramatically increase. But as brownouts and energy shortages continue to hammer California and other blue states that have also gone all-in on solar and wind power, those will be the only cars that can actually remain on the road.
Woke car companies will have their monopoly handed to them only to find that it’s worthless.
Like their former European counterparts, American automakers will become even more deeply entangled with the government. The inverse spiral of subsidies and sales will climax in bankruptcies. Detroit has failed to innovate and electric car theater is no substitute for actually doing the work to make the cars that people want rather than the ones ad agencies try to make them want.
Letting government mandates instead of consumer demand drive sales is embraced by companies that have given up on even trying to make an appealing product. If electric vehicles were legitimately popular, it wouldn’t take a ban on cars to make them economically viable.
American automakers used to be revolutionary, now they’re the regime.