The Biden administration has made the promotion of electric vehicles a goal in its plan to combat climate change, but recent developments have crippled the effort to replace gasoline-powered vehicles with those running on electricity.
Despite massive subsidies and government mandates, demand for electric vehicles is plummeting after a jolt of interest. Blaze News spoke with industry insiders to uncover the reasons behind this lack of demand, which seems to persist in spite of government efforts to encourage and/or mandate the switch to electric vehicles
‘ Electric cars are really not feasible for many, many people.’
Auto industry companies can no longer ignore the lack of demand. Since the end of 2023, many companies have thrown in the towel.
In April, the Ford Motor Company announced several course corrections that severely undermined the campaign to put more Americans in electric vehicles. Ford said it would significantly scale back its plans to produce electric vehicles, including the cancellation of two new electric vehicle models, an SUV and a pickup. It also decreased its effort to build up factories for EV cars and components.
Despite Ford reporting an overall profit of $4.3 billion in 2023, the company suffered a massive loss of $4.7 billion from the Model e EV division, according to Yahoo Finance.
EV manufacturer Rivian reported that it was losing an astonishing $43k per vehicle it sold in the last period, although the company says it believes future sales will be profitable.
Even Tesla, which has been considered the dominant EV brand, has struggled to continue the increasing pace of sales of electric vehicles. In April, the company reported the first annual drop in sales since the beginning of the pandemic.
On Friday, Tesla announced a recall of more than 124,000 vehicles over a seatbelt malfunction, though it said it will be repaired with an over-the-air software update. The company’s stock skyrocketed in 2021 but has since plummeted to less than half of that value currently.
Why are automakers turning away from electric vehicles? Experts say demand for the cars has plummeted.
‘Automakers tried to lead with ideology first, and a good consumer product second, that really that just doesn’t work.’
In recent months, it’s becoming more and more obvious that the demand for electric vehicles is not meeting the supply encouraged by the federal government through subsidies and demands on the industry.
Brian Moody, the executive editor of Autotrader, spoke to Blaze Media about the state of the electric vehicle industry.
“I think the issue with the electric cars is that the automakers tried to lead with ideology first, and a good consumer product second, that really that just doesn’t work,” he explained.
He pointed out that people know they can do some of the repairs on gas-powered cars, but that is simply not the case with electric cars and is keeping many buyers away. Moody said many buyers were early tech adopters but that was a limited pool of customers.
“So they want the newest, latest thing, they want the newest Apple Watch, they want the newest Air Jordans. And that’s what I think has happened with a lot of the electric cars. But once you ran out of those people or they got what they wanted, now you have to start appealing to just the average person,” he continued.
In order to appeal to the average person, Moody says the equation is very simple.
“This is going to be great for your life, this is going to save you time, this is going to save you money,” he added. “And it’s going to be more convenient for you. That’s what people buy.”
Ray Huffines, the president and CEO of Huffines Auto Dealership in Texas, also told Blaze Media that there’s just not enough demand from the public for electric vehicles.
“Electric cars are more expensive than regular gasoline-engine vehicles. And even with the incentives, that doesn’t necessarily get them to a competitive price. Also, the incentives are confusing, in many ways, and there’s a lot of limits on what vehicles will qualify and on the income of the buyer,” said Huffines.
“The demand is not robust, it’s slowing down. There are plenty of electric vehicles available but not enough customers,” he added.
He went on to say that the government is trying to force the sale of cars that lose money for manufacturers and don’t make any money for the dealers.
“So you know, the government can do this, but it’s really problematic from a business standpoint of how in the world the manufacturers can make a profit,” he concluded.
‘A pretty big uphill battle.’
California Gov. Gavin Newsom has also tried to lead the country in imposing electric vehicles on Americans by signing an executive order in 2020 to ban all sales of gasoline-powered cars by 2035. The Democrat was mocked by critics on social media for what was seen as a draconian regulatory expansion.
“For too many decades, we have allowed cars to pollute the air that our children and families breathe. Californians shouldn’t have to worry if our cars are giving our kids asthma,” said Newsom at the time. “Our cars shouldn’t make wildfires worse — and create more days filled with smoky air. Cars shouldn’t melt glaciers or raise sea levels threatening our cherished beaches and coastlines.”
Moody and Huffines are in agreement in their assessment of the plan: It’s just not feasible.
“Yeah. I don’t think so,” said Moody, who added that even in a place like California where electric car sales were higher than the rest of the U.S., it was nowhere near the target created by Newsom.
The California New Car Dealers Association has said that electric car sales had surged to comprise 21.5% of sales in the first quarter of 2023. EV sales grew by 20% in the second quarter, then dropped slightly in the third quarter, and dropped significantly by 15% from the second quarter high to the fourth quarter.
“That’s still a pretty big uphill battle to companies that make money selling a multitude of things,” said Moody.
Huffines added that EVs would only work for people who live in a house and not in very dense neighborhoods.
“There’s really no dependable place where you can charge your car. The cars are expensive. So, people that have a limited budget, and now with the inflation like it is and interest rates, people’s budgets are very tight,” Huffines responded.
“They’re having to make very economical decisions about their purchases, including automobiles. So, electric cars are really not feasible for many, many people,” he concluded.
Defenders of the EV industry say that the decrease in demand is just a sign of a maturing market, but unless something changes, none of the electric vehicle dreams of Biden or Newsom will come to fruition.
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