EV Market Imploding, So Biden Is About to Mandate Them

AP Photo/Evan Vucci

Story after story has come out about the implosion in the EV market. 

As with many luxury goods, the market can quickly expand and just as quickly top out, as the latent market demand gets filled. This is what happened with electric vehicles, which appeal greatly to a small cross-section of the market, but not so much to the general car buyer. 

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Beege has been on this beat and done an outstanding job, so I won't duplicate her work proving that the market for EVs has slowed dramatically. All you really need to know is that the market is more than saturated and the big automakers are crying uncle, having lost billions trying to fill a demand that only exists in the fevered imaginations of the environmentalists. 

My colleague once removed Stephen Greene wrote an excellent piece over at PJ Media about the Biden administration's response, and it is exactly what you would expect: if there is no market, simply force everybody to do what they are unwilling to do by choice. 

Expected as soon as Wednesday, the Biden EPA "is poised to finalize emissions rules that will effectively require a certain percentage — as much as two-thirds by 2032 — of new cars to be all-electric," according to Inside EVs. Politico sells the expected rule as one that would "tackle the nation’s biggest source of planet-warming pollution and accelerate the transition to electric vehicles."

The rule would require carmakers to cut their average emissions of carbon dioxide by 52% between 2027 and 2032. EPA projects that the standard would push the car industry to ensure that electric cars and light trucks make up about 67% of new vehicles by model year 2032.

Originally set to be announced in April of 2023, but again according to Inside EVs, it "received a strong rebuttal from dealer groups, car manufacturers, and petroleum companies." 

"Many said the U.S. was not 'ready' for such an aggressive EV push, as prices remained higher than internal combustion cars on average and the nation's charging infrastructure is rather lacking."

Under the new rules that the EPA is set to announce, that will all change — not by making EVs any cheaper but by imposing such strict emissions requirements on gas and diesel engines that most buyers won't be able to afford a traditional car or light truck in the years after 2027.

And, if we're being brutally honest, right now the EV industry needs all the official help it can get from Washington. Despite billions of dollars in tax credits for EV purchases, sales seem to be plateauing. Tesla's rapid growth has stalled like a Model 3 in an arctic blast, Fisker automotive has "paused" manufacturing of new vehicles while it tries to secure new funding, Ford is moving away from EVs production in a big way, and Toyota is looking smarter than ever for keeping most of its focus on hybrid vehicles.

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I love Stephen. Brilliant guy, a great writer, and he is reputed to be a good host. Not that I would know, since I haven't visited Colorado in decades. 

The problem with electric vehicles isn't really cost, although that is one of the important variables. It is more fundamental than that. EVs are a perfect fit for a slice of the market and frankly would make a great second car for a lot of people who live in suburban areas. They are slick, fun, and at least Teslas are impressive technologically and pleasant to drive. 

They are not practical for people who need flexible, reliable transportation for moderate to long distances, and they certainly don't work for people without the ability to charge nightly in a garage. They are a niche product right now. 

The market has spoken on this matter: the average car buyer doesn't want and EV, and people don't even want to rent them. Ask Hertz about that. They are losing their shirt on their Tesla fleet, and the CEO just got booted for going all-in on Teslas. 

Biden is doing what all politicians do--most notably Obama, who pushed out Obamacare enforcement until after his reelection--he is loosening rules only to clamp down hard a bit later:

These standards could first loosen the tough EV requirements between 2027 and 2030, but then mandate an aggressive ramping up of EV sales from 2031. In other words, these revised rules would give car companies a bit of a pass on EVs in the short term, while still pushing for a mostly-electric future starting in the next decade.

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Liberals are convinced that when markets tell you that people don't want something the solution is always to force them to do it anyway, and that is the intent of the upcoming regulations. 

The government already literally pays people thousands of dollars to buy EVs, and even with that incentive, people are balking. EVs are just not ready for Prime Time, and may never be. Billions of dollars are being spent on building chargers, and the results have been dismal. 

Lest you think that a Biden loss in November would ensure a quick reversal by Trump, the regulatory process makes that much harder than you would think. Biden's strategy is to lock things in so that the voters and consumers will have little choice but to comply with a regulation that only the loony Left believes is a good idea. 

Finishing the rules in the next two months could be critical to insulating them from rollbacks by a potential second Trump administration. Former President Donald Trump has vowed to reverse Biden’s major climate initiatives, directing special ire at what he calls the administration’s “ All Electric Car Lunacy.”

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Consumer choice and economic realities mean little to the people who firmly believe they know best about everything all the time. If you don't like what they are doing, just suck it up.

One unintended consequence may be a boom in the internal combustion engine market toward the end of the decade, as smart investors buy up ICE cars in order to stockpile them for later sale to disappointed EV buyers. A healthy secondary market in used ICE cars may be one consequence of this regulation.

Don't expect them to be cheap, though. If EVs don't meet consumer demand, the demand will be high. 

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John Stossel 5:30 PM | July 13, 2024
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