After years of hype and politically juiced projections, the electric vehicle push is colliding with the only constituency that matters in a competitive market: actual buyers. The result is a staggering shareholder bill for the EV fantasy at General Motors, Ford Motor Company, and Stellantis—three companies that overpromised on demand and underpriced the real costs of forcing an unready product into America’s most important vehicle categories. According to the Wall Street Journal:
“U.S. automakers have been pumping the brakes on their electric-vehicle businesses for months, and the costs are piling up.
Following years of investments into EV technology, the Detroit Big Three—General Motors, Ford Motor and Jeep-maker Stellantis have announced more than $50 billion in combined write-downs.
EV sales fell more than 30% in the fourth quarter, after a $7,500 federal tax credit that had juiced U.S. sales expired in September. Demand cratered for the highest-profile EVs, from Tesla’s Cybertruck to Ford’s much hyped electric pickup. Automakers expect demand to remain muted this year.
GM, which is forging ahead with much of its EV strategy, albeit at a smaller scale, didn’t have as much to cancel and write down. The company, for instance, still aims to build big EV trucks. Ford, meanwhile, is changing course.
“Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting,” Ford Chief Executive Jim Farley (pictured above in a Ford 150 Lightning electric truck) has said. Ford now says it will make one low-cost EV pickup by 2027.
Automakers’ retreats and massive write-downs have come as Republican lawmakers abolished a lucrative federal tax credit for EVs last fall, while also doing away with federal fuel-efficiency mandates. Even with federal support, EV demand was below expectations.”
None of this should surprise anyone who has followed NLPC’s long-running (going back to the Obama administration) skepticism about EVs. Over the past year, NLPC has tracked how Detroit’s EV plans have repeatedly turned into shareholder pain—first as Ford’s EV spending spiraled into a capital bonfire, then as the broader market reality set in with EV demand weakening on both sides of the Pacific, and even as flagship programs like the electric F-150 started looking less like “the future” and more like an expensive misread of buyer preferences.
The governance question now is straightforward: who authorized billions in capital allocation premised on a policy regime that could evaporate—and why were boards content to let management treat taxpayer support as a permanent business model? Shareholders should demand answers, and ask why the executives who made those decisions still enjoy employment atop their respective companies.
