The supposed electric vehicle transition keeps running into the same obstacle: reality.
Over the past week, a cluster of market signals has reinforced what National Legal and Policy Center’s Corporate Integrity Project has argued for years: EV adoption has been far more subsidy- and mandate-dependent than the EV-hype crowd has wanted to admit. With or without government support, electric vehicles are failing to live up to their promises, and the costs are now showing up in earnings, margins, price wars, and political backlash.
For example, Ford‘s recent sales numbers confirm that consumers still want internal-combustion vehicles and don’t seem interested in fully transitioning to electric vehicles anytime soon. According to the Wall Street Journal:
Ford Motor vehicle sales in the U.S. declined in January as the company continues to cut down on electric-vehicle production.
The Dearborn, Mich., carmaker said Wednesday that it has sold a total of 135,362 vehicles in the U.S. last month, a 5.3% decline over the prior-year period. EV sales were down 69% to 1,743, and hybrid-vehicle sales fell by 6.1% to 12,485.
Internal-combustion cars declined by the least, with sales down 2.3% to 121,134…
In December, Ford said it plans to absorb $19.5 billion in charges mainly at its electric-vehicle business as the company tries to adjust in the face of sinking EV demand and focus on its lineup of gas-powered vehicles. For its electric vehicles, the company plans to shift more to hybrid and so-called extended-range electric vehicles that include onboard gasoline engines.
Ford has lost $13 billion on its EV business since 2023.
Meanwhile, Chinese EV sales, once the global bright spot in a struggling industry, have also slowed as the Chinese government reduces subsidies, according to the Journal:
Chinese electric-vehicle stocks dropped on Monday after manufacturers reported weak January sales due to waning government support.
Market leader BYD said it sold about 210,000 vehicles in the month— down 30% from January last year and missing expectations, according to Citi.
Analysts were expecting a faltering start to the year after tax breaks were cut at the start of January. Beijing is withdrawing financial support for the EV industry after years of generous subsidies led to excess production capacity and cutthroat competition.
NLPC has warned that EVs are a losing investment for several years. Our main concern has been our investment in General Motors, which recently took a $6 billion hit of its own on failed EV investments.
When Chinese EVs were outperforming the American competition, pundits celebrated the “quality” and “affordability” of Chinese offerings as the reason. We also heard directly in conversations with GM representatives that they were concerned the company was at risk of falling behind China on EVs.
That argument was deeply flawed and still doesn’t hold up. The reality is that the Chinese government was willing to subsidize a struggling market longer than the U.S. was. Governments and auto manufacturers worldwide are beginning to accept that consumers simply don’t want electric vehicles to the degree producers promised.
(Pictured above: Ford Chairman/CEO Jim Farley in a Ford F-150 Lightning EV)
