Is the EV Market Going to be the Next Big FLOP!
Automologist MAC writes about the next thing to go bust, big time.
The Impossible Dream.
Some of us will be able to remember the Japanese Property bubble, or the Dot.Com bubble examples of ‘follow-the-herd’, get-rich-quick booms that went bust spectacularly, destroying the wealth of so many small investors. In the world of big-business car manufacturing, there is the story of Edsel Ford, son of Henry Ford, who decided that Ford was going to build the car that everyone would want to buy. They built half a million of them. Trouble was, the public hated them and no one did buy them. No one had thought to ask the consumers what it was they wanted. Ford narrowly avoided bankruptcy as a result.
There is currently a growing group of economists that are predicting that EVs could well turn out to be one of the greatest flops of all time, for the simple reason that the consumer does not want them, unless they are into virtual signalling, that is. The comments come amidst news that the EV push at Detroit’s favourites, Ford and GM, have hit speed bumps that have dented their profits and causing them to think about a drastic change to their route, largely due to raw material supply problems and unfair competition from China-made EVs.
Ford quarterly earnings report showed that the companies EV unit lost USD1.3 billion loss which follows a USD1.08 billion loss reported in the previous quarter. As a result, the company is scaling back its Mustang Mach-E production and reducing its planned USD12 billion investment which includes delaying its second battery plant in Kentucky.
GM saw its quarterly profit shrink by USD1.5 billion because of “higher costs and the impact of selling more EVs”, according to CFO Paul Jacobsen. The company has announced that they will abandon the goal of producing 400,000 by 2024 but instead focus on the goal of getting to 1 million overall by 2025.
One of the statistics that was being talked about on a popular US TV news show was a loss of between USD40,000 and USD60,000 every time Ford sells an EV, which looks like a recipe for disaster to me. This is despite Federal Government sweeteners designed to get the public to fall in love with EVs. Currently, when you buy an EV in Americaland, you receive a cheque for USD7,500—what a great way to spend taxpayers’ money. There is also a hidden subsidy—the US government is subsidising the set-up and running of battery factories in the US of A, primarily as a foil against future domination of the market by companies from the PRC.
Despite the subsidy, the great American people are not interested. Car lots in the US are full of unwanted EVs. The only area for electric which is seeing interest is Plug on Hybrids (PHEV), with which the customer has the choice between battery or petrol, but these are not being manufactured anymore because of government mandates demanding that all cars are EVs.