Over the past year, automakers have been scaling back their electric vehicle (EV) targets as consumer demand has weakened, despite significant subsidies from the Biden-Harris administration. Several major car manufacturers, including Volvo, Ford, and Mercedes-Benz, have revised their EV goals since February. These companies have reduced electric quotas or canceled previously planned product lines.
Experts suggest that the EV transition, which was once championed by industry leaders like Ford CEO Jim Farley as the future of automotive innovation, may be less attainable than initially believed. Challenges such as limited mileage ranges, insufficient charging infrastructure, and higher prices are contributing to consumer reluctance, according to the Daily Caller News Foundation.
The auto industry’s shift away from ambitious electric vehicle (EV) targets comes despite substantial subsidies provided through the 2021 Bipartisan Infrastructure Bill and the 2022 Inflation Reduction Act. The Biden administration has offered a $7,500 federal tax credit for certain EVs to help offset costs for buyers and allocated $12 billion to help automakers retrofit factories for EV production. Additionally, the administration has imposed strict regulations aimed at phasing out internal combustion engine vehicles, including a tailpipe emissions rule that would require approximately 67% of all light-duty vehicles sold after model year 2032 to be electric or hybrid vehicles, the outlet reported.
“Even after throwing money at EVs hand over fist, basically paying people tax dollars to drive these cars off the lots, you have a dire spiral of (1) not enough demand to support the number of cars being produced, and (2) the people you paid to buy them now wanting to go back to what they had before,” O.H. Skinner, executive director of the Alliance for Consumers and the former solicitor general of Arizona, said.
Autos over the last 5 years:
Auto CEOs: “we’re going electric by 2030 so I can become the toast of the town and get glossy magazine spreads written about how visionary and green I am.”
Engineers: “that’s not possible…”
Accountants: “that’s not possible…”
Customers: “we… https://t.co/ldca2L0n4G
— Alliance For Consumers (@for_consumers) September 4, 2024
Despite the generous tax credits, consumer adoption of electric vehicles (EVs) has lagged behind expectations set by the Biden-Harris administration and automakers. While EV sales grew by 50% in the first half of 2023 and 31% in the first half of 2024, these rates fall short of the 71% increase seen in the first half of 2022. Additionally, a June poll from The Associated Press-NORC Center for Public Affairs Research and the University of Chicago’s Energy Policy Institute found that 46% of respondents were unlikely or very unlikely to purchase an EV, compared to just 21% who were “very” or “extremely” likely to do so.
Consumer sentiment towards electric vehicles (EVs) remains tepid even among current owners. A June survey by McKinsey & Company revealed that nearly half of American EV owners are considering switching back to traditional vehicles, especially when they have seen trade-in value plummet and replacement battery costs soar.
“The [EV market] headwinds come from physical realities that translate into economic and practical realities,” Mark Mills, a distinguished senior fellow at the Texas Public Policy Foundation and an expert on the automobile market, told the DCNF. “EVs are inherently more expensive… and most consumers are very price sensitive; EV fueling for most people is far less convenient… [and] EV fueling infrastructure is extremely expensive and will take a long time to build out.”
As of January, the average cost of a new electric vehicle (EV) was 10% higher than that of a standard vehicle, with the 2024 electric Ford F-150 priced approximately $20,000 more than its gasoline counterpart. The Ford F-Series was the best-selling vehicle in the U.S. in 2023.
In August, Ford canceled plans to produce a three-row electric SUV and scaled back production of its F-150 Lightning pickup truck in January. These changes follow Ford’s $4.7 billion loss on EVs in 2023, translating to nearly $65,000 per EV sold. A Ford spokeswoman reiterated previous statements to the DCNF, emphasizing that the company will not launch new vehicles unless they are expected to become profitable within 12 months, the Daily Caller noted.
In addition to high costs, expanding charging infrastructure has proven challenging for manufacturers. As of April 2024, the Biden-Harris administration had established only seven EV charging stations across four states, despite the Bipartisan Infrastructure Bill allocating $7.5 billion to develop a national EV charger network. Factors such as low demand, union requirements, and diversity, equity, and inclusion initiatives have contributed to delays. The Department of Transportation’s stipulations, which include “intentional outreach to underserved communities” and hosting “neighborhood block parties” to qualify for funding, have further slowed the project’s progress.
“The Biden-Harris administration is spending billions in tax incentives to pay auto companies to make EVs, and billions for tax credits to pay households to buy the cars,” Furchtgott-Roth told the DCNF. “Still, Americans are too smart to fall for a product that is not suited for them.”
Disclaimer: This article may contain commentary which reflects the author’s opinion.