Real world realities of EV Absolutism have forced automakers to roll back their EV ambitions. As someone who was in the retail auto industry for almost 30yrs including selling EVs, this is no surprise. Politicians and the press corps have been hailing EV absolutism, but few factual inputs were sought from people who are in the retail end of the business, who also have a connection with real customers. Auto executives often seen as representatives in the auto industry are the most detached from customer needs in a showroom. Billions of dollars lost due to the misallocation of capital in the auto industry could have been avoided if auto companies listened to their salespeople who represent customers, not the government. Wasteful taxpayer funded subsidies have been compounded by asset managers who also hailed EV absolutism to boost stock prices and meet ESG mandates.
GM CEO Mary Barra outlined a few years ago that GM would go fully electric to give people who want an EV a ‘choice’. An EV absolutist product portfolio contradicts the notion of ‘choice' and totally ignores the millions of customers who want real choices. Recently GM not only lost $1.7 Billion from its EV business, it is depending on its internal combustion engine (ICE) vehicles to boost its financial outlook. After deciding to go all in on EV and by passing hybrids, influential dealers are also pressuring GM to introduce hybrids or risk losing more customers.
Ford lost $4.7 billion last year on EVs. It projects to lose even more this year, between $5 billion to $5.5 billion. Last year Stellantis decided to lay off 1,350 workers at a Jeep plant in IL so the automaker can finance its government –mandated and subsidized electric-vehicle expansion.
Meanwhile Toyota, which defied government pressure to go all EV, committed to listen to their customers and dealers to expand its hybrid line up, while still being dedicated to ‘all of the above in powertrain choices’ and market conditions. Toyota had record sales in 2023 and forecasts a record $30.3 billion net profit for the fiscal year ending in March as a boom in sales of hybrids keeps rising. With 11.2 million vehicles sold in 2023, Toyota is the world’s largest carmaker in sales.
According to Toyota, the minerals to make one EV can make 90 hybrids. Those hybrids reduce carbon emissions 37 times more than one EV over their lifetimes. This highlighted that the environmental advantages of EVs may be overstated. Considered heresy by EV absolutists, last June at Toyota’s annual meeting several U.S fund managers including NYC Comptroller Brad Lander and other fund managers from California and Europe tried to oust Toyota's chairman Akio Toyoda off the company’s board because the company wouldn't commit to a date to go all electric. Mr. Toyoda eventually won reelection with 85% of the vote. Mr. Lander voted against Mr. Toyoda saying " Toyota is sending a signal of resistance to climate transition". Mr Toyoda competently oversaw the interests of his company, it's a pity we don't have enough politicians who can competently oversee the interests of the taxpayer.
A few years ago, U.S automakers capitulated and pulled legal challenges to California Electric car mandates and also to federal government and bureaucratic EV dictates often from unelected officials. Press corps advocates for EV Absolutism also missed crucial points about the auto market. Transportation needs and the viable powertrain applications for them are vastly more diverse than their own personal preferences. Tesla may offer about 12 models but just one of Ford's models such as its Transit van comes in over 70 versions with optional powertrains to meet diverse needs. To be a true global automaker, markets, economies and conditions require much more diverse models and powertrain options. EVs cannot be a one all fits all solution.
No amount of taxpayer subsidies can change the laws of physics but politicians have tried to subsidize away the laws of basic economics such as scarcity. Even if the EV absolutist goal of enough EV fast chargers was achievable, there is not enough copper (whose supply chain is dominated by China) to make transmission lines for them. This over reliance on China for EV absolutism for transportation presents a national security risk, as some retired military officials warned the Biden Administration a few weeks ago.
While the many Western automakers purge their engineers and intellectual capacities to further develop internal combustion engines, should a major global conflict break out with a China-Russia axis, Western automakers would not be in the position as in WWII to be an arsenal of democracy to quickly transition to making tanks and other vehicles that need IC engines to counter them. China and Russia won’t be forcing their industries into the absolutism of a single powertrain type.
EV absolutism also affects the heavy-duty commercial truck industry. California is mandating that new big rigs be either EV or hydrogen powered. Big rig truck makers are feeling the pressure to make EVs instead of concentrating on viable ideas and market based solutions. The press has often missed important innovations in the heavy truck industry such as Edison Motors. A truck manufacturer started by Chase Barber and Eric Little, who from starting a trucking company with a logging truck in British Columbia developed a more real world viable idea for heavy-duty trucks than government bureaucrats could have ever thought of. It uses a diesel engine about half the average size of diesel engines in heavy trucks to power a hybrid electric powertrain similar to a freight train. Its efficiency in fuel mileage at 21 miles per gallon more than doubles current average mpg of heavy rigs, which are often less than 10 mpg.
John Kerry displayed the epitome of elitism surrounding EV absolutism recently when he attributed consumer resistance to EVs to 'disinformation'. No it's due to being in a real world, not a virtual one. People in real conditions like loggers, retailers and consumers have more common sense to the realities of transportation issues than the socialistic virtue signaling of government will ever do.