There’s nothing wrong with the concept of electric vehicles. The problem—as with most economic problems in today’s world—is the State. The government has decided that fossil fuels are evil, and so are the vehicles that burn them. They hate fossil fuels for all kinds of specious and hysterical reasons that mostly revolve around “saving” the planet… most of which are nonsensical, at least if you want to have an industrial civilization.
BY THE INTERNATIONAL CHRONICLES
Outside of Tesla, fewer and fewer people want electric vehicles (EVs). Other car companies have spent billions producing EVs that buyers don’t trust. Why are they developing products their customers clearly don’t want? Perhaps they thought that if Tesla, an undercapitalized start-up run by an eccentric with no auto manufacturing experience, could become a trillion-dollar company, then how hard could it be? They forgot that Tesla is run by a genius who designed an electric car from the ground up with lots of technical innovations. GM, Ford, and the other legacy companies are run by ESG-oriented suits whose first consideration is kowtowing to their ESG/DEI-centric HR and compliance departments.
FLIP FLOP
Apple was working on an EV, but they just pulled the plug on it after dropping US $10 billion. Building a good EV isn’t as easy as Elon made it look.
It’s almost like there’s something wrong with the idea of EVs. Maybe it’s the fact that when you trot down to your neighborhood EV dealer, stopping for a soy latte and some tofu, you’re buying an expensive iPhone on wheels. You tell yourself you’re excited to be saving the planet as you power the bad boy up with some vegan electricity subsidized by the pronoun-compliant government bureaucrats, but now those subsidies are being pulled (governments are bankrupt — surprise), and your vegan electricity is being imported from Indonesian coal mines and it’s costing a lot more than your old planet killing V8 supercharged testosterone-boosting muscle car and you’re pissed. Or maybe it’s the cost? Or maybe most people just don’t appreciate being forced to switch their cars because the Woke alphabet people say so?
It could be any of these things, but you know what? If you ask me, it’s quite simple. It is this very simple metric by which so much of human behavior can be deduced. When it comes to spending their hard-earned cash, what folks want is a high-quality item at a reasonable price and one that is more competitive than alternatives. The fact is that when it comes to their wallet nobody gives a pig’s behind about saving the planet. And THAT, my friends, is where the EV fraud stumbles, trips, and then jarringly smashes its face into a brick wall of reality.
And this brings us to our beer-drinking, bratwurst-eating friends — some of the best designers and manufacturers of cars ever. The Germans, specifically, Audi, are doing a massive U-turn on electric vehicles. DROPPING their earlier goal of producing only electric vehicles by 2026. And they’re not the only ones.
CEO Gernot Döllner told Bloomberg. “In the end, we decided to spread it out to not overwhelm the team and the dealerships.”
That’s what he actuallysaid to Bloomberg, but you know what he’d say to his mates down at the local kneipe? He’d tell them what an insider in the European automotive industry told me over a year ago — that there is no demand for these stupid things and that many of the European auto manufacturers were going to end up being stuck with unwanted inventory… and some would probably “not make it through.”
Speaking of “others.” Mercedes Benz is also doing the same. They are bailing on EVs and instead are ramping up production of ICEs.
The company now expects sales of electrified vehicles, including hybrids, to account for up to 50% of the total by 2030 – five years later than its forecast from 2021, when it aimed to hit the 50% milestone by 2025 with mostly all-electric cars.
And perhaps most curious of the bunch: Apple. After 16 years of teasing entry into the EV market, Apple just bailed on their long-awaited electric car.
One other thing worth mentioning is that Apple sits on a gobsmacking $162 billion in cash. And even with all that cash, they decided to pass on the “EV revolution.”
What to make of all this? As is obvious, everyone is a “greenie” until it hits their pocket. It seems to me that maybe, just maybe, Audi, Mercedes, and Apple have figured out that EVs are not the silver bullet they were promised to be.
And speaking of Apple, guess what they’re focusing on instead…
Many employees from the Special Projects Group (SPG), responsible for the car, will transition to the artificial intelligence division led by executive John Giannandrea. Their focus will shift to generative AI projects, aligning with the company’s evolving priorities.
Why, AI, of course!
WHAT’S WRONG WITH EVs?
There’s nothing wrong with the concept of electric vehicles. The problem—as with most economic problems in today’s world—is the State. The government has decided that fossil fuels are evil, and so are the vehicles that burn them. They hate fossil fuels for all kinds of specious and hysterical reasons that mostly revolve around “saving” the planet… most of which are nonsensical, at least if you want to have an industrial civilization.
The kind of people who go into government hate cars and the freedom that they give the common man.
That’s why they want to put everybody in 15-minute cities, where you presumably won’t need real cars, just EV golf carts.
The federal government has lots of legal mandates designating what kind of cars manufacturers can and cannot make. Average fleet mileage specifications are a major factor in determining what kind of cars we have. But governments are going further, essentially trying to ban most conventional ICE (internal combustion engine) cars by 2035 or even 2030. Their mandates against ICEs have skewed production towards electronic vehicles.
At the same time, they’ve offered large tax advantages to consumers, getting them to buy EVs that they’d otherwise avoid. So, although EVs have merit for certain places and conditions and have a place in the automotive world, government pushing and pulling creates huge distortions in how people act.
MASSIVE LOSSES
Last year, Ford lost $4.7 billion on its EV models, and it’s projected that this year, it could lose up to $5.5 billion.
The Wall Street Journal estimates that Ford could actually boost its profits by 50% by ditching EVs altogether. It seems Ford and other companies could care less about serving their shareholders or their customers.
What is really going on here? The shareholders and customers take a back seat to legislators and regulators. It’s perverse.
Cars have been with us for well over 100 years and have created a longstanding subculture. All the car companies’ founders were “car guys.” They loved cars, they loved racing, and they liked the idea of freedom that they promoted. They were a special breed. But the car guys no longer run car companies. They’ve been replaced by suits.
Today’s car companies are run by bean-counting accountants and, increasingly, by the ESG designates who control their boards. A lot of women (GM is run by Mary Barra, and six of its 13 directors are women) are involved in the big car companies today. Nothing against women, but the fact is that women have never been more than a tiny part of car culture.
If you look at their corporate websites, you’ll see that they emphasize how green and PC they are. Not how great their products are. The people running these giant car companies appear much more interested in phony environmental objectives and promoting ESG than they are in making technologically advanced and interesting cars. Their legal and regulatory compliance departments greatly outnumber their engineering departments. It’s an industry in decline. For proof, read excerpt below…
“Ms. Barra, you say GM won’t be selling gas-powered cars by the year 2035. When you say these words, is it part of an unspoken political bargain to protect the trade and fuel-mileage concessions that allow large markups on big SUVs and pickup trucks?”
Normal market logic goes out the window when company leaders are indulged and even required to say fantastical, unrealistic things about the future. I’ve long borrowed the term “sophisticated state failure” for the Western world’s energy policies. Because government must always be seen doing something, nonsense ideologies, even when spoken purely for effect, end up “gamified” (made a game of) in government programs. Thus the Obama auto bailouts: They left Detroit permanently dependent on artificially inflated pickup profits to subsidize loss-making electric vehicles served up as a gesture by the political class.
The resulting program, the Biden Transportation Department was legally obliged last year to admit, fails any cost-benefit test. Climatewise, the truth is even sadder.
Dollar for dollar, subsidizing EVs for Americans is a subsidy to the rest of the world to use more fossil energy and cause more emissions, a reality that can’t escape political notice forever.
Take Norway, portrayed in GM ads as EV heaven. As a Morgan Stanley research note first observed two years ago, Norway has seen no decline in oil consumption related to EVs, though users receive thousands of dollars in annually recurring subsidies and EVs accounted at the time for 64% of new-car sales.
The reason is increased use and ownership of gas-powered cars, especially for trips that EVs aren’t suited for.
Now comes an update from the natural-resource consultants Goehring & Rozencwajg that only darkens the picture. Despite some of the greenest electricity on Earth, a Norwegian still needs to get 45 years of use out of his imported EV battery (expected life 15 years) to offset the global CO2 cost of producing it.
As I’ve noted before, secretly even the Biden administration knows the truth about all this. Get ready for a colossal irony. Europe’s emissions peaked in 1979, America’s peaked in 2005, and China’s are expected to peak as soon as next year. The reason wasn’t energy policy. Peak emissions happen because of slowing population and economic growth plus the normal, uninterrupted, market-driven hunt for energy efficiency (which can certainly include cost-effective investment in renewables).
Unfortunately, global energy efficiency, which was improving by 1.9% annually for more than a decade, has been growing at only half that rate since 2021.
The numbers, from the French research firm Enerdata, may be distorted by Covid, but recessions and economic crises usually accelerate growth in energy efficiency. By stimulating more energy consumption overall, by stimulating inefficient solar and wind investments, which occasion large emissions-creating increases in mineral mining for less energy output, it’s distinctly possible our poorly designed green subsidies work just like poorly designed fossil-fuel subsidies. They make emissions worse and slow progress toward a global peak.
Well-adjusted humans have an instinct to avoid embarrassing persons in positions of authority, whether it’s Ms. Barra embarrassing the politicians who control her life or journalists embarrassing Ms. Barra.
For now, GM’s stock price isn’t zero for one reason: Ms. Barra has skilfully avoided making progress on eliminating the products that make money in favor of those that don’t. In fact, GM has been enjoying some highly profitable quarters thanks to five-figure markups on pickups.
The stock, though, has remained in the doldrums for 15 years, ever since the Obama bailout. Even GM’s commitment last year to use its giant cash earnings, which come only from gas-powered vehicles, to buy back a quarter of its shares hasn’t changed the trajectory, though this commitment can only be interpreted as a silent contradiction showing that, yes, GM doesn’t plan to stop making money.
Ms. Barra and other CEOs have reasons for a strategic silence on the EV folly. But it comes at a cost. I doubt any intelligent, well-read and informed elected politician could have pictured the misallocation of perhaps ultimately $1 trillion on so deluded an enterprise as the US government pretending to convert the nation’s vehicle fleet to electricity to change the planet’s weather.
Even the name of what used to be Chrysler has changed to Stellantis, a word that stands for nothing. Who, whether an employee or a customer, can have loyalty to an artificial financial construct? No wonder their stocks sell for four or five times earnings.
RE-EVALUATION
Amid many billions in losses, sunk costs, and underwhelming consumer demand, car companies are finally reevaluating their EV strategies.
Many are pulling back or ending them.
Do you think the EV craze is on its way out? Where is this trend headed?
EVs have their pros and cons. It’s still early days of technological development for electric cars… and there are positive aspects.
EVs have very low centers of gravity due to where the batteries are placed. Everything else being equal, they should handle better than ICE cars. Although they also weigh 500-1000 pounds more than they should, because of the batteries, and that’s bad for both handling and tire wear. On the other hand, they have many fewer moving parts than ICEs and should be low maintenance—until the battery gives out after x number of miles. Then you might as well junk the car.
EVs brake well because the brakes don’t just rely on friction to burn off speed; they recapture energy, which serves to recharge the battery. I like the fact that they’re quiet and they’re lightning-fast in acceleration, far faster than comparable ICE cars. They can be great enthusiast cars for certain applications.
But they have some real problems. They make no sense in very cold or very hot climates, which makes batteries underperform, on top of additional drains from heating or air conditioning. Because chargers are few and can take a lot of time, EVs are only practical if you commute in a city and have a garage where you can plug it in overnight. Of course, lithium batteries catch fire occasionally, and when they do, they’re impossible to extinguish. That’s a real risk.
The bottom line is that they make little sense if you’re an apartment dweller without a garage, go on long trips, or live in an intemperate climate zone.
They have a definite value in the automotive ecosystem, but they’re being promoted as a panacea. They’re not. With present technology, hybrids using small but powerful internal combustion engines supplemented by batteries are probably the best way to go between the horns of the dilemma.
Who can accurately predict what will work or not? Politicians and bureaucrats, not engineers and designers, are making all the rules. But on the bright side, battery technology is always improving, so things will almost inevitably get better, despite the best efforts of Greens and bureaucrats.
SUBSIDIES
Could EVs compete in a free market without government subsidies, tax credits, or other special benefits? How long can governments continue to artificially prop up EVs?
We don’t really know the true economics of EVs because they’re buried under a ton of subsidies, tax credits, and other benefits, like free parking in some jurisdictions.
The answer is to get the government 100% out of cars. In fact, get the government 100% out of absolutely all areas of the economy so we can see what’s truly efficient and desirable. We’ll never know the answer until we live in a free market society.
How long can politicians and government bureaucrats artificially prop up EVs? Not long.
Here’s something that most people don’t consider. The real problem with EVs lies not so much with the cars themselves. It’s the national electric grid.
The amount of electrical power generation in the US and Europe has been flat for the last 20 years. We haven’t grown the amount of electrical power at all, even though the population has grown in that time. That’s because there have been great gains in efficiency and conservation. But the amount of gross power that will be needed if EVs continue to be promoted is going to be huge. Charging all these EVs could bring down the grid and cause blackouts.
If EVs are ever going to work, the only answer is to build lots of the latest-generation nuclear power plants. That’s a whole different subject, of course, but unless nuclear power has a renaissance, EVs will fail simply because there won’t be enough power on the grid for them. They’ll cause wholesale blackouts.
FINANCIAL AND ENVIRONMENTAL IMPLICATIONS
What are the implications for lithium, carbon credits, and other hyped-up investments that benefited from the EV craze? Once again, political intervention has caused people to do stupid things that they wouldn’t have done otherwise.
EVs are just the most egregious current example of state intervention causing huge misallocations of capital and generally reducing the world’s standard of living. Most government economic “planning” is about as smart as having half the people dig ditches during the day and the other half fill them at night in order to create 100% employment. Most of the current nonsense with lithium, carbon credits, wind, solar, and EVs amounts to the same thing.
As for the implications for lithium, the current generation of batteries requires a lot of lithium. But future generations of batteries may use different materials. Lithium went from about $8,000 a tonne in 2020 to $65,000 in 2023; now it’s dropped to about $12,000. That’s truly spectacular volatility. Most of the billions of dollars being put into lithium mining will probably turn out to be another giant misallocation.
Electric vehicles also release more toxic particles into the atmosphere and are worse for the environment than their gas-powered counterparts.
A study, published by emissions data firm Emission Analytics, found that brakes and tires on EVs release 1,850 times more particle pollution compared to modern tailpipes, which have “efficient” exhaust filters, bringing gas-powered vehicles’ emissions to new lows. As heavy cars drive on light-duty tires—most often made with synthetic rubber made from crude oil and other fillers and additives—they deteriorate and release harmful chemicals into the air. Because EVs are on average 30% heavier, brakes and tires on the battery-powered cars wear out faster than on standard cars.
Emission Analytics found that tire wear emissions on half a metric tonne of battery weight in an EV are more than 400 times as great as direct exhaust particulate emissions. For reference, half a metric tonne is equivalent to roughly 1,100 pounds and most EV batteries weigh around 1,800 pounds.
Another sought-after electric model, Ford’s F-150 Lightning pickup truck, also has an approximately 1,800-pound battery. The most popular EV in the US, Tesla’s Model Y, boasts a lithium-ion battery that weighs in at a hefty 1,836 pounds.
“Tires are made up of a lot of nasty chemicals,” said Emissions Analytics chief Nick Molden. To combat the release of toxins as they wear, Molden said that tires need to be made of more sustainable materials.
California lawmakers have similarly referred to EVs as producing “zero emissions” because they don’t have tailpipes, per the Journal, which added that the label is “deceptive.”
Electric cars still use tires made from petroleum that create particle pollution as they wear.
Still, “this will not be something that stops electrification,” Nick Molden, the founder and CEO of Emissions Analytics, told The Post.
Emissions Analytics found that brakes and tires on EVs release 1,850 times more particle pollution compared to modern tailpipes, which have “efficient” exhaust filters, bringing gas-powered vehicles’ emissions to new lows.
“You have a tradeoff. At the moment, the political agenda is very strong towards climate change reduction. EVs do deliver about a 50% reduction in CO2 — that [affects] climate change.”
“But you have this downside of EVs that increases particle pollution. Air pollution is about what we breathe and the health effects,” Molden said, assuring that the toxins in tires have much less impact on climate change than they do on “what we eat and are ingesting.”
Increased exposure to these toxins “can increase the risk of health problems like heart disease, asthma, and low birth weight,” according to the New York Department of Health, which noted that pollution from sources including vehicle exhaust can travel long distances from its source and still cause health issues at unhealthy levels.
“A lot of it [chemicals] goes into the soil and water, affecting animals and fish. And we then go and eat the animals and fish, so we are ingesting tire pollution,” Molden added.
Molden said that “the best first thing” to do to address this problem is to “change the recipe, minimize the number of toxic chemicals in the tires — then you got the best of both worlds.
In conclusion, the big takeaway on electronic vehicles is that innovations in technology are good, and that includes EVs. But once the State and the kind of people who work for it get involved, they’ll screw things up and create chaos.
My advice is to stick with ICE cars and stay away from EVs until the technology is sorted over the next few years.
