The market speaks – against electric vehicles
Ford lost $3.7 billion on its EV sales
Here’s a recent blog post that my colleague, Josh Antonini, wrote for publication to the Mackinac Center blog (originally published there on November 20, 2024). Josh’s piece explains how customers are rejecting EVs in favor of more reliable and/or better suited transportation options, despite the presence of government mandates and subsidies. Josh explains how automobile manufacturers are focusing on those subsidies and (at least one of them is) claiming that they are building EVs because they want to “be on the right side of history.”
They are choosing this confused view of morality over the clear market signals being sent by their customers. On the issue of businesses choosing to impose their political views on their customers, I have repeatedly returned to a quote that I wrote in a 2018 editorial I wrote for The HIll. I’ll do it again here.
When compared with the comments from Bill Ford, CEO of Ford, Marchionne comes across as more grounded and reasonable. Ford was quoted at the auto show, “We’re going to electrify even our most iconic vehicles.” He added, “The only question is, will the customer be there with us?”
Ford’s statement stands in marked contrast to his great-grandfather’s beliefs. As Henry Ford described in the commemorative edition of his 1926 book, “Today and Tomorrow”:
“The point to be remembered about the establishment of industry is that, while all these various new ideas were being developed, the people who paid for them were the people who bought. No tractor, no thresher, no motor car, no locomotive, no new industrial device has ever been developed unless the people paid the expense.
Business grows big by public demand. But it never gets bigger than the demand. I cannot control or force the demand. There is no super-control save that of the people reacting to the service they get.”
Business can’t pretend that imposing woke, green ideology on unwilling customers will be a successful, long-term business strategy. Josh’s piece demonstrates how big auto manufacturers are learning just how true that is.
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The market speaks – against electric vehicles
Ford lost $3.7 billion on its EV sales
The entirety of Ford’s normal vehicle profits was undone by its losses on electric vehicles.
Ford’s 2024 Q3 Earnings Presentation delivers the details: The year-to-date losses on Ford’s EV business (what the company calls “Ford Model e”) totaled $3.7 billion. Profits from Ford’s “Model Blue” division, which sells traditional internal combustion vehicles, also happened to be $3.7 billion.
This past quarter, Ford reported losses of $1.2 billion on its EV business. Energy reporter Robert Bryce calculated that Ford likely lost almost $60,000 for every electric vehicle it sold this past quarter. “Ford has been hemorrhaging cash on EVs for the past two years,” Bryce wrote. “It lost $4.7 billion on EVs in 2023 and $2.2 billion on EVs in 2022.”
General Motors is having problems as well. The company missed its EV production goals by half last year due to issues with the battery technology.
Stellantis CEO Carlos Tavares won’t be deterred by the massive losses.
The company’s dealers recently told the Detroit News that monthly sales have in some cases turned down by 50% or morecompared to previous years. The Stellantis dealer council has complained to Tavares twice this year about these problems, but the objections apparently fell on deaf ears. A true climate ideologue, Tavares is not deterred by his company’s colossal failures. “We want to be on the right side of history,” Tavares said at the Paris Motor Show last month.
Of course, he also admits his company needs to lobby for government subsidies “so that they don’t have to push the EVs in the mouth of consumers that may not be so excited about it.”
“Not so excited about it” is an understatement. A Gallup pollfrom March found that 48% of respondents would not consider buying an electric vehicle– a number up 7% from the year prior. while a McKinsey reported in June that 46% of Americans who owned electric vehicles were very likely to buy a gas-powered vehicle next time.
What is actually happening seems plain. We don’t want to spend our money on electric vehicles, so the Biden-Harris and Whitmer administrations take our money and give it to motor companies to build them anyway. This is done in the name of saving the planet, when the actual climate impacts of these policies are too small to measure.
This is not to say that electric vehicles are bad. They’re interesting pieces of technology which will certainly garner interest and demand into the future. Current electric vehicles are luxury items, gimmicks that owners appreciate as fun (albeit expensive) toys. As the market works to lower their prices and as charging infrastructure grows, electric vehicles may find more of a place in the market. But an “EV transition,” in which electric vehicles make up 100% of the market (as ruled by bureaucrats in California) or even 50% (the Biden-Harris administration’s goal) by 2035 – a little over a decade– is delusional. Taxpayers should not cover the cost of luxury vehicles.
In the overwhelming majority (89%) of households with electric vehicles, the EV is not the only vehicle. In fact, 81% of these households have a second, gas-powered car.
It is morally wrong to take the earnings of working families and give it to motor companies so that someone else can get a better deal on a second car. It doesn’t become right just because progressives do it in the name of climate change.
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.
In my view a lot of current owners value their EVs as virtue-signalling.
Good observation. EV sales are not catching on very well, even with taxpayer money for subsidies going to both the manufacturers and the consumers. And as you point out, most of the consumers of EVs are wealthy enough to afford them along with a gas-fired backup vehicle. No wonder the gap between the rich and the lower classes gets bigger.