Ford Motor Company announced in January that it would cut production of its electric F-150 Lightning pickup truck in half, a sign that the company overestimated short-term demand for electric vehicles. The Biden administration can soak EVs in subsidies and tax breaks all it likes — but that isn’t enough to convince consumers to buy them.
Recent cold temperatures across the U.S. have heightened concerns about EV reliability. Dramatic scenes from Chicago depict EV owners lining up for hours to charge their cars, with some towed with dead batteries. EVs can lose up to 30% of their range in cold weather due to slowdowns in battery chemistry.
Recent polling found that 57% of Americans are “not at all likely” or “not too likely” to buy an EV for their next purchase, and three-quarters of respondents were worried about the availability of charging stations and driving range.
Stellantis Chief Executive Carlos Tavares put the problem aptly: “The feedback from the consumer is loud and clear: ‘As soon as you do not fix the affordability issue by giving me a significant subsidy…then I stop buying.’”
But EVs would be about $50,000 more expensive than they already are if not for subsidies, regulations, and hidden costs. The Inflation Reduction Act already includes a $7,500 direct subsidy for EV models with domestically built and sourced batteries. How much government largess will be enough to fix “the affordability issue?”
There is currently a perverse incentive for automakers to continue to produce EVs, even when market demand is low, but a rule proposed by the Energy Department could remedy it. The fuel economy of EVs is greatly exaggerated when calculating minimum fuel economy across an automaker’s entire fleet of new vehicles sold in the U.S.
When tighter fuel efficiency standards are imposed, manufacturers comply by producing more EVs, rather than incrementally enhancing fuel economy across all of their models. Under current standards, a Ford F-150 Lightning is worth a staggering 238 miles per gallon, but would only be worth 67 mpg under the proposed rule (twice the fuel efficiency rating of the internal combustion Ford F-150).
While it would be worthwhile to stop pretending that EVs are seven times more efficient than internal combustion models, the real reason for the rule is to force automakers to manufacture even more EVs to comply with tightening emissions standards. Last month, the Environmental Protection Agency forwarded to the White House a rule that will require average fuel efficiency to rise to about 57 miles per gallon. That will require automakers to produce a 67% EV fleet by 2032 — and that’s before the administration yanks away the EV efficiency loophole. Does President Biden’s left hand know what his right hand is doing?
Consumers are free to purchase EVs if they judge one best for their needs. There’s certainly a glut of EVs languishing in dealerships to choose from. But mandates and subsidies designed to force consumers into buying EVs will not change their ultimate preference for safe, reliable transport that won’t leave them stranded.