In the wake of significant investments in green energy and electric vehicles (EVs) to align with President Joe Biden’s policies, American automakers find themselves grappling with slower-than-expected sales of EVs.
Electric Vehicle Sales Struggle
Despite the Biden administration’s push for greater EV production, data from Edmunds.com reveals an alarming trend where EVs are lingering on dealership lots.
Automakers like Tesla, General Motors (GM), Mercedes-Benz, and Ford are being forced to reevaluate and slow down their EV production efforts.
Waiting for Buyers
Edmunds.com data shows that in September 2022, EVs spent a mere 21 days on dealership lots before being sold.
However, this figure has significantly increased, with EVs now averaging 65 days at dealerships.
Automakers’ Dilemma
Major automakers are well aware of this issue and are adjusting their strategies accordingly.
Ford Stops Battery Plant Construction
Notably, Ford announced that it would temporarily halt the construction of a $3.5 billion EV battery plant in Marshall, Michigan, after facing criticism for collaborating with China’s Contemporary Amperex Technology Co. (CATL), which has strong ties to the Chinese Communist Party (CCP).
GM’s Change in Plans
General Motors (GM) has similarly shifted gears, with CEO Mary Barra informing investors that the company is abandoning its goal of producing 400,000 EVs between 2022 and mid-2024.
Additionally, GM will postpone retooling its Orion Township, Michigan plant for building EV pickup trucks.
Tesla’s Earnings Dip
Even Tesla, a trailblazer in the EV industry, saw a dip in net income, reporting $1.85 billion in the third quarter compared to $3.29 billion during the same period in the previous year.
Consequently, Tesla is postponing the launch of its production plant in Mexico.
‘Pretty Brutal Space’
The EV market is so challenging that Mercedes-Benz is resorting to offering significant discounts to move its EVs off dealership lots.
The automaker is candid about the current state of the EV market, with CFO Harald Wilhelm describing it as a “pretty brutal space.”
Mercedes-Benz Discounts
Many other EV models are being sold below the sticker price, with some manufacturers providing incentives of nearly 10%.
Affordability Concerns
Despite substantial taxpayer-funded subsidies aimed at promoting EVs, these vehicles remain expensive for the average American worker and middle-class families who rely heavily on their vehicles.
In October, the average cost of an EV was nearly $60,000 before considering Biden’s tax credits, which is over $10,000 more than the industry average.
Charging Challenges
Beyond the high cost, the EV market has faced challenges regarding long charging times, a lack of charging infrastructure across the United States, and the practicality of EVs, particularly for individuals who travel long distances.
Notable Public Incidents
Public opinion on EVs has been marred by various incidents, including a high-profile case involving Jennifer Granholm, Biden’s Energy Secretary, who embarked on an EV tour that ended in chaos when police were called to resolve a dispute over charging station availability.
Safety Concerns
There are also concerns about EV safety.
In Colorado, local firefighters have admitted their lack of preparedness for tackling fires involving EVs, which utilize lithium-ion batteries and require substantial amounts of water to extinguish.
Job Losses
Many American auto workers are alarmed by the rapid transition to EVs, which generally require less labor and rely heavily on components from China for manufacturing EV batteries.
As a result, auto workers fear significant job losses as traditional auto parts become obsolete due to EV technology.
Impact on Auto Workers
Auto workers anticipate a decline in demand for traditional auto parts like spark plugs and oil filters due to the emergence of EVs.
Without these components, auto workers worry they will have fewer job opportunities.
Inevitable Job Losses
Some auto workers believe that their jobs will inevitably be eliminated if the Biden administration continues to prioritize the production of EVs.
The shift towards electric vehicles is a significant concern for workers in the auto industry.
Biden’s Promotion Isn’t Working
Despite the Biden administration’s efforts to promote EVs, American automakers face challenges related to extended EV inventory holding times, higher vehicle prices, charging infrastructure issues, and public safety concerns.
These challenges also have economic implications, with auto workers fearing job losses and the economic shift towards EVs having broader repercussions.
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