In essence, they’re suggesting that the damage is done, the investments are made, so they need to somehow generate a return on those investments before Trump pulls the plug on the mandates.

A report by Brady Knox over at Washington Examiner, commenting on a NY Times article, suggests car companies may ask President Trump to keep Joe Biden’s rules in place for now:

According to a report from the New York Times, the Biden administration’s actions to boost domestic EV manufacturing may have already set the auto industry past the point of no return. Following Biden’s initiatives, automakers have already invested billions of dollars in transitioning to electric vehicles. If Trump were to scrap the initiative, major automakers fear they could be undercut by smaller manufacturers producing cheaper, internal combustion engine cars.

Three of the country’s largest automakers, Ford, General Motors, and Stellantis, are already lobbying Trump against scrapping the rules.

Some had hoped that one of the biggest proponents of electric cars, Tesla CEO Elon Musk, would be able to sway Trump to keep those rules in place, but now, his priorities seem to be cutting regulations. He expressed opposition to the $7,500 tax credit for buyers of electric cars, saying he opposes all subsidies.

“In my view, we should end all government subsidies, including those for E.V.’s, oil and gas,” Musk said last week.

Musk’s calculation was more cynical in a July earnings call, speculating that the end of the subsidy would hurt Tesla somewhat, but hurt its competitors much more.

Is it worth keeping the mandates so the big three U.S. automakers can prevent smaller competitors from eating their lunch?

Nope, Not Worth It

As horrible as the situation is for major U.S. automakers, keeping the mandates in place would be far worse. Americans need relief far more than automakers right now. Getting the price of vehicles down to a manageable level is crucial if America is going to have any chance of recovering from the financial decimation we’ve felt for the last four years.

But there’s actually a good business reason for pulling the mandates immediately. The Biden-Harris regime forced automakers to try to usher in a future that was too far off, but that doesn’t mean OPTIONAL electric vehicle adoption isn’t part of the future.

The damage has been done by the mandates, but there have also been significant investments into research and development that can flourish if they’re allowed to transition without government interference. In other words, they can return to internal combustion engines as the primary driver for now to get their revenues back while reducing costs for American consumers. Simultaneously, they’ll be expanding on what they’ve built in EV infrastructure, albeit without mandates forcing the issue. They’ll be able to work at the speed of the market instead of the mandates.

It’s a sour consolation for the biggest automakers because it means they’ll have to wait years or even decades to realize benefits from their electric vehicle investments, but the long-term returns should be worth the wait… if they can survive long enough to see them.

Rather than using the current rules to stifle competition, they should hope that President Trump immediately sides with the free market and the consumers to allow enough short-term benefit for U.S. automakers to recover.

“We’re seeing a tremendous amount of competition,” John Lawler, Ford vice chair and CFO, told journalists in a conference call. “In fact, S&P Global … said that there’s about 143 EVs in the pipeline right now for North America — and most of those are two-row and three-row SUVs.”

The news that Ford was scrapping its SUV EV came just a month after the company announced a manufacturing pivot at its plant in Oakville, Ontario. The plant, which had been earmarked for EV production, was shifting production to Ford’s F-series pickups, its flagship gas-powered trucks.

“The move,” the New York Times reported, “is the latest example of how automakers are pulling back on aggressive investment plans in response to the slowing growth of electric vehicle sales.”

The Cost Problem

Ford’s latest pullback from EVs is no surprise to people who’ve been paying attention to the EV market.

More than a year ago I pointed out that news outlets were reporting of EVs “piling up” at dealership lots because of low consumer demand, which ultimately prompted Ford to halve production of its popular F-150 Lightning, reducing output to about 1,600 vehicles per week.

The reality is both lawmakers and Washington and auto companies severely misjudged consumer demand for EVs, which has proven far lower than estimates had projected. There are many reasons for the low demand, but the primary reasons are concerns consumers have with EVs.

Price is one factor. Research in recent years has indicated that despite government subsidies, EVs typically cost on average between $5,000 and $10,000 more than a similar gas-powered vehicle. That EVs are more expensive than gas-powered cars may surprise few readers, but what’s less known is that the price gap is widening.

“EV prices aren’t just going up; they are rising faster than inflation…faster than [internal combustion engine] vehicle prices” Ashley Nunes, a senior research associate at Harvard Law School, testified before Congress in 2023, noting that the inflation-adjusted average price of a new EV had risen to over $66,000 in 2022, compared to $44,000 in 2011.

The Charging Problem

Cost, however, isn’t the only concern of consumers.

An overwhelming percentage of Americans—77 percent, according to a 2023 survey led by the Associated Press-NORC Center for Public Affairs Research and the Energy Policy Institute at the University of Chicago—have concerns about how they would charge an EV if they bought one.

These concerns are not baseless. In February, the New York Times profiled a man Michael Puglia who had recently bought a Ford F-150 Lightning and said it was the “coolest” vehicle he’d ever owned.

“It’s unbelievably fast and responsive,” the Ann Arbor, Mich., anesthesiologist told reporter Neal E. Boudette. “The technology is amazing.”

The problem was the vehicle’s range. When the weather grew colder, Puglia found that the distance his vehicle could travel fell dramatically. His faith in the $79,000 truck dampened, and he found himself wondering if he should sell it.

“People say ‘range anxiety’ — it’s like it’s the driver’s fault,” Puglia told the Times. “But it’s not our fault. It’s actually they’re not telling us what the real range is. The truck says it’s 300 miles. I don’t think I’ve ever gotten that.”

The range problem of electric vehicles is exacerbated by another challenge facing EVs: a lack of charging stations. Nationwide, there was 68,475 private and public charging stations at the beginning of the year, according to the Department of Energy. That’s more than twice the number in 2020, but it’s still just a third of the number of gas stations and far below projections.

The range problem of electric vehicles is exacerbated by another challenge facing EVs: a lack of charging stations. Nationwide, there was 68,475 private and public charging stations at the beginning of the year, according to the Department of Energy. That’s more than twice the number in 2020, but it’s still just a third of the number of gas stations and far below projections.

One reason charging infrastructure has lagged is due to the federal government’s incompetence. Nearly three years ago, the U.S. Departments of Transportation and Energy announced a $5 billion spending effort to build fleets of charging stations to lead “an electric vehicle revolution.” As of the summer of 2024, just seven charging stations had been built.

“That is pathetic,” said US Sen. Jeff Merkley, a Democrat from Oregon. “We’re now three years into this … That is a vast administrative failure.”

Of Profits, and Losses

The decision of automakers to bet big on EV adoption was in some ways rational, in that they were responding to powers in Washington that were pressuring them and incentivizing them to expand electrical vehicle production. But the costs of listening to industry experts and politicians in Washington instead of consumers — and profits — have been severe.

In August 2023, NPR reported that Ford CEO Jim Farley was charging ahead with its ambitious EV expansion even though the company was “losing money on each EV it sells” and consumer demand for EVs was plummeting. Farley’s reasoning was that Ford was attracting new customers, but it was a costly endeavor. Ford reported a loss of $4.7 billion on EV sales in 2023, roughly $40,525 per vehicle sold.

“If the great mass of consumers dislike purple cars with green polka dots, then a society based on private property will not waste resources in the production of such odd cars,” wrote economist Robert Murphy. “Any eccentric producer who flouted the wishes of his customers and churned out vehicles to suit his idiosyncratic tastes, would soon go out of business.”

Murphy wrote these words more than twenty years ago, but in a sense they describe Ford’s business strategy. By producing mass amounts of pricey EVs that consumers didn’t want and selling them at a loss, Ford was in a sense cranking out green polka dotted cars. It was a losing strategy and path to going out of business.

Ford’s massive pullback from EVs is part of a broader return to economic reality. Companies flourish in a free market economy not by serving bureaucrats but consumers, the true “bosses.”

“They, by their buying and by their abstention from buying, decide who should own the capital and run the plants,” Mises wrote. “They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser.”

Automakers bear responsibility for their decision, and paid the price in the form of losses. But this misallocation of resources likely could have been avoided if not for the federal government’s hamfisted attempts to coerce Americans into EVs, which included not just taxpayer-funded subsidies, but overt pressure from Washington and federal regulations designed to phase-out gas-powered cars.

Fortunately, the centrally planned EV revolution now appears dead in the water, or at least in full retreat. A spokesman for Kamala Harris recently told Axios the presidential candidate “does not support an electric vehicle mandate.”

Forcing Americans into EVs was always a bad idea economically, but it now appears to be a bad idea politically, too.

That’s good news for Ford and American consumers.