Editors at National Review Online assess a predicament for a major America auto maker.
Ford Motor Company has been on the front line of America’s supposed electric vehicle revolution for the past five years. Now, it has discovered that the EV market it was chasing never actually existed.
On Monday, Ford announced that it was writing down $19.5 billion in charges, with most of the losses stemming from its flailing EV business. The company now plans to change strategy, redirecting capital from the EV money pit toward models that are more likely to turn a profit, including, notably, hybrid gas-and-electric vehicles. Expect other legacy automakers that drank the EV Kool-Aid (with varying degrees of enthusiasm) to make similar announcements in the coming months.
Ford CEO Jim Farley summed up his reasoning: “Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting.” The company’s electric version of its F-150 pickup truck, the Lightning, will be scrapped. An EV battery factory in Kentucky will be transformed into a battery storage business for industrial clients.
Green energy enthusiasts will surely blame Ford’s staggering losses on President Trump, who signed legislation repealing EV tax credits and rescinded fuel-efficiency mandates this year. The truth, however, is that a mass-market EV industry was destined to struggle long before Trump won his second term. It was conjured by central planners in Washington, not consumer demand, and needed to be propped up by cash and coercion to survive. No more than a sliver of the U.S. car-buying market ever desired to purchase an EV, and no traditional automaker could conquer the market niche that Tesla already carved out.
Policymakers began their campaign against gas-powered cars over a decade ago. In the late 2000s, Congress attempted to midwife the EV industry by creating a $7,500 tax credit per vehicle sold, which would phase out after a manufacturer reached 200,000 electric cars.
