For a century carmakers built the cars and trucks their customers wanted. That’s changing. Increasingly they’re building cars and trucks the government wants their customers to have — and that means electric vehicles (EVs).
CNN reports that China, France, Great Britain, India, Norway and Germany are considering banning the future production and sale of gasoline and diesel-powered engines.
Norway wants all its cars to be zero emissions by 2025. India wants all car and truck sales to be electric vehicles by 2030. France hopes to achieve that goal by 2040 and Great Britain by 2050.
Those are ambitious goals, considering only 750,000 electric vehicles were sold worldwide in 2016.
Eight other countries — Japan, Korea, Austria, Denmark, the Netherlands, Portugal, Ireland and Spain — are only setting EV sales goals. In addition, 10 states want an EV sales target by 2025.
President Barack Obama also tried to push more electric vehicle sales. How’s that working out?
Automakers sold 1.93 million vehicles in the U.S. during October — one-third of them were cars and two-thirds trucks and SUVs.
Of that number, Chevrolet sold 2,710 of its all-electric Bolt. Nissan sold a whopping 213 of its all-electric Leaf. And Tesla sold an estimated 1,120 of its Model S, according to the website Inside EVs.
Normally, a manufacturer would eliminate such a poor-selling product. What gives?
Government mandates and taxpayer dollars, that’s what.
While Washington hasn’t banned gas and diesel-powered cars and trucks — yet — it is forcing manufacturers to make EVs and subsidizing consumers who buy them.
The corporate average fuel economy standard, or CAFE, is a 1975 law that requires each automaker’s lineup of cars, light trucks and SUVs to meet a government-designated fuel economy goal.
The Obama administration raised the standard to 54.5 miles per gallon by 2025.
The problem automakers face is that consumers want SUVs and trucks — especially when gasoline prices are low — which fall short of the CAFE standards.
So they make money-losing electric cars to lower their overall average mileage, which allows them to sell less fuel-efficient but moneymaking SUVs and trucks that consumers want.
In addition, taxpayers subsidize the purchase of electric vehicles and hybrids — up to $7,500 per vehicle. For example, the Bolt’s webpage sets the car’s starting price at $37,495, adding that it is “$29,995 after federal tax credit.” The Bolt featured on the web page is $42,760.
That’s a lot of money for a middle class family making the median household income of $59,000.
Then there’s Tesla, a beautiful EV that many people would love to own, but the Model S begins at about $70,000. Most middle class taxpayers can’t pay that — but their taxes will pay a portion of the $7,500 credit that subsidizes wealthy people who can afford them.
Defenders fear if the tax credit were phased out, EV sales would plummet. When Hong Kong ended its $12,500 tax credit for Teslas, sales tanked. Apparently, Hong Kong residents only wanted it if the government helped pay for it.
There is nothing wrong with automakers churning out EVs if that’s what their customers want. And the day may come when improved technology, longer driving ranges and lower costs create a real demand for electric vehicles. But for now the large majority of Americans want trucks and SUVs.
The car or truck of your dreams may not be the car or truck of the government’s dreams. Remember, these are the same folks who designed Obamacare insurance the way they wanted it, required everyone to have it, and assured us it would be the best health insurance ever.
Don’t let Washington do to our cars and trucks what they did to our health insurance!
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in the greater metropolitan Dallas area.