In a recent statement, economist Steve Moore, affiliated with the Trump administration, expressed skepticism about the future of electric vehicles (EVs) in the automotive market. Moore drew parallels to a historical misstep, the Ford “Edsel” model from the 1950s, which became notorious as one of the greatest flops in automotive history. He highlighted that like the ill-fated Edsel, the success of EVs hinges on whether consumers truly want them.
The Edsel was touted as the car everyone would want to buy, but its launch proved otherwise. Despite Ford producing 500,000 of these new sedan cars, consumers did not express a significant demand for them, leading to a monumental failure. Moore’s concern is that the EV market might suffer a similar fate, primarily because he believes car buyers are not enthusiastic about electric vehicles.
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This caution comes amid challenges faced by automakers, particularly Ford and General Motors, in their efforts to transition to electric vehicles. Ford reported a quarterly loss in its EV unit, further exacerbated by a cut in production of its Mustang Mach-E and a delay in planned investments in the EV segment. General Motors also witnessed a reduction in quarterly profit due to higher costs and the impact of selling more EVs, although it did not break down the losses from its EV unit as explicitly as Ford.
Moore referenced significant losses incurred by companies like Ford, stating that some are losing between $40,000 and $60,000 per electric vehicle. He contended that the enthusiasm surrounding EVs is proving to be a poor bet for these companies.
Furthermore, Moore suggested that the government may be compelled to consider industry-wide bailouts as automakers grapple with the financial burdens of their EV endeavors. He pointed out that the government is already offering incentives, such as a $7,500 subsidy for EV buyers and financial support for battery companies. Despite these incentives, Moore argued that Americans are still showing reluctance to embrace electric vehicles.
He shared observations from car dealerships around the country, noting that their lots are brimming with electric vehicles, yet only 10% of customers are opting to purchase them. Moore proposed that automakers should consider hybrid vehicles, which combine gasoline and electric power, as a more appealing option for consumers. However, he acknowledged that government mandates favoring EVs are pushing manufacturers in a different direction.
Source: Fox Business
