Biden’s Electric Car Flop: Billions Wasted, Sales Stall!

Auto dealers are encountering difficulties in the sale of electric vehicles (EVs) as manufacturers increase production in response to President Biden's initiative to eliminate the use of fossil fuels. By subsidizing EVs with billions of dollars, the government and utilities have transferred the expense to taxpayers. A recent study demonstrates that taxpayers bear an approximate liability of $50,000 per electric vehicle sold, amounting to $22 billion annually. Not even the recently extended $7,500 tax credit for specific EV purchases is factored into this calculation.

Although significant financial resources are being invested in the industry, electric vehicle (EV) sales have temporarily declined. Automobile dealerships are having difficulty selling their EV inventories. Sales have decreased since August due to consumer inclination towards gasoline-powered cars or hybrid vehicles, which are typically more affordable and do not entail the difficulties associated with recharging electric vehicles during extended journeys. EVs represented an all-time peak of 7.8% of automobile sales in August; however, this proportion declined to 7.2% in October.

The CEO of the National Automobile Dealers Association, Mike Stanton, explained that the organization's sales of electric vehicles (EVs) are challenged by customers who are progressively providing substitutes for working reasons. Subsidies and the regulatory regime that coercively accelerate the adoption of electric vehicles (EVs) without necessarily aligning with consumer demand or manufacturers' capabilities account for the backlog of unsold vehicles.

Automobile dealerships are resisting the pressure to sell more electric vehicles. For example, EV sales have slowed for Scott Kunes of Kunes Auto and RV Group, which distributes American-made automobiles in addition to Nissan and Mitsubishi. Despite substantial investments made by dealerships in equipment and training to facilitate electric vehicle (EV) maintenance, these assets remain dormant on their lots, failing to generate any profit. The failure of these investments—including the development of infrastructure to facilitate the sale of electric Hummers—to generate the anticipated returns has infuriated dealers.

However, as a result of the Biden administration's emission standards and restrictions on gasoline-powered vehicles in certain states, automakers are obligated to increase production of electric vehicles. The administration has allocated nearly $16 billion in funding and loans to facilitate this transition by retooling factories and bolstering EV production. Additionally, tax credits and subsidies can be utilized as motives for EV purchases. States are providing nearly $1,500 in additional tax credits and incentives per electric vehicle sold in the United States in 2021.

Notwithstanding the advocacy for electric vehicle (EV) adoption, there are those who contend that the financial burden is being inequitably transferred to taxpayers. The cost of constructing charging stations and electrifying energy-intensive electric vehicle battery facilities is being borne by ratepayers in the form of higher utility bills. The public should not be required to pay the full cost of electric vehicle (EV) infrastructure, according to critics, particularly considering that some individuals do not own cars.

Advocates of electric vehicle subsidies contend that the financial investment is warranted in light of the environmental advantages they generate and the imperative to address climate change. They contend that gasoline-powered vehicles are significant cost-inducers and polluters, as well as generators of climate-related natural disasters. With the intention of reducing greenhouse gas emissions in the United States by 50% by 2030, electric vehicles (EVs) are considered a viable technology to accomplish this objective.

However, environmental organizations have criticized the Biden administration for permitting automakers to overstate the fuel efficiency of electric vehicles (EVs) through the use of a formula that magnifies their performance. By allowing manufacturers to adhere to fuel efficiency regulations and circumvent penalties, this formula generates an extra subsidy for electric vehicles.

Automobile manufacturers are reducing production in response to the declining consumer demand for EVs; consequently, dealerships are left with a substantial stockpile of unsold EVs. The Biden administration is being urged by the National Automobile Dealers Association to reassess its emission standards and emphasize the criticality of incorporating hybrid vehicles and gasoline-powered automobiles with cleaner emissions into the vehicle portfolio. They contend that the intended environmental impact could be achieved without imposing any restrictions on consumers by affording them options and permitting a phased transition of the fleet.

Written by Staff Reports

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