Electric vehicles have not been the environmental savior they were portrayed as. Of course, it appears most people realized that the mining of rare earth minerals, as well as the manufacturing process for the vehicles, negate any environmental benefits. When you factor in the necessity to charge cars with electricity that is most likely being generated by a fossil fuel energy plant, EVs aren’t the environmental panacea that world governments would have us believe they are. The subsequent slowdown in the growth of the industry is hitting dealers and manufacturers hard.
Many dealers report that they have unsold inventory piling up as new EVs are rolling in, and customers aren’t interested in the pricey electric boondoggles. The lack of customer interest has led to lost jobs at some manufacturers as car companies slash production and shutter entire lines devoted to electric vehicles. Even further upstream, mines are shutting down, and construction in America has also halted on a $1.3 billion dollar plant in North Carolina. As market share continues to suffer, businesses worldwide are being affected.
EV market share rose much less than expected last year, unable to keep pace with the U.S vehicle inventory. While inventory more than doubled, the actual market share rose less than a half percent. Subsequently, there are more cars for fewer buyers, and many mines that produce some of the precious minerals have closed.
As mines worldwide have upped production to meet projected demand, with the disappointing sales of EVs, rare minerals aren’t so rare as the saturated market isn’t supporting the current pace of mining. This has caused some mines to shutter and many others to dramatically slash production. The overproduction has also driven down the price of some of the metals.
For example, lithium is down 90% since the beginning of last year, and nickel has been cut in half as well. One mine on the island of New Caledonia recently suspended operations despite providing over 6% of the world’s nickel supply. Australia has been particularly hard hit by the poor sales of EVs.
The Australian government recently declared nickel as a critical mineral in order to give mining companies government grants so they can stay in business as demand flags. The country has lost one-fifth of its mine supply due to the poor demand for electric vehicles.
In an attempt to lure American consumers, the Biden Administration dangled fat subsidies for consumers to purchase EVs. Unfortunately, these subsidies come with strings attached in regard to the foreign content of the rare heart minerals and battery production. Since an estimated 87% of the world’s rare earth minerals are controlled by China, most vehicles haven’t qualified for any financial incentives under Biden’s rules.
Consumers worldwide have failed to get a charge out of electric vehicles. The segment is fraught with so many hurdles that most consumers have simply taken a hard pass on the pricey cars and trucks. Perhaps the segment may survive someday as an alternative to fossil fuels, but the prospects of replacing gasoline-powered cars anytime soon aren’t looking good.
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