Recently, economist Steven Moore warned investors that the EV market could be the “next big flop” after assessing the state of the industry. Drawing on Ford as a prime example, Moore explained how car companies could suffer financial consequences from over-investing in their EV lineups.
Moore recalled a historical example of Ford Motor Company over-producing a vehicle consumers ultimately had no appetite for. The economist drew a parallel to the modern-day EV market.
“Henry Ford’s son was named Edsel, and this was going to be the great car, all of the executives said, ‘This is the car everybody’s going to want to buy.’ Ford made 500,000 of these new sedan cars, but guess what?” Moore said on Fox News’ “Varney & Co.” “Nobody bothered to ask consumers whether they wanted the car.”
Electric vehicles have become the talk of the auto industry, where, over the past couple of years, car manufacturers have been adamantly developing their battery-powered offerings as not to miss an entry into this new market. However, Moore predicts this could be a “flop” that rivals the Edsel.
“And of course, the Edsel was one of the great flops of all time,” Moore said. “I’m here to tell you, if these trends continue, we’re going to see the EV market become the next big flop because car buyers don’t want them.”
The economist pointed out unsustainable losses on these new vehicles, noting that these companies cannot continue at their current pace. “Given the huge losses that these companies like Ford are suffering because of the EV mania, I saw a statistic this morning that Ford is losing something like between $40,000 and $60,000 per car,” Moore stated. “It’s been a bad bet.”
Despite various government subsidies to purchase EVs, consumers are deciding otherwise, opting to stick with hybrids or traditional gas-powered vehicles despite the taxpayer-funded incentives.
“The federal government is also already offering all of these sweeteners to get people to buy electric vehicles. You get a $7,500, basically, check from the government every time you buy an EV. Let’s not forget that we’re subsidizing the battery companies, all of these things,” Moore noted. “The taxpayers are paying for these things. And yet the most amazing thing is, even with all these sweeteners, Americans are still saying, I don’t want them.”
Moore advised that the sound financial decision would be for auto manufacturers to shift their focus toward producing hybrid cars dually powered by gas and battery. However, the economist notes that the government is going beyond free market mechanisms to push an EV agenda.
“I think the car companies would be smart going to hybrids where you can have gas and an electric battery,” Moore explained. “But the car companies aren’t making those cars. And the reason they aren’t making them is because the government has increasingly mandate[d] that all cars be EVs.”
According to a statement from the Department of Transportation, “The Federal Government has set a goal to make half of all new vehicles sold in the U.S. in 2030 zero-emissions vehicles, and to build a convenient and equitable network of 500,000 chargers to help make EVs accessible to all Americans for both local and long-distance trips.”
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