Incredible. Cheering for their own demise.
US automakers had a workable EV in the mid 90s. If they had kept that program perking they would own this sector hands down, and have a future.
Now they are looking at extinction.
A few months ago, Ford CEO Jim Farley slipped up and told the truth. The clip above pretty much gutted whatever respect I had for his integrity.
Yesterday, as the so-called president of the United States was bloviating about blowing defenseless people out of the water with millions of dollars worth of rockets, he was surrounded in the Offal Office by senior executives from the three legacy US automakers. They were in attendance to celebrate the repeal of the Biden-era corporate average fuel economy standards, a move that will give them license to sell more large SUVs and trucks.
The administration bragged that lowering those fuel economy standards would save US consumers $109 billion over the next five years and reduce the cost of new cars and trucks by an average of $925. As Bloomberg pointed out, however, those savings are largely illusory, as owners will pay more for gasoline than they would have otherwise. It says the net benefit will be more like $24 billion — or $181 per US household spread over 5 years.
The average cost of new cars has risen from less than $40,000 in 2020 to over $50,000 today. The administration would have you believe all of that increase can be attributed to the higher cost of making more fuel efficient vehicles, which omits entirely the tidal wave of economic disruption that swept the world as a result of the Covid 19 pandemic. It also ignores the higher costs for aluminum and steel so vital to the auto industry because of the cockamamie tariffs imposed by this current cabal of MAGA militants.
The implication is clear. The Big Three are going to go big on gas hogs. Bill McKibben, predictably, was appalled by the auto execs smiling while the fearless leader blasted immigrants as “garbage.” He claimed they have now signed their own death warrants, as Chinese automakers drive the clean transportation revolution forward. Soon America will be like Australia — a dumping ground for highly polluting vehicles that can’t be sold in any other nations where common sense and effective political leadership prevail.
McKibben says the support for EVs contained in the Inflation Reduction Act was the last real chance for the US auto industry to transition to non-polluting vehicles because it offered a way for the industry to make the transition by underwriting the retooling needed to make it happen. “But instead of fighting for that, these executives have truckled to the president, and sold the future of their companies for a few more years of turning out Escalades,” he said.
Bloomberg notes that EPA data shows GM, Ford, and Stellantis all trail far behind other automakers in their average fuel economy performance, with Stellantis being by far the worst. Its average fuel economy was actually a trifle worse in 2923 compared to 2020 at less than 22 mpg. Ford also went backwards. Kia showed the largest gain, going from about 28 to nearly 32 mpg.
Gas Guzzlers & Profits
The importance of gas guzzlers is illustrated by Ford. Bloomberg says more than half its US models average cost more than $50,000 and those vehicles account for 80% of its US revenue pool. Its F-Series pickup trucks alone account for almost half of its revenue and a large share of its profits. Everybody knows Ford, GM, and Stellantis are gouging their truck and SUV customers, but no one seems to care. Instead they are running around like their hair was on fire screaming about how expensive EVs are.
One easy way the administration could have helped avoid car price hikes is to drop their tariffs on steel and aluminum imports and other important components, or to stop fighting with Mexico and Canada, disrupting the deeply-integrated car manufacturing process that involves steps in all three countries.
To cut some expense the factories incur, NOT disrupting wind and solar deployments would be a way to add power to a grid disrupted by demand (and false demand prospects) by the tech bros Trump and his family (and Vance) are wrapped up with. Or maybe not doing as much as possible to get the gas producers to overbuild export capacity to gain higher prices for their commodity than what consumers here are used to paying.
Naah. Those choices benefit too many. Best instead to make the worst possible action – thus aiding the oil producers we import heavy crude from to produce our gasoline. Best to let the car companies happily guzzle their way into market oblivion – partying while they ignore the fact that “peak gasoline car” worldwide was in 2017.
They were caught flat-footed when the oil shocks in the 1970s made efficient Japanese and European imports much more attractive, yet their response was the Pinto, the Vega, and gaming the writing of the Gas Guzzler tax. That tax is still in effect, but they had it written to exclude pickups, vans, and the essentially non-existent-at-the-time thing called the SUV. And while they figure out how to NOT pass along any savings to the customers, eventually foreign EVs, small, good, efficient, inexpensive ones, will start trickling in until it’s a flood.
That’s the purpose of tariffs. To keep all them furinners out.
Stellantis just ripped off the Canadian government $200M by moving a lot of their production back to the US. We’re suing them. BYD and other Chinese EV makers are petitioning the Canadian government to reduce or eliminate the 100% tariff on their cars. I suspect this will lead to a “hey build your cars here and there won’t be any tariffs” offer. If that happens the big 3 can kiss goodbye to car sales in Canada – they’ll be stuck selling to the idiots who think they need a pickup truck (that’s rarely if ever used as one) or an SUV(and even there some of the asian car makers are making EV SUVs at a cheaper price point. May the big 3 go out of business – I only c are about their employees not the companies.