Desubsidize Electric Cars

The strangest argument has been put forward in defense of Senate Republicans – who might as well be Senate Democrats – not rescinding the titanic federal subsidization of electric vehicles – i.e., the $7,500 an individual can deduct from his taxes (to be made up for by someone else’s taxes) as a reward/inducement for buying an EV.

The argument is that the car industry must not be rattled by “regulatory uncertainty.” It is used to the subsidization of electric cars; therefore, ending the subsidies would be as wrong as – well, let’s see – dialing back the ethanol mandate or making a bother about stoners buying sushi with their EBT cards.

They are after all, used to it, too.

The ethanol make-workers might have to find productive work. Stoner sushi-eaters might have to just work.

It’s horrible. Someone might be Triggered.

From an editorial in Automotive News:

“… given the precarious state of the EV market, it could have been a big setback for the industry had earlier proposals to wipe out the EV tax credit made it into law.”

Well, first, there is no market for EVs. If there were a market – that is, demand – massive subsidies wouldn’t be necessary to jump-start supply.

EVs are being propped up by subsidies; without the subsidies, there would be very few EVs at all. They cost too much, rendering them uneconomical. They take comparatively forever to recharge, which makes them inconvenient. Hence, most people – most people- are not interested in them – especially without generous taxpayer-financed assistance.

How would be it be a “setback” for the industry to stop having to build cars it can’t sell unless they are propped up by subsidies? Isn’t that – pouring money into a product for which there is no natural market – the most precarious thing imaginable?

“The ultimate resolution should take into account the billions of dollars in auto industry investment that is at stake…”

In other words, continue to throw good money after bad – because hey, we’ve already wasted “x” amount of money. Therefore, waste more. The Defense Department works on exactly this reasoning.

EVs are a neon-backlit, textbook example of a malinvestment, if “investment” means putting dollars toward something that will return a profit. Whether one likes electric cars – or pyramids or $35 million-a-copy fighter aircraft – is an irrelevant consideration, insofar as economic considerations – which are the only considerations when it comes to an honest market driven by real supply and actual demand.

Otherwise, it’s just pyramid building. Cheops, phone home.

If the industry thought EVs could make them money, then EVs would be be made, abundantly. The idea that the industry wouldn’t invest in something profitable absent coercion and subsidization is right up there with the belief that you can leave your wallet on the seat of a New York City park bench and expect to find it (and your money) still sitting there the next day.

So why doesn’t the industry want to invest in EVs? That is, absent the subsidies and mandates? It’s the Question Which Must Never be Asked – right behind raising your hand about diversity being our strength.


“EVs represent a multibillion-dollar wager placed by auto executives into a technology that promises – eventually – to reduce harmful greenhouse gas emissions,” saith the writer for Automotive News.

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