Automotive
In a recent statement, economist Steve Moore, affiliated with the Trump administration, expressed skepticism in regards to the future of electrical vehicles (EVs) within the automotive market. Moore drew parallels to a historical misstep, the Ford “Edsel” model from the Nineteen Fifties, which became notorious as one among the best flops in automotive history. He highlighted that just like the ill-fated Edsel, the success of EVs hinges on whether consumers truly want them.
The Edsel was touted because the automobile everyone would wish to buy, but its launch proved otherwise. Despite Ford producing 500,000 of those latest sedan cars, consumers didn’t express a big demand for them, resulting in a monumental failure. Moore’s concern is that the EV market might suffer an analogous fate, primarily because he believes automobile buyers are usually not keen about electric vehicles.
This caution comes amid challenges faced by automakers, particularly Ford and General Motors, of their efforts to transition to electric vehicles. Ford reported a quarterly loss in its EV unit, further exacerbated by a cut in production of its Mustang Mach-E and a delay in planned investments within the EV segment. General Motors also witnessed a discount in quarterly profit as a consequence of higher costs and the impact of selling more EVs, even though it didn’t break down the losses from its EV unit as explicitly as Ford.
Moore referenced significant losses incurred by firms like Ford, stating that some are losing between $40,000 and $60,000 per electric vehicle. He contended that the passion surrounding EVs is proving to be a poor bet for these firms.
Moreover, Moore suggested that the federal government could also be compelled to think about industry-wide bailouts as automakers grapple with the financial burdens of their EV endeavors. He identified that the federal government is already offering incentives, corresponding to a $7,500 subsidy for EV buyers and financial support for battery firms. Despite these incentives, Moore argued that Americans are still showing reluctance to embrace electric vehicles.
He shared observations from automobile dealerships across the country, noting that their lots are brimming with electric vehicles, yet only 10% of shoppers are opting to buy them. Moore proposed that automakers should consider hybrid vehicles, which mix gasoline and electric power, as a more appealing option for consumers. Nevertheless, he acknowledged that government mandates favoring EVs are pushing manufacturers in a distinct direction.
Source: Fox Business
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This Article First Appeared At www.automotiveaddicts.com
