Here’s a depressing but all too predictable headline from The Wall Street Journal last week: “Detroit’s EV Pullback Is Costing $50 Billion.”
Yikes. That’s a lot of money for the American auto industry to lose. Once again, we have confirmation of an iron law of economics: If you want to kill an industry, subsidize it.
The best recent example of this rule is the green energy industry (solar and wind power), which has been heavily boosted with taxpayer dollars for almost 50 years now and is still an inconsequential form of overall energy supply. Dozens of promising firms like Solyndra collected billions of taxpayer dollars and were supposed to be the energy companies of the future. Now they lie in rest in the business-bust cemetery.
But perhaps an even bigger waste of money has been the tens of billions of taxpayer dollars that former Presidents Barack Obama and Joe Biden threw at the electric vehicle industry.
I have nothing against EVs. I own a hybrid, which our family likes a lot. Teslas are great cars.
But the Biden administration was so obsessed with ending fossil fuel consumption overnight, they didn’t even support hybrids. With the Biden team and the climate-change fanatics, it was total and immediate transition to electric cars. Or bust.
Well, it’s been mostly bust. My group Unleash Prosperity warned repeatedly during the Biden years that the auto industry was sowing the seeds of its own destruction by getting hooked on the fool’s profits of taxpayer handouts for EVs. These included a $7,500 tax credit to entice people to buy an EV, billions of dollars of manufacturing subsidies, free charging stations, choice parking spaces and other special treatments.
The big three auto firms got suckered into just what we counseled against: building cars for the politicians, not the car buyers. The problem has been that the know-it-alls in Washington ignored one key feature of the car-buying public: We Americans have a love affair with our cars. We were never going to allow the politicians to tell us what kind of car to buy and drive.
EVs also became knotted up in partisan politics. They became known as “Biden cars.” In this polarized nation, half of Americans hated Biden and his policies. Republican voters weren’t going to obey his car-buying commandment.
EV sales were also stalled by countless horror stories of drivers being stranded in the mountains with no juice left in the battery, or cars not starting on frigid winter mornings. This made car buyers wary. Also, there have been legitimate concerns about putting the entire transportation system on the strained electric grid system.
So despite all the federal and state handouts to the industry, EV sales fell by half in 2025 once the tax credit expired last year. Sales have fallen to their lowest level in four years. Over the past six months, Ford, General Motors and Stellantis all lost money thanks to overinvestment in EVs. The unsold cars are now piling up on the dealer lots. (Now might not be a bad time to buy an EV. The deals are out there.)
Elon Musk may well be right that electric cars will be the vehicles of choice in the future as battery technology continues to improve. Their costs will fall, the batteries will allow motorists to drive farther without recharging, and the reliability will undoubtedly rise.
But for that future to unfold, keep the government as far away from the auto industry as possible. To slightly alter a phrase from Justice John Marshall, the power to tax and the power to subsidize is the power to destroy.
Stephen Moore is a former Trump senior economic adviser and the cofounder of Unleash Prosperity, which advocates for education freedom for all children.
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Even with subsidies electric cars have so many issues. Limited range, charging stations or lack of and the wait time. Maintenance is still in the honeymoon phase as nothing costs more than batteries, disposal and accidents. They’re almost always totalled because of the way they’re constructed. Let’s not get started about fires if you are one of the unfortunate victims. And speaking of victims, fleeing a disaster in an electric car when there’s no electricity doesn’t make it a very good getaway vehicle. Better have a backup plan. Politicians and bureaucrats probably don’t have those issues, they just cause you to have them.
Put all cars on the under-powed and very unreliable electrical grid and watch the United States turn into one giant parking lot.
NO these killed the EVs:
Lack commercial chargers
Range
Insurance
Maint fees
replace battery
None to Rent
No Road side service
Insurance fees not= to ICE cars
Anything our Government controls or touches goes bankrupt .
Most American consumers are much smarter than Corrupt politicians that think they know best. EV’s are part of the plan to destroy America.
EVERYTHING the Communist Progressive Leftist Democrats touch turns to crap. Their policies and agendas make EVERYTHING worse…….but election after election (NJ, NY & Virginia most recently) they keep winning . Unbelievable!!
Those whom the gods would destroy they first make subsidized!
Everything the Government gets involved in turns to fecal matter. When will citizens finally figure it out?
Who got the tax credit – the seller or the buyer? There seems to be a lot of confusion over this. For my solar panels I got the tax credit, for my home improvements the seller got the tax credits. The end results to me may have been the same but I can see how this has the potential to go very wrong. Don’t know how it works with EV. But anyway you look at it, it’s all smoke and mirrors. The item is already over priced so the “tax credit” makes you think you got it for less. Now it’s back to “let’s make a deal”, most people don’t know how to do that so they pay full price, those who do – pay less. But really, people are more than willing to pay for what they want – have you seen the price of some of these big trucks….
Improved batteries in future models won’t help the cars being bought today.
Just think of all the dims that got elected with all the money they skimmed off the top!
I haven’t heard of any qualified mechanics are readily available to work on these EVs. What happens when they break down – just get parked never to used again???? I would not buy one because of the expensive and unavailable charging stations in smaller town. Everyone doesn’t live in the big cities.
Federal government subsidized electric vehicles to drain the power grid.
Now local governments are subsidizing data centers to drain the power grid and the aquifers. What will be next?
I like electric cars but would not buy one for a lot of reasons but a main one is, I don’t want anyone thinking I am a virtue signaling, hippie, “environmentalist” doing it to “save the planet”.
The major obstacle to EV cars was trip anxiety. The not knowing that there would be a charge station when one was needed. This unknown killed the EV vehicle more than anything else. Sec Buttigieg received billions of dollars to provide hundreds of thousands of chargers around the country. Only eight were built. Anytime the government is tasked to do something it fails. The money should have been given to the EV industry that needed the chargers. They knowing how critical this was to their industry would have done the job with more urgency than any government agency. You can bet they would have built more than 8 charging stations. We still don’t know where that money went. Buttigieg should be charged with fraud.
Put all those who supported EVs the electric CHAIR!!!