Biden's EV madness
President Joe Biden’s massive electric vehicle (EV) agenda will subsidize the lifestyles of America’s well-to-do while hitting average people the hardest, economists and auto market analysts told the Daily Caller News Foundation.
The Biden administration is aggressively regulating the U.S. auto market to drastically increase the proportion of EVs sold over the coming decade, but consumer demand has not taken off as quickly as proponents had projected despite the subsidies made available by Biden’s flagship climate bill, the Inflation Reduction Act (IRA). Manufacturers are slashing prices of their EVs to make the vehicles more appealing to consumers, which will increase prices for internal combustion engine (ICE) cars to compensate; this dynamic will only pick up speed and infect the used-car market favored by lower-income consumers as the administration’s stringent regulations kick in over time, economists and auto market analysts told the DCNF.
EVs benefit from direct subsidies, such as the IRA’s $7,500 consumer tax credit, but they also will increasingly benefit from a hidden cross-subsidy whereby manufacturers drop their prices and offset those losses by boosting prices of ICE vehicles, experts explained to the DCNF.
“As the mandated market share of EVs grows, the number of ICE vehicle sales must shrink. A decreasing number of ICE vehicle sales would have to prop up an increasing number of EV sales. The price hike per ICE vehicle would have to increase to offset losses on the ever-larger volume EVs sold,” Marlo Lewis, a senior fellow for the Competitive Enterprise Institute, told the DCNF. “Used cars compete with new cars for customers. If new car prices rise, so will used car prices. Even with generous federal, state, and manufacturer incentives, EVs cost thousands of dollars more than comparable ICE vehicles, and millions of middle-income households are already priced out of the market for new vehicles.”
The Biden administration’s Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) have each promulgated major emissions or fuel economy regulations designed to effectively require massive increases in the number of EVs sold in the 2030s. Despite these regulations and massive federal spending intended to help advance EV production and demand, American manufacturers are losing billions of dollars on their EV product lines.
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I have no interest in owning or operating an EV. There is no charging station anywhere near my home in the country.
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