EV Bubble Popping Faster’n Welk?

Is the EV car bubble starting to deflate? First, Ford CEO questioned his own battery range & recharging costs. Now, over-generous gov’t subsidies are said to be helping “collapse” the EV industry as inventory piles up without buyers in sight.

The WSJ was also blunt in opining today’s EV industry dilemma “is a lesson in how industries built by government often also fail because of government.” As its editors noted, “Tesla last week [again] slashed its prices in China to boost sales in an oversaturated EV market … [meanwhile] … about 400 Chinese electric-car makers have failed in the past several years as Beijing reduced industry subsidies while ramping up production mandates.” And, for some reason, the Biden Administration is emulating China’s EV industrial policy. As a result, “Cox Automotive reported this month that EV inventory had swelled to 103 days of supply in the US, about double that of gas-powered cars … Ford recently reduced its EV production targets as its losses & unsold inventory grow. At the end of June, it had 116 days of unsold Mustang Mach-Es, and GM’s electric Hummer had more than 100 days of supply.”

And, this is in an economy that’s supposedly growing? It gets worse. The many EV start-ups in the US are also “floundering as interest rates climb. Lordstown Motors filed for bankruptcy in June. And, Nikola Corps. recently warned this year that it had “substantial doubts” about its ability to stay in business. Concluded the WSJ: “Business failures are inevitable in a dynamic economy, but gov’t will be mainly responsible for the destruction that results from its force-fed EV transition – and the damage may only just be starting.”

Davd Soul