The Patriot Post® · The EV Crisis Goes Global

When Joe Biden took office three years ago, among other things, it was considered a boon for the EV industry. Detroit’s Big Three and the majority of foreign nameplates were already knee-deep in the process of going all-EV in the coming years.

With Biden in office, it was presumed that California-style EV sales requirements were soon to follow, as legislation had been introduced to mandate just that: As a senator, Kamala Harris was a cosponsor of the Zero-Emission Vehicles (ZEV) Act. Its goal was to “set a Federal Zero-Emissions Vehicle standard to boost the market for battery electric vehicles and hydrogen fuel cell vehicles,” according to Senator Jeff Merkley, one of the bill’s authors. “The standard would require that by 2030, 50% of sales for new passenger vehicles are ZEVs, and ramp up 5% each year to 100% by 2040.”

Instead of going through Congress, though, the administrative state created its own rules to accomplish a similar goal. Perhaps because of these regulations, Harris has suddenly turned coy about whether she would sign a new version of the ZEV Act as she promised to do in her 2020 campaign.

Harris’s reluctance to commit may be based on seeing an EV market that’s suddenly gone south just as it’s become more competitive, with several Chinese automakers now knocking on the door. Those EVs aren’t available in America just yet, but they are in Europe. And despite a significant tariff, automakers in the EU are pulling back. For example, Volvo — which is majority-owned by China’s Geely automaker — has announced it’s pausing its march toward a full EV lineup by 2030.

“We are resolute in our belief that our future is electric,” Volvo CEO Jim Rowan told the BBC. “However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds.” Because of Geely’s ownership, Volvo is affected by the Chinese tariffs despite being a long-familiar nameplate in the EU.

These woes are also affecting Volkswagen, which is considering closing German auto and component plants for the first time ever due to overcapacity and the need to cut costs. “Plant closures at vehicle production and component sites can no longer be ruled out without swift countermeasures,” the company said. “The situation is extremely tense and cannot be resolved through simple cost-cutting measures.”

You may recall that Volkswagen’s Tennessee plant unionized earlier this year (after multiple “no” votes), a move our Thomas Gallatin correctly pegged as a job security measure since the plant makes EVs for the automaker (as well as gas-powered vehicles). Volkswagen is like any other company that loves those sweet, sweet government subsidies, and the Biden/Harris administration has been all too willing to hand them out.

This, then, becomes a battle of government vs. government. As Bloomberg reveals, “VW employs about 650,000 workers globally, almost 300,000 of which are in Germany. Half the seats on the company’s supervisory board are held by labor representatives, and the German state of Lower Saxony — which owns a 20% stake — often sides with trade union bodies. The setup is part of a labyrinthine governance system where management must gain the billionaire Porsche-Piech family and labor side support for major decisions.” For their part, the state government of Lower Saxony insists, “We expect that the issue of factory closures will not arise due to the successful use of alternatives.”

Echoing that sentiment is VW’s Works Council Chair Daniela Cavallo. “With us, there will be no site closures,” she said. “Instead of making one-sided savings at the expense of the workforce, we now need a strategic boost for the actual weaknesses: product, complexity, processes, synergies. That is the plan we need.” Meanwhile, the elephant in the room stares them down: There’s only so much of an EV market, even with subsidies and carveouts.

Yet others whistle past the graveyard, too. Stellantis, the foreign company that now owns such revered American nameplates as Chrysler, Ram, and Jeep, is winding down production of its gas-powered Ram 1500 truck in one Michigan plant while considering moving its production to Mexico and assembling a Ram EV at a different Michigan plant, costing an unknown number of UAW employees their jobs.

On the other hand, Stellantis recently benefited from millions of taxpayer dollars — $334.8 million and $250 million grants just this past July, in fact. The Energy Department grants will fund the conversion of plants in Illinois and Indiana into EV production facilities. Perhaps this is why Stellantis is one of the few automakers within sight of EV profitability.

While some experts claim that we’ve reached peak EV, never underestimate the capacity of Beltway bureaucrats to goose the market some more. This is why it’s vitally important that we get a straight answer from Kamala Harris (and, for that matter, Donald Trump) about continuing the support we’ve used to force the creation of the EV market, including the fate of the billions allocated for what’s been a handful of federally built EV chargers.

Meanwhile, out here in America, we’ll just keep filling up our gas-powered trucks and SUVs. That’s where the real job creation can be.