More Questions about Electric Cars

By The Antiplanner

Four months ago, the Antiplanner observed that the market for electric cars was supposedly booming. Yet I was skeptical. Ford, Toyota, and other mainstream manufacturers were making very limited runs of electric vehicles, making it hard to get one. Others, such as Fiat-Chrysler, weren’t making any at all. Other than Tesla, many of the all-electric manufacturers such as Lucid and Fisker seemed to be mainly producing vapor-ware and what they did produce was pretty high priced. Only Tesla was doing well.

Since I wrote that post, there were media reports of a glut of nearly 100,000 unsold electric vehicles on dealer lots. Manufacturers were forced to deeply cut prices, which still didn’t end the glut.

Now Ford, which got a lot of publicity for its F-150 Lightning pickup, has announced that it is postponing a planned $12 billion investment in electric vehicle factories. Even with government subsidies to electric cars, says the company, people aren’t buying them as fast as it hoped. General Motors is delaying production of the pickup that would have been its answer to the Lightning. Toyota’s chair, Akio Toyoda, is openly questioning the viability of electric vehicles.

How can Tesla make money when more traditional manufacturers can’t? The answer is that a large share of Tesla’s revenue, and the key to its profits, comes from selling EV credits to companies like Chrysler that don’t make their own fully electric vehicles. In 2020, the credits Tesla earned were twice as much as its reported net profits, indicating it lost money on the cars themselves.

A new report from the Texas Public Policy Foundation says that the real cost of electric cars is far greater than would be suggested by the price tags manufacturers put on those cars. The report calculated that the various subsidies combined with regulatory credits totaled to nearly $50,000 per vehicle in 2021.

Ford, which doesn’t sell enough electric vehicles to earn EV credits from other companies, lost nearly $73,000 for each electric vehicle it sold in the second quarter of 2023. The Texas Policy report also questioned the cost of increasing the nation’s electrical generation capacity sufficiently to power large numbers of electric vehicles, an issue raised by the Antiplanner two years ago.

All of this makes me wonder if electric vehicles are the wrong solution to the climate issue. Perhaps we should stick with internal combustion engine vehicles but explore whether biofuels can reduce net carbon emissions better than battery-powered vehicles. There are still plenty of ways we can make motor vehicles more fuel efficient, including using hybrid electric motors. But to completely end net carbon emissions, biofuels might be the answer.

“The downside to biofuels,” says one website, “is the massive amounts of land that would need to be devoted to their production.” But the United States, at least, has a huge amount of land. The Department of Energy estimates that just the waste from some of our land uses could produce enough biofuels to power all domestic airlines. Highway vehicles use about seven times as much energy as airliners, but it might be possible to reduce that while increasing biofuel production on existing croplands.

Biofuels might be more expensive than fossil fuels, and they will probably require some adjustments to engine designs. But people who truly believe that climate change is a serious problem, and aren’t just using it to promote their social agenda, should consider biofuels as an alternative to EVs.

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

Originally published by The Antiplanner. Republished with permission.

To read more about the economics of electric cars, click here.

To read more about the problems with EVs, click here.