{"id":352904,"date":"2024-12-01T07:54:01","date_gmt":"2024-12-01T06:54:01","guid":{"rendered":"https:\/\/climatescience.press\/?p=352904"},"modified":"2024-12-01T07:54:03","modified_gmt":"2024-12-01T06:54:03","slug":"automakers-may-rue-choosing-bureaucrats-over-customers","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=352904","title":{"rendered":"Automakers may rue choosing bureaucrats over customers"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From CFACT<\/a><\/p>\n\n\n\n

By Duggan Flanakin<\/a><\/p>\n\n\n\n

Whatever happened to the old bit of business wisdom: The customer is always right?<\/p>\n\n\n\n

U.S. and European automakers abandoned this mantra to please unelected bureaucrats in Brussels, New York, and Doha and the sycophants who rose to political power by championing their prophecies of doom. They may now be regretting that \u201cgung-ho\u201d accession to the marching orders of the climate commandos.<\/p>\n\n\n\n

Today, the sign of doom in the auto industry is lots full of unsold battery-electric vehicles (BEVs) that customers have said for years they do not trust with their lives and fortunes.<\/p>\n\n\n\n

Admittedly, the post-COVID inflationary spiral that has led to soaring interest rates has not helped the auto industry, but far too many of their woes are self-inflicted. Meanwhile, the Chinese are smiling, knowing they hold four aces in their hands.<\/p>\n\n\n\n

General Motors CFO Paul Jacobson in June announced a 50,000 cut in BEV production. The reason? \u201cWe don\u2019t want to end up in a position where we give out a production target and then we just blindly produce and end up with hundreds of thousands of vehicles in inventory because the market\u2019s just not there yet.\u201d<\/p>\n\n\n\n

Perhaps Jacobson was reading the tea leaves, predicting a Trump victory that could signal the end of the $7,500 tax credit under Biden\u2019s misnamed Inflation Reduction Act. Or maybe he was looking at the numbers showing over half the public has zero interest in buying a vehicle that does not meet their real-world needs.<\/p>\n\n\n\n

Or maybe Jacobson had realized that most of the billions of taxpayer dollars allocated to build out a charging network had disappeared down a rabbit hole.<\/p>\n\n\n\n

No matter. GM just announced it was cutting 1,000 jobs and promising to provide incentives equaling those from that likely canceled $7,500 tax credit.  This was on top of the September layoffs of 1,700 factory workers. GM had earlier reported a $1.7 billion loss in the sales and production of its BEVs in the fourth quarter of 2023.<\/p>\n\n\n\n

Ford, equally desperate to unload its BEV inventory, announced in September that BEV chargers and home installations would be covered in the purchase price of their Model e BEVs. The downside of this bold move is that Ford lost<\/a> nearly $130,000 on every one of the 10,000 BEVs it sold during the first quarter of 2024 and projects a $5 billion loss on the Model e line for 2024.<\/p>\n\n\n\n

Ford also furloughed<\/a> 730 factory workers and halted production of its BEV F-150 Lightning pickup truck<\/a>, 2023\u2019s \u201ctruck of the year,\u201d until next year \u201camid waning consumer demand for electric vehicles.\u201d But the real problem may be that BEV pickups are, as one auto industry maven said<\/a>, \u201cthe wrong product\u201d?<\/p>\n\n\n\n

Earlier, Ford had scrapped plans<\/a> for an all-electric, three-row SUV to focus on hybrid models that use an entirely different technology and offer longer driving ranges and greater affordability. All this despite a nationwide 2-year drop in BEV prices from $65,000 to $56,648.<\/p>\n\n\n\n

And just this week, Ford announced it was cutting 4,000 jobs, mostly in Germany and the United Kingdom \u2013 a 14% cut in its European workforce. Ford cited weak BEV demand, poor government support for the BEV shift, and competition from subsidized Chinese automakers.<\/p>\n\n\n\n

Auto rental giant Hertz just expanded its BEV selloff, with used Tesla Model 3s now available for under $20,000. Hertz hopes to sell off 30,000 BEVs as it withdraws from the BEV market, but the 89% increase in BEV depreciation costs (about $537 per vehicle per month) has impacted its bottom line. Tesla\u2019s own price reductions apparently created a ripple impact in the used BEV market.<\/p>\n\n\n\n

Meanwhile, the Detroit Free Press<\/em> reported in October that \u201cit\u2019s been a noisy, turbulent and troubling year for [Stellantis], the automaker that owns the Jeep, Ram, Chrysler, Dodge, and Fiat brands, and the future isn\u2019t exactly clear.\u201d During 2024, said the paper, Stellantis haws seen consecutive quarterly reports of 20% or more in declining U.S. sales after \u201ceye-popping profits\u201d in 2023. The company has also paused production<\/a> at its Italian plants several times this year.<\/p>\n\n\n\n

Elsewhere in Europe, despite equally draconian BEV mandates, automakers are approaching panic mode over the wide gap between customer choice and government mandates.<\/p>\n\n\n\n

Germany\u2019s largest auto insurer reported that one in three BEV owners switched back to gasoline or diesel vehicles this year, up from 14% in 2021. The drop could stem from the abolition of the taxpayer-funded $4,900 to $6,500 discounts. Or maybe, as one German reporter observed<\/a>, \u201cApparently, electric cars cannot convince many owners to stick with this form of propulsion in the long term.\u201d<\/p>\n\n\n\n

Things are so bad in Germany that Volkswagen<\/a>, for the first time in its 87-year history, is planning to close \u201cat least\u201d three of its factories, lay off tens of thousands of employees, and downsize its remaining German plants.<\/p>\n\n\n\n

A recent survey showed that only 29% of Germans would comply with a law forcing them to buy BEVs and just 18% would consider a BEV for their next purchase. Worse, just 3.6% of ICE drivers switched to BEVs in Germany this year, and BEVs accounted for just 2.9% of all vehicles on Germany\u2019s highways.<\/p>\n\n\n\n

The collapse of Germany\u2019s governing coalition is in part due to its ongoing commitment to banning the sale of most ICE vehicles by 2035. Germany also suffers from the high cost of electricity, fueled largely by taxes, that only add to the cost of an all-electric vehicle fleet. The influx of cheap Chinese BEVs only adds to Germany\u2019s woes in a nation that has depended on the automobile for 8% of its annual economic output and 16% of its exports.<\/p>\n\n\n\n

In the United Kingdom, sales of BEVs are failing to keep up with the wider market, according to the BBC. While fleet BEV sales increased, sales of BEVs to individuals fell by 7.7%, reflecting (according to the Society of Motor Manufacturers and Traders) \u201clow growth, weak consumer confidence, and high interest rates.\u201d This prompted SMMT to urge the Starmer government to provide incentives to get private buyers to choose BEVs.<\/p>\n\n\n\n

While Jaguar rebrands itself<\/a> to please a societal fringe, British automakers were shocked by a Court of Appeal ruling that auto dealers have a \u201cfiduciary duty\u201d to inform customers about bonuses, commissions, and fees they receive from lenders.<\/p>\n\n\n\n

Lenders responded by barring auto dealers from receiving commissions on the 90% of vehicles purchased via auto loans. The decision could lead to the closure of auto dealerships, forcing people to buy directly from the manufacturer, usually sight unseen. But it could also lead to a major downward trend in auto purchases, as people are accustomed to dealers, not bankers.<\/p>\n\n\n\n

It remains to be seen just how the incoming Trump Administration will impact the BEV marketplace. Trump keeps saying that BEVs have a role while disparaging<\/a> automakers now venturing into hydrogen-based fueling systems. But if, as expected, the subsidies go away, will the BEV revolution merely be slowed or brought to a screeching halt?<\/p>\n\n\n\n

That may depend in large part on how automakers respond to the shifting sands of time and money.<\/p>\n\n\n\n

This article originally appeared at Real Clear Energy<\/a><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Whatever happened to the old bit of business wisdom: The customer is always right?<\/p>\n

U.S. and European automakers abandoned this mantra to please unelected bureaucrats in Brussels, New York, and Doha and the sycophants who rose to political power by championing their prophecies of doom. They may now be regretting that \u201cgung-ho\u201d accession to the marching orders of the climate commandos.<\/p>\n","protected":false},"author":121246920,"featured_media":352905,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691830138,691831764,691828423,691831763],"class_list":{"0":"post-352904","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-battery-electric-vehicles-bevs","9":"tag-paused-production","10":"tag-tax-credit","11":"tag-unelected-bureaucrats","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/12\/0Electric-vehicles-charging-stations.jpg?fit=2508%2C1672&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1tO0","jetpack-related-posts":[{"id":336250,"url":"https:\/\/climatescience.press\/?p=336250","url_meta":{"origin":352904,"position":0},"title":"Court deals body blow to unchecked bureaucratic power","author":"uwe.roland.gross","date":"12\/07\/2024","format":false,"excerpt":"By striking down a 40-year-old legal precedent that allowed unelected and unaccountable federal bureaucrats to interpret ambiguously worded statutes as they see fit, the Supreme Court has jerked the chain of an administrative state that had become accustomed to riding roughshod over the Constitution\u2019s Separation of Powers.","rel":"","context":"In \"Chevron\"","block_context":{"text":"Chevron","link":"https:\/\/climatescience.press\/?tag=chevron"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/07\/0supreme-court-building.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/07\/0supreme-court-building.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/07\/0supreme-court-building.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/07\/0supreme-court-building.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/07\/0supreme-court-building.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":290515,"url":"https:\/\/climatescience.press\/?p=290515","url_meta":{"origin":352904,"position":1},"title":"Morano: “Dubai Climate Summit Where \u201cDemocracy Goes to Die\u201d","author":"uwe.roland.gross","date":"08\/12\/2023","format":false,"excerpt":"VP Harris heard pushing a very expensive green agenda to the world. 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