The Government has a miserable track record in picking winners and losers and they are showing how to best hurt the economy and American EV car production all at once in a quest to make us more green.
The Wall Street Journal (paywall) laid out the entire dysfunctional plan for the Biden Administration to drive us to driving green. Instead of letting market forces win, they want to tip the scales by dropping expensive batteries on one side and ignoring the American consumer and, frankly, common sense.
From the article: "General Motors last week said it is delaying electric pick-up truck production in Michigan, citing slowing demand for EVs and the need to make them more
profitable. But the Biden Administration’s back-door EV mandate is ironically
causing trouble for its plans for green-vehicle investment.
"On Sept. 14, the day before the United Auto Workers launched its strike, the
Energy Department sent letters to Ford, General Motors and Stellantis asking for
help understanding “specific challenges” to its proposed rule that would reduce
the credits under the corporate average fuel economy (Cafe) standards for
producing electric vehicles.
"The issue is technical, but bear with us because this is a tale of regulation at
crazy cross-purposes. Congress’s 1979 Chrysler bailout required the Energy
Department to impute a “petroleum equivalency factor” for EVs they might
produce to give Detroit auto makers a means of complying with Cafe standards
besides making more fuel efficient trucks."
The crazy technical issue is something which could only be dreamed up in Washington - a completely made up multiplier to calculating the impact electric vehicles has on Cafe calculations. As an example, an internal combustion engine vehicle may have an EPA rating of 18 MPG, but a similar EV truck which may have a calculated MPG of 30 MPG would be credited with 200.1 MPG, a 6.67X multiplier - just because.
This multiplier let the automakers meet highly stringent Cafe standards by selling only a small number of EVs to make up for the other cars in their fleet which were more popular with consumers and more profitable.
The problem the Center for Legal Action has with this scheme is we believe it is entirely illegal and was added to EVs outside Congressional approvals. "Although Congress had limited this multiplier credit to cars that run on biofuels, natural gas and hydrogen, the Clinton Administration said it was only fair to give the bonus to EVs too. Subsequent Presidents kept this EV fillip because it has let Detroit auto makers churn out profitable gas guzzlers while meeting ever-rising fuel economy mandates."
Automakers know the public is not ready for high-priced, limited-range, inconvenient EVs at this time and have used this random ratio to be able to sell more of the trucks and SUVs consumers really want. But now the Biden Administration, bowing to pressure from the Sierra Club and Natural Resources Defense Council, wants to remove this ratio completely from EVs.
This backdoor attack will all but force automakers to move to selling only EVs by 2032 or face stiff fines. Sadly, for American autoworkers, this will mean shutting down factories and losing large numbers of well-paying American manufacturing jobs as EVs require far less people and far more imported components than traditional vehicles.
And consumers will ultimately lose the choice of what their new car is powered by, regardless of whether they can afford it or not.
The Center for Legal Action is fighting this and other illegal mandates and requirements at the Federal and State level, including onerous and dangerous California mandates and Presidential directed Federal Agency overreach.
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