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EV Dilemma


EV demand has diminished but the federally mandated car maker requirements to decreases carbon emissions are still in place.

They’ll be fined by the National Highway Traffic Safety Administration if they fail to meet Corporate Average Fuel Economy requirements (in the $ Billions).

Those who believe it is our responsibility to support pro-climate initiatives with the purchase of their vehicle will be placed in a tough spot if they can’t afford one that is climate friendly (assuming car makers price the higher cost electric vehicles accordingly).

Those who do not consider our purchase of vehicle to be affiliated with climate responsibility will be inclined to purchase ICE vehicles based on value desires.

In either case, there will be a higher market demand for the most economic option of vehicle (ICE vehicles).

Tesla vehicles have significantly come down in price, and they have first mover advantage, with energy credits and far superior battery capabilities.  And all they sell is ‘electric’.

The Detroit 3 and other traditional new domestic car makers, may just eat the fines and sell as many vehicles as possible to provide them their best ROI.

No easy solution.

If the EV movement is propelled forward outside of Tesla, it likely will happen because of Federal Government intervention.

Tax credits to the car makers and tax credits to the purchasers of vehicles.

For those who believe the US is a capitalist economy, there may be animosity towards this type of strategy (government intervention).

But a common misconception about our economic market is that it is a truly capitalistic one.

Because it is not.

True capitalism is when private companies act freely without government intervention. Adam Smith … laissez-faire.

A socialist economy is one where the government controls the markets and opportunity and it is not a market economy.

The American economy is more closely aligned with an interventionist economy, kind of a hybrid between a capitalist economy and a socialist one.

It’s been this way after the true capitalism run ended from 1865 – 1910.

In this economy, the government intervenes regularly even though it is still very much a market economy. Subsidies. Regulation. Spending bills.

The ultimate takeaway here is that as of now, the pricing of electric vehicles and the lack of a viable infrastructure paints a cloudy picture of what the EV market will become.

I do believe that EVs and HEVs will grow significantly over the next decade.

But catapulting forward to some of the original projections of 50% more of the market in the next 10 years, will be very difficult, unless the federal government gets involved to provide incentives for the market to become this (or increases in fines for non-compliance).

Enormous challenges ahead.

But it wouldn’t be any fun, if were any other way … right?

Make it a great day, everyone!

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SCN – Search Consulting Network

Jim Guerrera

Author Info

Jim Guerrera

Jim Guerrera, Managing Director, founded SCN in 2000. Jim is primarily responsible for the development of the leaders at SCN, strategic planning, the hiring and development of company associates, culture leadership, core value leadership, sales le...

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