Chapter 1: Understanding Biden's EV Policy

President Biden advocates for a transition from gasoline-powered vehicles to electric vehicles (EVs). His strategy includes providing incentives to both consumers and manufacturers to boost the production and sales of EVs. However, these measures might inadvertently decelerate the evolution of electric vehicles.

Had there been no intervention, the market could have naturally shifted towards EVs, assuming there was sufficient consumer interest. Biden expressed his intent for American manufacturers to lead in EV production. Following discussions with major automakers like Ford, General Motors, and Stellantis in August 2021, the White House announced their collective ambition to achieve 40%-50% of annual U.S. sales in electric vehicles (including battery electric, fuel cell, and plug-in hybrid vehicles) by 2030.

California has taken this initiative further, mandating that all new vehicle sales in the state must be zero-emission by 2035.

Despite these ambitious targets, a significant challenge exists: American consumers are not making the shift to EVs at the expected rate. By manipulating market prices to meet Biden's objectives, the long-term outcomes may contradict the government’s intentions.

Biden acknowledged the high price of electric vehicles and proposed a $7,500 taxpayer-funded credit to make EVs more affordable. His rationale was that lowering the price would encourage greater consumer adoption.

Additionally, Biden urged automakers to ramp up EV production. Under his Investing in America initiative, he unveiled a $15.5 billion funding and loan package aimed primarily at retooling existing factories for electric vehicle production—promoting job growth and a smooth transition to EVs.

This enticing offer allowed manufacturers to shift their production at the expense of taxpayers. With a promise of increased demand, major automotive companies, except Toyota, began transitioning to electric vehicles. The outlook seemed promising, but a significant hurdle remained.

American consumers showed limited interest in purchasing more EVs at that moment. The reduction in market prices led to only marginal increases in demand, while the incentives for production resulted in a substantial oversupply. Tesla, the trailblazer in the EV sector, faced a sharp decline in market share and profitability.

This downturn reduced available capital for future innovations from a company that had been at the forefront of EV advancements.

Other manufacturers encountered similar obstacles. They crafted and produced a range of advanced and futuristic electric vehicles, but consumer interest remained lukewarm. Consequently, these companies had to scale back production, incurring billions in losses—funds that could have been invested in future innovations. For a nascent market, capital investment is crucial.

Furthermore, as of January 2024, the average price of a new electric vehicle was $55,353, which is 17% higher than the overall average for new cars, according to CarEdge.com. This represents a significant increase from 2023, when EV prices were merely 8% above the general market average.

Ultimately, government policies designed to spur consumer purchases of unwanted products are likely to stifle the advancement of electric vehicles. Most automotive companies have invested heavily in the EV sector, which has thus far proven to be far less lucrative than anticipated.

Had the government refrained from attempting to manipulate market demand, the EV sector could have evolved through more organic, market-driven improvements, leading to superior products at lower prices—an outcome typical of a competitive free market.

Instead, manufacturers introduced electric vehicles to the market prematurely, resulting in higher production costs and less thoughtful features.

This situation exemplifies how well-meaning government initiatives can create market distortions that are not only inefficient but also burdensome for taxpayers, consumers, and businesses alike.

Chapter 2: Implications of Biden's EV Policy

Biden's efforts to promote electric vehicles may be more detrimental than beneficial, as shown in various discussions and analyses.

The first video titled "Shocking News: Biden's Electric Vehicle Policy Reversal" explores the unforeseen consequences of the administration’s EV strategies, illustrating how these policies may hinder innovation and market growth.

The second video, "BIDEN TO SLOW EV MANDATES... WILL HEMI'S RETURN?" discusses the potential slowdown in electric vehicle mandates and its implications for traditional automotive designs and consumer choices.