Da Techguy's (no longer backup) Blog

By Christopher Harper

When an industry needs federal subsidies, it’s almost certain that businesses are in trouble.

That’s precisely the state of affairs for the electric car industry.

Here in Pennsylvania, the federal and state governments plan to build “alternative fuel corridors” along the interstates, sucking millions of dollars into an industry that should be self-sufficient.

Think gasoline stations. Was there ever a time that gas stations needed federal subsidies?

But Joe Biden plans to spend $7.5 billion for electric vehicle charging stations nationwide. The federal government gives money to Pennsylvania and the other states to distribute, and a second pot of discretionary funding will come straight from the U.S. Department of Transportation.

Pennsylvania will receive $171.5 million for electric vehicle charging over the next five years under the program. The Pennsylvania Department of Transportation is preparing to open grant applications for the first year of funding for about $24.5 million.

We all know that the cost will exceed $7.5 billion because government programs never come under budget.

Here’s an idea: Since Elon Musk has already built an extensive charging system for his Teslas, I would wager he’d create a less costly and more efficient plan than any government.

Silly me! I forgot Musk has the wrong kind of politics!

But there’s more. More money will be needed to subsidize the electric car industry.

Ford’s electric vehicle business lost $2.1 billion in 2022 and has projected $3 billion in losses for 2023. When a company loses that much money, it’s likely to lean on governments for subsidies.

Those losses came despite government rebates for buyers of up to $7,500 and a significant increase in the number of vehicles bought.

All told, Ford plans to spend $50 billion by 2026 on electric vehicles.

Alternatively, the company’s gas-powered business, which it is calling Ford Blue, and its commercial and government fleet, Ford Pro, generated $6.8 billion and $3.2 billion in adjusted income in 2022, respectively.

Biden has made the electric vehicle industry a cornerstone of his executive policy—a policy that includes “voluntary” standards through which he expects half of all new cars to be electric by 2026 and to achieve fuel-efficiency standards of 55 miles per gallon during the same period.

Finally, the electric vehicle “revolution” neglects flyover country for the most part. EVs work fine in balmy climates, where owners drive long distances and have good weather for much of the year.

Simply put, EVs need more frequent charging in Pennsylvania than in California.  

Here’s some sage advice from James Meigs, a senior fellow at the Manhattan Institute and the former editor of Popular Mechanics.

“Governments generally aren’t very good at picking the technologies of tomorrow. Maybe the car of the future will run on batteries; maybe it will be hydrogen fuel cells, maybe it will be super-efficient combustion engines. Nobody knows for sure, least of all state and federal bureaucrats,” he wrote recently. “Instead of limiting our choices, our leaders should let innovation flourish and let Americans drive what they want.”

Amen!