What do you suppose will happen when they build them – but no one comes?
Within the next couple of years, almost every car company will be building – and trying to sell – electric cars.
It won’t be just Tesla’s cars – which cars Tesla is already having trouble trying to sell. Chiefly, because there is a built-in limit to the number of $35,000 and up cars you can sell – regardless of the number you build.
Imagine a real estate developer who only built $350,000 houses – heedless of the ability of people in the area to buy them. The homes are “nice” – they have triple-paned casement windows and granite countertops and three bathrooms.
But no one comes.
Imagine a quadrupling of EV production – and that’s a lowball figure – for a “market” that constitutes at the present moment about 1 percent of the total and which is driven almost entirely by government mandates and propped up by taxpayer-mulcted subsidies and which no one has yet figured out how to earn an honest dollar from.
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The government can – and has – decreed the manufacture of all these EVs, chiefly via regulations that only EVs can comply with. These include the overt regs requiring a certain number of “zero emissions” vehicles be made. Since only EVs qualify as “zero emissions” vehicles – even though their emissions aren’t zero just elsewhere – the reg amounts to a de facto EV manufacturing quota.
Another one – less overt but just as de facto – is the federal fuel economy fatwa known as CAFE, which may soon rise to nearly 50 miles-per-gallon on average. Not highway.Average.
The only way for a car company to get its fleet of vehicles to average anywhere near 50 MPG – and thereby placate Uncle – is to manufacture lots of EVs, which use no gas at all and so up the CAFE average.
But Uncle can’t force people to buy all these EVs.
Soon, he will have to do exactly that. In order to avoid both embarrassment as well as the collapse of the car market itself, which is probably going to happen regardless – and especially if Uncle decrees that people must buy EVs.
Which would amount to the same thing as a decree that everyone must buy a $350,000 home – regardless of their ability to pay for it.
Why not prime rib dinner every night for everyone, too?
