“In fewer than 800 words I can tell you what went wrong with the U.S. electric-vehicle "transition." Let's start by correcting misrepresentations in vastly longer accounts produced elsewhere. The U.S. Big Three have seen their domestic market share shrink, yes, but due to foreign-owned auto plants established in the U.S. on terms that exempted them from the high-cost labor monopoly of the United Auto Workers.
The Big Three voluntarily ceded the sedan market and focused on pickups and large SUVs, which have been shielded from import competition by a 25% tariff since 1964 -- the only part of the U.S. car market to be so shielded.
Electric vehicles haven't been compelling to U.S. consumers and producers for an obvious reason: a relatively low domestic gasoline price.
Failing to tax something isn't the same as "subsidizing" it. But still, economists and auto executives have said for 50 years that the U.S. government should adopt a gasoline tax if it wants to create incentives for high-mileage vehicles.
Instead we got Rube Goldberg fuel-economy mandates. After the 2009 bailout, Team Obama tweaked the rules further to facilitate sales of profitable pickups while tacking on an effective requirement to sell EVs at loss-making prices, even when thousands of dollars in direct taxpayer subsidies were added to the pot.
In a recent lament, the New York Times waves at unnamed "many experts" to say this was a sensible way to foster an EV industry. It wasn't. Real experts with actual names at AlixPartners and McKinsey predicted the result would be what the former called a multi-billion-dollar "pile-up" of money-losing EVs.
Sure enough, companies are reporting big write-downs -- $19.5 billion for Ford last year -- which critics insinuate is somehow the Trump administration's fault for ending the EV mandate.
Wrong. The losses were always present and going to be recognized. Now there will be fewer. If anything, Mr. Trump's method of ending the mandate -- by reducing to zero the penalties for noncompliance -- was mildly redundant. Automakers were already skipping compliance and opting to pay financial penalties under the EV rules. Building a new kind of product, after all, requires billions in investment in new plants, new engineering, new or retrained workers -- for a product that companies had seen no signal from the public that it wanted.
All this was additionally wrongheaded because, in the process, it encouraged exactly the wrong kind of EVs -- large, luxurious vehicles that can command a luxury premium from consumers to defray manufacturer losses, often $50,000 per vehicle, but whose large batteries provide the least net emissions benefit if any.
Underlying this goofy experiment? Decades of op-eds and political speeches demanding that fossil-fuel companies invest in renewables, an obvious category error that somehow became the basis for U.S policy. (Don't think op-eds don't have influence.)
This at a time when investors around the world were voluntarily investing in the lithium-ion battery revolution, including in transportation. Tesla perversely had to battle its way against domestic incentives that required traditional car companies to dump EVs on consumers at a loss.
Tesla, which actually wanted to make EVs, was a net loser under U.S. EV policy. Now it has been overtaken globally by China's BYD -- which began, duh, as a battery company.
The cars Americans want must come from somewhere -- companies with expertise in gasoline vehicles. The U.S. no longer has a national EV incentive program. This doesn't mean it won't have EVs, including from traditional car makers if they see a profit opportunity. Out one side of her mouth CEO Mary Barra once proclaimed GM's all-electric future. Out the other, she winked at shareholders to recognize the enduring profitability of its gas-powered pickup and SUVs. But GM isn't giving up on EVs now that it's free to pursue them in a way that makes sense for shareholders.
To complete the record of futility, the U.S. itself is rapidly becoming a rounding error in global emissions, and passenger-car use worldwide always was. The much-bemoaned failure of America's EV "transition" is only the end of a policy that polluted the U.S. market with uneconomic, nonsensical EVs.
Which brings us full circle. Dozens of columns here since 2008 described or alluded to the moment, which received hardly a peep of dissent elsewhere in the media, when an incoming Obama administration dropped any idea of fossil energy taxes in favor of climate pork. For 20 years, this policy wrong turn proceeded in full view of a press whose deference to a "narrative" precluded it from saying and or perhaps even seeing the truth.
This is a real problem. It starts at the top of U.S. media firms and explains why a transparent folly like the EV boondoggle was allowed to go on for so long.” [1]
If government puts up a tariff or some other barrier like the barrier for American SUVs, the investment soon hides behind the barrier and stagnates there.
1. Long Live the EV. Jenkins, Holman W; Jr. Wall Street Journal, Eastern edition; New York, N.Y.. 22 July 2026: A13.
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