Republican Senator Bernie Moreno of Ohio isn’t pulling any punches when it comes to government support for electric vehicles. His statement states how many people feel about EVs.
Bernie Moreno wants to become the “car czar” in President Donald Trump’s administration. One of his first targets is the $7,500 tax credit for EV purchases and leases, which have been a major driver of sales. President Trump has agreed with removing the tax credit and the mandates. Trump has stated this many times while on the campaign trail.
“At the end of the day, the $7,500 incentive is catastrophically stupid,” Moreno said that, the government shouldn’t “tell companies what to do and how to have a strategy.”
The tax credit, along with other incentives and benefits included in President Joe Biden’s Inflation Reduction Act, have forced automakers to selling vehicles at a loss with higher prices than gas powered cars and an increase to their investments in EV-related technology. The result has been production of vehicles that are not selling and car companies have yet to turned a profit. The losses have been catastrophic.
Ford Motor Co. took a $1.22 billion loss in its EV division last quarter, and without the tax credit it will be even harder to clear out their EV inventory. Hyundai Motor Co. accelerated its plans to build a new factory in Georgia to take advantage of the tax credits, that will no longer exist. Hyundai will pivot to product hybrid, plug-in hybrids and gas powered cars that buyers want.
The Alliance for Automotive Innovation, an industry trade association, asked Congress to keep the EV tax credits in October. The goal is to sell the electric vehicles they have already produced.
Moreno said, “that changing EV incentives is a reflection that “consumers have spoken.” Consumers are not sold on EVs.
Several Republicans, including Trump, ran on the promise to scrap Biden’s pro-EV rules that encourage automakers to focus on that technology. That includes rules on tailpipe emissions that opponents have labeled a “mandate” because they encourage EV sales.
“There’s never been a case in time where consumers have been more clear about what they want and don’t want,” Moreno said, adding that “a lot of people” don’t want EVs.
Although consumers are still buying more EVs than in previous years, the rate of that growth is winding down. In the face of that, many automakers have pulled back or delayed investments in order to lower costs and develop more profitable vehicles. Several automakers, including Ford, see a major benefit in investing heavily in new hybrid vehicles and plan to keep both hybrid and traditional gas-powered cars as part of their sales mix for the next several years.
Moreno argued that the U.S. holds strategic advantages in combustion engines and hybrids, stating, “If China is dramatically ahead of us on EVs, good for them. But we’re dramatically ahead of them in combustion and hybrids.”
Chinese automakers, despite Moreno’s words, are making similar moves, primarily to dodge new European tariffs on EV imports, according to Reuters.
Hybrid vehicle exports made up 18% of China’s total to Europe last quarter, compared to 9% in the first quarter of 2024. Several companies, including Geely and BYD, have developed new hybrid cars, with Tesla-rival Xpeng planning to launch its first hybrid in early 2025. Chinese carmakers are also still selling a lot of gas powered vehicles, especially abroad in countries where EVs aren’t popular yet.
Will Tesla create a range extender for their vehicles or remain a pure electric car company? In order to increase market share, Tesla may pivot to compete. We shall see.
As the industry adapts, automakers are shifting focus toward diversified lineups, including hybrids, rather than adhering to aggressive all-electric mandates of going all-electric by 2035.
Additionally, Moreno advocates for reducing government intervention in the automotive market. He stated, “We will establish a favorable environment for car companies with good taxes, regulations, and skilled workers. Let the marketplace operate without government interference.”
Moreno’s stance aligns with that of other Republican leaders, including Vivek Ramaswamy, who co-leads President-elect Trump’s Department of Government Efficiency (DOGE). Ramaswamy has announced plans to review government spending related to electric vehicles (EVs), which includes a loan commitment from the Department of Energy to Rivian Automotive.
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