The Biden administration’s Environmental Protection Agency has revealed its ambition: to phase out gas-powered cars in favor of electric vehicles (EVs). Incredibly, this announcement comes as we are flooded with overwhelming evidence that EVs are a market loser.
Indeed, the artificial boom and then meltdown of the EV market is a modern industrial calamity. It was created by government, social media, wild disease frenzy, far-flung thinking, and the irrational chasing of utopia, followed by a rude awakening by facts and reality.
Hertz CEO Stephen Scherr has been booted out because of a vast purchase of an EV fleet that consumers didn’t even want to rent. The company has now been forced to sell them at a deep discount and in a market where consumers are not particularly interested.
Looking back, however, Mr. Scherr’s decision to bet everything on an EV boom was a disaster that was highly praised at the time. Only last year, the company bragged: “This morning, [Hertz] was recognized by The White House for our efforts to expand access to electric vehicles across the country. Demand for EV rentals is growing and we’re here to help our customers electrify their travels.”
Pleasing the Biden administration is not the same as pleasing consumers.
The demand turned south fast in a real-world test of drivers. But that’s not all. Hertz could not make its investment pay no matter what it did.
The key issues with EVs are as follows.
The cost upfront is much higher.
Financing charges are higher.
They depreciate at a higher rate than internal combustion cars.
The insurance is more expensive, by at least 25 percent.
Repairs are much more expensive, if you can get them done at all, and take longer.
Tires are more expensive and don’t last as long because the car is so heavy.
Refueling is not easy and missteps here can have nightmarish consequences.
They are more likely to catch fire.
Any motor vehicle accident that affects the battery can lead to repairs higher than the value of the car, which is totaled with so much as a scratch.
To top it all off, there is no longer any financial advantage to the driver. It now costs slightly more to charge under many conditions than to refuel with gasoline.
The novelty of driving one for a day wears off after the first day. At first, they seem like the greatest thing that ever happened, like an iPhone with wheels. That’s great, but then the problems crop up and people start to realize that they are fine for urban commutes with home chargers and not much else.
They make truly terrible rentals. Obviously, under rental conditions, people have to use charging stations rather than a charger in the garage. That means spending part of your vacation figuring out where to find one.
Not all are superchargers, and if it is a regular charger, you are looking at an overnight wait. If you do find a station with fast chargers, you might have to wait in line. They might not work. You waste hours doing this. And you likely have to reroute your trip even to find a station without any certainty that you will get a spot with a functioning charger.
No one wants to do this. When you rent a car, all you want is a car that goes the distance. And typically, car rentals are for going some distance or else you would just take a taxi or a Lyft from the airport. You might need to drive for several hours. And God forbid that this takes place in cold weather because that can reduce your mileage by half. Your whole trip will be ruined.
Why in the world would anyone want to rent one of these things rather than a gas-powered car? You might be better off with a horse and carriage.
Did Hertz think of any of this before it spent $250 million on a fleet? Nope. It was just doing the fashionable thing.
Again, I’m not knocking some uses for EVs. If you think of them as enclosed and souped-up golf carts, you get the idea. They can be wonderful for certain urban environments as long as you don’t overuse them and have to get them repaired. You also have to be in a financial position to afford the higher costs all around, from financing to insurance to repairs and tires. And you have to be prepared to take a big loss on resale, if you can even manage to find a buyer.
There is money to be made in this market, as there is with any niche good or service. But that is covered with normal market conditions, not massive subsidies, mandates, and frenzies. The Hertz case proves it. It is a perfect clinical trial of these machines. We now know the answer. They cannot work.
And thank goodness, because if the United States truly switched over in a big way from gas to electric, we would face other disasters. The wear and tear on roads is much worse because of the sheer weight of the cars, which is 25 percent higher than gas cars on average. Many parking garages would have to be rebuilt with new reinforcements.
Then there is the strain on the grid. There is no way that the industry could handle the demand. Brownouts and travel restrictions would be essential. All of this would pave the way toward 15-minute cities.
Please remember how this craze began. It was lockdown time and automakers suspended orders for parts and chips. They stopped cranking out cars. When demand intensified, the chip makers had moved on to other things, so delays escalated. By the summer of 2021, there was a general panic about a growing car shortage.
At that point, consumers were willing to buy anything on the lot, EVs among them. The sales records were completely misinterpreted. The manufacturers made huge investments, and the car rental companies did, too. But the product had not really been tested. That test is taking place now, and the EVs are completely failing.
We keep hearing that this is still too early, that development has a long way to go, that more charging stations are coming, that manufacturers are going to overcome all of these problems in time. All of this sounds very similar to what the producers of mRNA shots say: This was just a trial run, and they will get better the next time.
Maybe, but it’s doubtful. There is a huge problem in the investment market right now. EVs are massive losers. Consumers, manufacturers, car rental companies, and every other market in which these lemons are made available are running away from them as fast as possible. They had their day in the sun and got fried.
There is another problem: surveillance. The car can be tracked anywhere and shut off at a moment’s notice. This is obviously a great thing if the government desires a social-credit system of citizens control.
At this point, it is doubtful that the industry can recover. And yet, even now, the Biden administration is planning more subsidies, more mandates, and more restrictions on gas cars, and is digging itself even deeper into this hole.
You simply cannot make up nuttier stuff. At some point, we could see manufacturers making the cars just to satisfy the central planners but otherwise preparing to chop them up and throw them out. They would likely be happy to dump them in the ocean, but that isn’t allowed either.
