Automakers are rethinking EVs, but a Harris administration isn’t likely to ease up on the mandates

Automakers -- and the dealerships who sell those vehicles -- continue to struggle with their electric vehicle targets, posting huge losses and scaling back EV targets. 

The Biden administration’s EV mandate is expected to require more than half of all cars sold in America to be electric in just seven years. Vice President Kamala Harris, The Washington Free Beacon reports, has been even more aggressive than President Joe Biden in her ambitions to force Americans to drive electric vehicles. 

During her 2020 presidential election campaign, she promised to enact policies requiring 50% of all EVS sold to be electric by 2030, and 100% to be electric by 2035. 

“By 2030, we will run on 100 percent carbon-neutral electricity, all new buses, heavy-duty vehicles, and vehicle fleets will be zero-emission,” an archived version of her campaign website stated. As a California Senator, she co-sponsored legislation mandating that 43% of cars sold will be electric by 2027. By 2035, the bill would have required 100% of all cars sold to be electric. Her website "kamalaharris.com" has recently undergone extensive sterilization, and no longer displays that policy.

Former president Donald Trump has been critical of the mandate throughout his campaign and vows to reverse the mandate on his first day in office, should he be elected. 

Mandating losses

While the Biden administration, and a possible Harris administration, wants American consumers to drive EVs, dealers across the country, are resisting the plan. 

Ford posted $1.1 billion in losses on its electric vehicle lines in the second quarter. With 26,000 units sold in the quarter, the company lost nearly $44,000 on every EV sold. In its earnings statement, the company cited industry-wide pricing pressure as a primary cause. 

For the past couple of years, energy expert Robert Bryce has been tracking the company’s quarterly losses on his Substack. The company, Bryce reported, lost $4.7 billion on its EV business in 2023, which came to $64,731 on each EV it sold. Over the first two quarters of this year, Ford lost $2.5 billion on 36,000 EVs it sold, meaning it lost over $68,000 on each EV sold this year. The company stands to lose $5 billion on the business by the end of the year. 

In the face of these staggering losses, Ford has been scaling back its EV plans. The automaker announced in April that it was delaying the launch of an electric SUV with three-row seating by two years. The vehicle was to be produced at its Oakville Assembly Complex in Ontario, Canada, but the company said it was going to use the facility to build more diesel-powered F-Series Super Duty pickup trucks. In June, Ford said it was delaying by nine months full production of the all-electric Ford F-150 Lightning at its west Tennessee facility. 

In a roundabout way, the company cited sluggish sales as the main reason for the changes. On the delay of the launch of the electric SUV, Ford CEO Jim Farley said, “We are committed to scaling a profitable EV business, using capital wisely and bringing to market the right gas, hybrid and fully electric vehicles at the right time.” 

In ramping up production of the Super Duty trucks, Ford said it would provide customers with “more freedom of choice.” The reason Ford gave for the delay at the Tennessee plant was a “read on the economy.” 

Dialing back commitments

“It's clear that the major automakers are dialing back their commitments to EVs. And it's not just in the U.S. It's in Europe as well. They are finally understanding that the average auto buyer doesn't want an EV, ” Bryce told Just the News.

During the quarterly earnings call, Farley suggested the slowing demand was the result of “misconceptions” concerning EVs’ resale value and insurance, range and charging, and battery life. 

“And OEMs [original equipment manufacturers] like Ford must do a much better job in educating our customers about the advantages that an EV offers in terms of cost of ownership,” Farley said. 

Ford on the whole, remains profitable. In the second quarter, it posted a net income of $1.8 billion and adjusted earnings before interest and taxes (EBIT) of $2.8 billion. This was due to its gas-powered Ford Blue business earning $2 billion EBIT, and its fleet business, called Ford Pro, bringing in $5.5 billion EBIT. 

Tesla posted disappointing results in the second quarter. The Austin,Texas-based company’s net income fell 45% compared with a year ago, the Associated Press reported. This was the second straight quarterly net income decline for the electric automaker. 

Tesla said earlier this month that it had sold 466,140 vehicles worldwide from April through June, down 4.8% from the same period last year. Tesla CEO Elon Musk had predicted that the company would sell 1.8 million by the end of 2024, but with 831,000 sold in the first half of the year, it may miss that target. 

Porsche announced this week it is dialing back its commitment to have 80% of its sales being electric by 2030, Electrek reported, after sales fell 51% in the first half of this year. 

“The transition to electric vehicles will take longer than we assumed five years ago,” the statement said. Instead, the company said it will base its sales on demand, which is usually how businesses work.

General Motors, Mercedes-Benz, and many other automakers have also been lowering their commitments to EVs as demand for the vehicles falls far short of the automakers’ goals. 

“I think regardless of whether Harris wins or Trump wins, it's inevitable that these EV mandates are going to be rolled back. Because they will kill the auto sector,” Bryce said. 

The entire North American auto industry could be in danger. Last year, Canada passed a mandate requiring 100% of new car, van, SUV, truck, and crossover sales in Canada be electric by 2035. A study by Canadian economist Ross McKitrick found that the Canadian automobile industry will go into losses by the late 2020s, and these “will be permanent unless and until EV production costs fall enough that a mandate is unnecessary.”

Transparent losses

Ford’s losses on its EV line have been more visible than other automakers. In its earnings reports, Ford breaks out its EV business from other lines. Ford CEO Farley remarked on this during the company’s earnings call Wednesday. 

“What we learned is that it's incredibly important to be transparent about Model E losses inside the company as well. Forces — this forced accountability, and the result is our team is getting much more strappy and resourceful in terms of turning the business around. We are now more disciplined, and we have to be for capital and expense,” Farley said. 

How much other automakers are losing on their EV lines is harder to determine, but like Ford, they are also rethinking their EV goals, so it’s likely they aren’t seeing good returns. 

Based on Harris’ past support of EV mandates, it’s unlikely that another Democratic administration will seek to roll them back. She may even make them tougher. Regardless of what EV mandate proponents want, the car consumer will ultimately determine what cars are on American roads. 

“The electric vehicle has always been a niche market product, not a mass market one,” Bryce said.