The Scene
With Donald Trump gaining in US presidential polls and oil interests pushing a false narrative around electric vehicle sales, the politics of EVs has never been so complex, according to General Motors board member and former Tesla president Jon McNeill.
He blamed companies like Koch Industries for using temporary market dynamics to orchestrate PR campaigns about consumer interest waning in electric vehicles. The US Inflation Reduction Act reduced the number of cars eligible for a $7,500 federal tax credit, while GM’s Chevrolet Bolt and Tesla’s Model 3 were both caught in a transition to new models, which caused a temporary blip in sales.
“What we’ve been reading about are short-term dynamics, but they’re being twisted for political purposes by people that have business interests in fossil fuels,” McNeill told Semafor.
Meanwhile, some core US customers of leading EV company Tesla, well-to-do liberals, have been alienated by the public statements of its CEO and Trump ally, Elon Musk. At the same time, would-be customers in Republican-dominated states, many of whom are fans of Musk’s politics, have disdained electric vehicles as part of a conservative backlash.
Tesla, a company McNeill once helped lead, does face a political puzzle, he said. Sales are slowing in the Democratic areas that once accounted for 80% of its business. They are rising in Republican zip codes, but not fast enough.
“It gets really hard to keep both sides of the political spectrum happy when you’re actively participating in the politicization of the product,” he said.
That problem, like others facing EVs, could be temporary. “I’ve learned, like a lot of others, don’t bet against Elon because he’s got a will to succeed that is unlike any I’ve seen,” McNeill said.
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US electric vehicle sales growth slowed to 3.3% in the first quarter of this year, while headlines like “Ford stops 2024 F-150 Lightning shipments as hundreds of pickups pile up” made it appear as if the EV ride was about to end.
Fast-forward to summer and electric cars are seeing record sales, Tesla’s stock is back up, and the outlook is good.
But if Republicans sweep the November elections, they may look for ways to slow down EV growth. The Washington Post reported that Trump asked for $1 billion in campaign donations from oil executives, in exchange for rolling back the Biden administration’s environmental rules and policies, including those relating to electric vehicles.
But McNeill compared Trump’s promises to middle school election campaigns. “You say everybody’s going to get free ice cream to try to get their vote, but you never really have to deliver on that once you’re the middle school class president,” he said.
And the transition to electric vehicles is inevitable, McNeill said. The question is only how fast that will happen. “We’d be Betamax when everybody else is VHS,” he said. “I can speak for GM. We are selling every EV we can make.”
Reed’s view
The genius of Musk was making a high-end electric sports car when most people thought of them as poor substitutes for gas power.
His cars became luxury items and changed the game. Many people wouldn’t buy EVs to save the environment; they’d buy them because they’re superior products.
The problem is that EVs have remained extremely expensive, even with recent price dips that have brought them into the realm of possibility for ordinary Americans.
Buyers with a lot of cash or access to credit often prefer an EV from a premium company like Tesla or Rivian and will even pay a premium over gas-powered cars to buy them, making subsidies less relevant.
There are currently income limits for EV tax credits. But the price of the car might be a better measure if we want to increase EV adoption. Even with a $7,500 tax credit, a $100,000 car is expensive. Reserving those funds for purchasing less expensive cars for Main Street Americans would be more effective. Most people don’t need an EV with 400 miles of range. They need something that can make at most a 30-mile journey to work. Roughly 80% of car trips in the US are less than 10 miles and nearly all of them are less than 100 miles.
EVs, which require less maintenance and no gas money, could be a more economical alternative for people who struggle to access reliable transportation. Trump could promote the “working class EV,” a populist idea that might even resonate with many Republican voters.
Room for Disagreement
Jason Isaac, a senior fellow at the oil-industry-funded Texas Public Policy Foundation, argues in The Hill that consumers prefer gas-powered cars to EVs, and the costs of subsidies outweigh the benefits.
“Electric cars are inferior products. They are also bad for the environment and damaging to the economy in hidden ways that their biggest cheerleaders have not been honest about,” he wrote.