Todd Buchholz, Renowned Economist, and Award-Winning/Best-Selling Author, Says EV Envy Is Fading Fast

Todd Buchholz

LOS ANGELES, UNITED STATES, January 25, 2024 / — Todd Buchholz, renowned economist, former White House advisor, and best-selling author, says EV envy is fading fast. In his insightful Op-Ed published in Project Syndicate, Buchholz details the downward shift in demand for electric vehicles.

In the early 1990s, every self-respecting American yuppie and every retired couple in the ‘burbs bought an electric bread machine, with sales hitting four million units, Buchholz informs. Then, these amateur bakers learned that stuffing a precise measure of flour, eggs, butter, yeast, and salt into a metal box took time and cost much more than strolling to the corner baker. The fad faded. Are plug-in electric vehicles the breadmakers of our day? Buchholz questions.

Despite the brilliance of Elon Musk and the billions of dollars of government subsidies, it appears that consumers would rather drive to a gas station for a five-minute fill-up than retrofit their garage and suffer the range-anxiety that comes from hunting for a charging plug in the parking lot of an abandoned shopping mall. J.D. Power reports that 21% of public charging hookups do not work anyway. As consumers shy away from EVs, their choice will impact not just the car industry but U.S.-China relations, state budgets, and commodity prices, explains Buchholz.

The evidence is rolling in faster than a Tesla can take off from the starting line. Last week, Hertz — with great fanfare in 2021, purchased 100,000 Teslas — performed a squealing 180-degree turn and began dumping one-third of its Tesla fleet while taking a $245 million charge against earnings. Hertz’s pledge to buy 175,000 EVs from GM will likely go up in smoke, too. Outside of wealthy, wokish communities, consumers are walking past plug-in EVs and instead snapping up hybrids and gasoline-powered engines, Buchholz notes.

In the fourth quarter of 2023, EV sales crawled up by just 1.3%. According to Autoweek, EVs sit on dealer lots about two weeks longer than gasoline-powered cars. A Mercedes Benz EQS languishes for four months, inspiring the company’s chief financial officer to call EVs a “pretty brutal space.” Customers are staying away despite a price war in which Ford, Tesla, and GM slashed prices an average of 20%, leading Ford to lose $36,000 on each car sold. At the same time, state governments have been pumping EVs with enormous subsidies while their own budgets are bleeding red. California still pours $7,000 into new EVs (on top of the maximum $7,500 federal credit) despite reporting a record $68 billion budget deficit. New Jersey sends a $4,000 check to EV buyers despite shrinking revenues. Can these states keep the money spigot open? Buchholz asks.

EV doubters like Toyota, which instead bet on hybrids, are looking smarter, with Toyota’s share price outperforming GM’s by 40% over the past year. After taking flak from enthusiasts and Wall Street analysts, Toyota chair Akio Toyoda declared that people are “finally seeing reality.” Automobile unions surely feel relief since EVs require 90% fewer parts and 30% fewer manhours, informs Buchholz.

“None of this diminishes the brilliance of EV engineers and designers. Watching smart cars race and then parallel park themselves, it’s hard to believe they were once dismissed as golf carts with hood ornaments. Elon Musk has been called many things, some of them unprintable. But his cars outrun Porsches, his rockets soar past NASA, and his close calls with insider trading leave Securities and Exchange Commission lawyers in the dust. But that does not mean that he always wins,” states Buchholz.

EVs face obstacles even beyond physics and consumer inertia, namely, a faulty electrical grid. Simply put, more people are spending more hours sitting in the dark. The U.S. Energy Information Administration reports that between 2013 and 2021, the average duration of a blackout jumped from 3.5 hours to 7 hours, and the frequency jumped by nearly 20 percent. No surprise that many people are reluctant to tie their mobility to a wall plug. The hurry-up pace of solar and wind deployment, vulnerable to clouds and stagnant air, has not inspired feelings of reliability, explains Buchholz.

Buchholz says, “The U.S. is not alone, of course, in the EV race. China’s BYD (“Build Your Dreams”) recently earned headlines for surpassing Tesla by selling 3 million vehicles last year, compared to Tesla’s 1.8 million. Nonetheless, the wobbly Chinese economy is vulnerable to a downswing in U.S. sales. The Chinese government and private sector have bet trillions on battery production and on nations like Zimbabwe, the Congo, Cuba, and Russia, which mine lithium, cobalt, cadmium, and other rare earth materials. Will China continue to buy off African political leaders as these commodity prices slump? How long will that spigot stay open?”

In the 1990s, the bread machine fad never got government subsidies, nor did it benefit from government mandates or furious discounting to gain market share. If it did, perhaps the craze would’ve continued for a few more years. EVs have been promoted by presidents, governors, the IRS, and tech wizards. But somehow, the public isn’t listening. President Eisenhower, who looked great in a 60-horsepower jeep, warned, “You don’t lead by hitting people over the head: that’s assault, not leadership.” In the automobile market, the public and the internal combustion engine are still in the lead, Buchholz concludes.

Todd has shared the spotlight with notable figures like Colin Powell, Michael Porter, and Jeff Bezos. He is a sought-after guide for corporate and political leaders globally, offering insights to entities ranging from the U.K. and New Zealand parliaments to the Mexican and Abu Dhabi stock exchanges and tech and entertainment firms in Seoul.

Buchholz is available for media interviews.

To find out more about Todd Buchholz or to book him for an event, click here:

Amanda Kent
Boundless Media USA
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