Chattanooga Times Free Press

MULTI-CAR PILEUP: EVS VS. REALITY

In the economy’s electric-vehicle sector, and in other climate-related matters, dreamy aspirations are encountering sobering trade-offs. Governments are learning hard lessons about the unintended consequences of policies oblivious about society’s complexities.

Economic stagnation has the European Union tiptoeing away from its mandate that new cars and vans be emissionfree by 2035. “Self-destructive,” says Prime Minister Giorgia Meloni of Italy, where slack demand for electric vehicles caused Fiat to close its Turin plant for a month last autumn.

The notion that the EVs involve “zero emissions” has lost its luster because hydrocarbons will generate much electricity for decades, and rare-earth minerals for EVs are dug by nonelectric machines from dirty mines. By one estimate, given Europe’s current energy mix, an EV would have to be driven 43,000 miles before its lack of emissions compensated for the carbon footprint produced by manufacturing its battery.

Sweden’s Volvo, the first traditional carmaker to promise a complete switch to electric vehicles — by 2030 — has unpromised. Germany’s auto industry, formerly the humming engine of Europe’s largest economy, is sputtering. In what the Financial Times calls Volkswagen’s “retreat from EVs,” the company has jettisoned its aim to cut its vehicles’ carbon dioxide emissions 30% between 2015 and 2025 (a.k.a., today). BMW, which has been notably cautious about EVs, now (Financial Times, Feb. 10) “bets on petrol cars.” Et tu, Porsche? Indeed. Financial Times Feb. 7: “Porsche overhauls line-up to bring back combustion engines.” This is an expensive ($837 million) backtrack.

Donald Trump has rescinded Joe Biden’s executive order calling for 50% of new vehicles sold in 2030 to not have internal combustion engines. Some progressives who during the 2024 political season heatedly denied the existence of an EV mandate now heatedly denounce the Trump administration for slaying it. That is, for unraveling the Environmental Protection Agency’s stringent emission requirements that would have forced automakers to shift to EVs, consumer preferences be damned.

Mark P. Mills, writing in the Manhattan Institute’s City Journal, notes a Stanford study finding that in the past four years, in America’s 10 largest cities, there has been a 32% increase in the number of people commuting more than 75 miles a day, and an 18% increase in those commuting 50 to 74 miles. Cars, says Mills, “are more, not less, popular in our modern culture” because they make otherwise impractical mobility possible “for a growing number of workers.” And the gig economy, enabled by “the energy-hungry cloud,” fuels demand for cars, 98% of which currently in service have internal combustion engines.

Regardless of the EV component of the global vehicle fleet, total global greenhouse gas emissions will continue to increase. Even BP, a notoriously slow learner, understands this. Several CEOs ago, during peak climate posturing, BP said its initials would henceforth signal “beyond petroleum.” But dismal earnings and irritated investors produced an epiphany. The company has announced a “fundamental reset,” meaning less spending on low-emission technologies (wind, hydrogen) and more on oil and gas.

The Wall Street Journal reports that almost one-third of all vehicles sold in the United States at prices below $30,000 are built in Mexico. About 70% of the 4 million vehicles assembled at the more than 20 Mexican factories are shipped to the United States. Trump, populist tribune of the downtrodden, favors 25% tariffs to make these cars significantly more expensive — the free-trade agreement he negotiated be damned.

Americans are keeping their cars longer, paying less on repair bills than they would on monthly new-car payments — particularly as higher interest rates, a result of government-caused inflation, have increased the cost of car loans. Steel and aluminum tariffs will increase new-car prices, and Trump’s tariffs will raise the prices of imported auto parts.

The Wall Street Journal reports, counterintuitively, that “car-insurance prices are particularly sensitive to tariffs.” Those prices reflect the cost of repairing cars, and six out of 10 replacement parts are imported from Mexico, Canada and China. An insurance industry trade association estimates a potential increase of “well over $7 billion” in the costs of claims.

On both sides of the Atlantic, governments are learning the costs of virtue-signaling policies adopted without cost-benefit analyses. Governmental fiddling with complex economic processes is often injurious to many people, but always is instructive. If more people understood the ways supposed “climate change mitigation measures,” and tariffs, can carom in unexpected ways, with unintended consequences, advocates of such measures and tariffs might reduce their verbal emissions.

OPINION

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2025-02-27T08:00:00.0000000Z

2025-02-27T08:00:00.0000000Z

https://edition.timesfreepress.com/article/281835764444327

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