The era of the electric vehicle (EV) may finally be coming to an end. EVs were propped up starting nearly two decades ago, first with subsidies and then with mandates. Automakers who made gasoline cars had to pay penalties if they didn’t sell enough EVs, and sometimes those penalties had to be paid to their EV competitors. It was a way to lower prices on EVs below the free-market price, and the opposite for gasoline cars, thereby artificially increasing sales of EVs at the expense of making gasoline cars more expensive.
As a result of EV subsidies, EV mandates and penalties on gasoline cars, EVs have grown in the US market from less than 1% of sales before 2011 to 9% in 2024. Consumers were presented with heavily subsidized EVs (a $75,000 EV might have been selling for barely $30,000 net of incentives) and more expensive gasoline cars to finance the EV mandate (a $20,000 gasoline car may have been selling for $35,000).
This kind of heavily skewed pricing is what induced consumers to buy EVs to the tune of 9% rather than 1% a dozen years prior. What happens when this pricing reverses? Obviously EV sales will decline dramatically, perhaps down to 1% or less.
Is he right or WAY off?
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