Electric Cars = Edsels From the Government

Electric cars are failing again. This reminds me of another car failure. Back in the late 1950s, the Ford Motor Company wanted to catch up with GM and Chrysler, so they came up with a plan. According to Wikipedia:

“The Edsel was an automobile marque that was planned, developed, and manufactured by the Ford Motor Company during the 1958, 1959, and 1960 model years. The vehicle was planned as both a “new” product; and, product line for Ford, which would help Ford to make significant inroads into the market share of both General Motors and Chrysler; and thus, close the gap between GM and Ford in the domestic American automotive market, allowing Ford to share that market more equally. But contrary to Ford's internal plans and projections, the Edsel never gained popularity with contemporary American car buyers and sold poorly. The Ford Motor Company lost millions of dollars on the Edsel's development, manufacturing and marketing.”

The experts at Ford couldn’t predict the future—at least not every time they tried. However, they survived and moved on from this failure. They still had other car models to sell. But what if the government had decided that the Edsel was the car of the future and provided tax incentives, subsidize loans to get Ford, and the other manufacturers to make more Edsels?

The public’s distaste for the Edsel would have been a much bigger problem:

First of all, the taxpayers’ money would have been wasted. Either taxes or debt would have been devoted to a complete failure.

Second, resources that could have and would have gone into other investments—perhaps other types of vehicles that were more valued by the public—would have been redirected by the government’s incentives to be dumped into a failing venture. Other items that the public would actually want would never have been made because it was all diverted to the production of Edsels.

Government promotion of electric cars is just as stupid. Even aside from the fact that carbon dioxide is a natural part of earth’s life cycle, and not a pollutant, electric vehicles don’t help. The electricity still has to come from somewhere—and much of it still comes from fossil fuels. Furthermore, batteries are made out of minerals that are finite. By diverting these resources into ramped up production of electric cars the public does not want to buy, the government is increasing the price of other items that would use those same commodities.

It doesn’t even matter if we are nearing the day when oil or coal runs out. Just because we can guess that, at  some point in the future, we will no longer be able to use so-called “fossil fuels,” that doesn’t mean that we know when it is appropriate to switch to other forms of energy. If electric cars are still more expensive than conventional cars, then it is a waste of resources to choose electric cars. Private people can do what they want with their own money, but it is stupid public policy to manipulate car companies into making a car people don’t need yet.

This is all typical government arrogance. These people hate and fear the idea that free societies using market-determined prices can allocate resources efficiently without the guidance of “policymakers.” To allow thousands of people to make their own predictions about the future, and assume their own risks in how they invest on that basis, is a nightmare to people who “work in government.” No, they insist that we believe their version of the future, and that we as taxpayers assume all the risk.

That’s the government in the economy: putting your money where its mouth is.

Comments

comments

  • [email protected]

    Volkswagon has manufactured a car that gets 78 M.P.G but is banned for sale in the U.S .If our Government is so big on saving fuel then why ban them? Can you say conflict of interest? Gas tax? Our government for some time now has ceased to act in our best interest.. I think it is way past the time to take out the trash, it is beginning to stink!

    • Shermer

      When the VW story broke, all diesel passenger cars may have been ineligible for sale in the US (correct me if I'm wrong). Regardless, the primary factor was that it would not have been economically viable for VW, given the extra cost for the technology in a car that would compete against much less expensive rivals from other manufacturers.

  • CARLjr

    Many manufacturers make electric vehicles. Most of them have no connection with the US government.

    The "science" in this article is lacking. Exhaust from a combustion engine contains more than carbon dioxide. Besides somewhat benign compounds like nitrogen and water vapor, It also contains carbon monoxide, sulfur dioxide, nitrogen oxides, and particulate matter (soot). Carbon monoxide is regarded single cause of poisoning in both indusrty and the home. Diesel exhaust has been proven to be carcinogenic. (cancer causing).

    Electric cars are not entirely environmentally friendly. They do need electricity, but do not have exhaust. They use batteries that eventually must be replaced, and depending on their chemical make-up they are mostly recyclable. The big money today is not in oil - it is in next-gen batteries. MIT has some promising new battery research that could make all batteries refillable.

    All you need to see is current photos of downtown Beijing to see what a difference we have already made with our emission standards. We used to have smog like that in the 70's and 80's. When was the last time you heard a smog alert?