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Continuing EV Bloodbath Leaves Harris With A Lot To Answer For

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From the Daily Caller News Foundation

By DAVID BLACKMON

 

Once the ongoing effort by the legacy media to reinvent presumptive Democratic nominee Kamala Harris as a dynamic leader and competent campaigner passes, we will presumably enter the part of the presidential race in which we actually examine her real record on the key issues.

When — or if — that time ever arrives, the vice president will have a lot to explain where energy policy is concerned.

Last week I provided a high-level overview of some of the radical policies Harris has supported over her time in office in California and Washington, D.C. Today, I will address Harris’s advocacy for electric vehicles and buses, and the expanding bloodbath it has helped to create.

Let’s begin with a speech Harris delivered in Brandywine, Maryland on December 13, 2021. There, Harris spoke to an audience including Energy Secretary Jennifer Granholm, assorted Maryland officeholders, and workers at the Brandywine Highway Maintenance Facility. As part of her remarks, the vice president delivered a ringing endorsement of electric vehicles and her administration’s plans to try to subsidize them into automotive market dominance.

“The pollution from vehicles powered by fossil fuels has long harmed the health of communities around our country,” Harris said. “But there is a solution to this problem, and it is parked right behind me … electric cars, trucks, and buses — they don’t produce tailpipe emissions that irritate the nose and eyes, that decrease lung function, that increase susceptibility to respiratory illness.”

Harris added: “That means manufacturing millions of electric cars, trucks, and buses right here in our country. That means outfitting thousands of EV — electric vehicle — repair garages, just like this one. And it means installing a national network of EV chargers.”

That speech took place after congress had enacted the 2021 Infrastructure Investment and Jobs Act containing more than $200 billion in clean energy subsidies. Congress passed the Orwellian-named Inflation Reduction Act and its $369 billion in similar subsidies eight months later.

How has all that worked out for America three years down the road? As I pointed out a few weeks ago, every pure play EV maker in the U.S. is now either in bankruptcy or teetering on the brink. Ford reported last week that its EV division, Ford Model e, lost about $50,000 per unit sold during the second quarter, and that was the best quarterly result the company has reported in over a year. Even Tesla has started the year with a pair of disappointing quarterly results amid rapidly slowing consumer demand for electric vehicles.

The Biden-Harris dreams of subsidizing a national fleet of high-speed EV chargers into existence has also come up a crapper. The Washington Post and others reported in April that Granholm’s Energy Department has invested a whopping $7.5 billion to install 5,000 such charging stations around the country but had only managed to activate 7 to that point.

Harris also endorsed a $5 billion EPA-managed program included in the Infrastructure law to fund the adoption of battery electric buses for targeted school systems around the country. Thus far, EPA has released two tranches of federal grants totaling $1.9 billion, but to disappointing results. Of the 389 school districts targeted by the grants, just 23 have reported successful acquisition of a total of 60 buses that have been placed into service. But another 50 of those districts have since withdrawn from consideration by the program.

“EPA anticipates that transitioning to new technology school buses will take time, which is why the project period is two years with an option to extend where needed and justified,” said EPA spokeswoman Shayla Powell.

Oh.

IRA subsidies for EV city buses have created perhaps the worst set of boondoggles of all. The electric buses are so costly, require such high maintenance and have such limited charging ranges that even extremely liberal cities like Austin, Texas  and Jackson, Wyoming have quit trying to change over their fleets. The 2023 bankruptcy of heavily subsidized Proterra, the biggest EV bus maker, hasn’t helped.

It is hard to identify any aspect of the Biden-Harris suite of EV-related policies that can honestly be called a success. As her party’s apparent nominee, Harris will have much to answer for — that is, if the media ever gets around to asking the relevant questions.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

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Nissan, Honda scrap $60B merger talks amid growing tensions

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MxM News

Quick Hit:

Nissan is reportedly abandoning merger talks with Honda, scrapping a $60 billion deal that would have created the world’s third-largest automaker. The collapse raises questions about Nissan’s turnaround strategy as it faces challenges from electric vehicle competitors and potential U.S. tariffs.

Key Details:

  • Nissan shares dropped over 4% following the news, while Honda’s stock surged more than 8%, signaling investor relief.
  • Honda reportedly proposed making Nissan a subsidiary, a move Nissan rejected as it was initially framed as a merger of equals.
  • Nissan is struggling with financial challenges and the transition to EVs, still reeling from the 2018 scandal involving former chairman Carlos Ghosn.

Diving Deeper:

Merger talks between Nissan and Honda have collapsed, according to sources, after months of negotiations to form an auto giant capable of competing with Chinese EV makers like BYD. The proposed deal, valued at over $60 billion, would have created the world’s third-largest automaker. However, differences in strategy and control ultimately derailed the discussions.

Reports indicate that Honda, Japan’s second-largest automaker, wanted Nissan to become a subsidiary rather than an equal merger partner. Nissan balked at the idea, leading to the collapse of negotiations. Honda’s market valuation of approximately $51.9 billion dwarfs Nissan’s, which may have fueled concerns about control. The failure of talks sent Nissan’s stock tumbling more than 4% in Tokyo, while Honda’s shares rose over 8%, reflecting investor confidence in Honda’s independent strategy.

Nissan, already in the midst of a turnaround plan involving 9,000 job cuts and a 20% reduction in global capacity, now faces mounting pressure to restructure on its own. Analysts warn that the failed merger raises uncertainty about Nissan’s ability to compete in an industry rapidly shifting toward EVs. “Investors may get concerned about Nissan’s future [and] turnaround,” Morningstar analyst Vincent Sun said.

Complicating matters further, Nissan faces heightened risks from U.S. tariffs under President Donald Trump’s trade policies. Potential tariffs on vehicles manufactured in Mexico could hit Nissan harder than competitors like Honda and Toyota. The stalled deal also impacts Nissan’s existing alliance with Renault, which had expressed openness to the merger. Renault holds a 36% stake in Nissan, including 18.7% through a French trust.

While both Nissan and Honda have stated they will finalize a direction by mid-February, the collapse of this deal signals deep divisions in Japan’s auto industry. With Nissan’s financial struggles and the growing dominance of Chinese EV makers, the company must now navigate an increasingly challenging market without external support.

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The Northvolt Crash and What it Says About the State of the Electric Vehicle Market

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From Energy Now

By Jim Warren

Northvolt, a wannabe electric vehicle (EV) battery manufacturing superstar, based in Sweden filed for Chapter 11 bankruptcy protection in the US on November 21, 2024. In just eight years the company had blown through $15 billion USD in startup capital. Bloomberg says it was one of the most indebted companies to file for bankruptcy in the US in 2024.

Northvolt promised to be everything green transition crusaders could hope for in a company. And it isn’t surprising the “whiz kids” in the Prime Minister’s Office and the environment ministry made sure Canada got in on the action. According to Bloomberg, Canada made pledges amounting to $7.3 billion CAD ($5.4 billion USD) in loans, equity stakes and subsidies for Northvolt.

Canada’s investments included support for the construction of four electric vehicle (EV) battery factories—one in B.C., two in Ontario and one in Quebec. As of today, only a cockeyed optimist could believe those four plants will be churning out batteries any time soon, if ever.

Unfortunately, the Northvolt investment represents just 14% of money the federal government has bet on the future of EVs and electric batteries. According to Canada’s Parliamentary Budget Officer (PBO), since 2020 the federal government has invested $52.5 billion in various projects throughout the EV supply chain.

Northvolt was supposed to be a cutting-edge EV battery innovator. It had the cachet of companies claiming to be implementing next-generation technology. When the company was launched in 2016 it was hailed as Europe’s flagship entry into the international race to produce enough non-Chinese batteries to support a widely anticipated boom in electric vehicle demand in Europe and North America.

For eight years Northvolt rode the wave of green propaganda that accompanied government regulations phasing out the production of vehicles with internal combustion engines. The company further endeared itself with environmentalists by claiming it would be at the forefront of development for the mammoth batteries required to back up solar and wind power generation.

The Economist reports that prominent Wall Street players like BlackRock, Goldman Sachs and JPMorgan Chase ditched any aversion they might have had for getting into business with governments. They contributed to the $15 billion in startup money. Governments got on the Northvolt band wagon. Northvolt received $5 billion USD in grants from five countries:  Canada, the European Union (EU), Poland, Germany and of course Sweden.

Private investors weren’t deterred by the fact governments had “picked a winner.” They actually liked the fact governments were backing Northvolt. They assumed the governments of wealthy countries dedicated to Net Zero by 2050, would patiently nurse Northvolt through its growing pains and back it financially when setbacks arose. Risks would be minimized—success was as close to guaranteed as anyone could hope to expect.

Governments in Europe as well as Canada had been busy implementing policies designed to reduce CO2 emissions and combat climate change. Building EV batteries dovetailed nicely with those goals. It was a virtuous circle of mutually reinforcing virtue signaling.

Around the same time it was becoming fashionable for businesses to adopt the principles of Environmental, Social and Governance (ESG). “Progressive” investors including union pension funds required companies they invested in to adopt the goals of environmental sustainability, diversity, equity and inclusion—the core missions of ESG.

Some of Europe’s car makers got behind Northvolt. They wanted to see a vertically integrated European EV industry developed to better withstand competition from cheaper Chinese imports. VW, BMW and Scania AB pre-ordered $50 billon USD worth of Northvolt’s products.

By the fall of 2024, Northvolt already had at least one foot planted on a banana peel. But that didn’t prevent 24 lenders including JPMorgan Chase from throwing it a $5 billion USD lifeline. According to The Economist, this was the biggest “green loan,” ever made in Europe. It apparently wasn’t big enough to prevent the company from filing for Chapter 11 protection.

Odd as it seems in hindsight, private sector investors had embraced a project led by politicians, bureaucrats and research scientists with little to no experience in commercializing their lab experiments. The company’s inability to meet the technical challenges of increasing production to the point of commercial viability was one of the reasons it failed. It turns out it is hard to transform next-generation technology from ideas that work in a test tube into something that makes money.

Ironically, it is car makers from China who are best placed to capitalize on Northvolt’s downfall and dominate Europe’s EV and battery markets. Without tariff support European and North American automakers simply won’t be able to compete with the less expensive government-subsidized Chinese made models.

In 2015 the Chinese government launched its ambitious “Made in China 2025” project. Under the program the government has plowed hundreds of billions into industries that combine digital technology and low emissions technologies. The EV sector was one of the program’s big success stories. Last year, BYD a Chinese manufacturer, overtook Tesla to become the world’s biggest EV producer.

This past November The Economist reported, Chinese auto makers already account for two-thirds of global EV production. They had sold 10 million of them in the previous year. Chinese manufacturers also made 70% of the EV batteries produced globally in 2024. Big investments in factory automation in Chinese EV plants have increased per worker productivity, reducing manufacturing costs.

Government subsidies combined with manufacturing know-how succeeded in creating the world’s most significant EV and EV battery manufacturing industries in China but similar efforts in Europe and North America (e.g. Northvolt) are struggling. It is embarrassing to realize China has become the world’s largest manufacturer and exporter. The West has been left in the dust when it comes to making things like solar panels and EVs.

Europe’s car makers are pressing their governments to limit the number of Chinese made EVs sold in Europe. Yet some EU member states like Germany are reluctant to antagonize China by putting tariffs on its EVs—many German manufacturers rely on access to the Chinese market.

EV sales declined by 5% across Europe in 2024 and high prices for European models are one of the factors responsible for declining sales. Allowing cheaper Chinese EVs into Europe tariff-free should improve EV sales making it more likely that governments’ emissions targets are met. But that makes it more likely that some European car makers will struggle to remain profitable. If large numbers of auto workers are laid off in Europe it will signify the breaking of a major promise made by environmentalists and governments. They have consistently assured people the green transition would create more than enough new green jobs, to make up for job losses in high emissions industries.

The bad news for EV champions extends beyond Europe. Donald Trump has signed an executive order killing federal grants to consumers purchasing electric vehicles. Getting rid of the Biden administration’s EV subsidies should give internal combustion engines a new lease on life. You have to wonder how Trump squared that move with Elon Musk. Perhaps Trump’s promise of tariffs on Chinese goods has been enough to satisfy Tesla. It helps that many EV purchasers in the US prefer big luxury models since the Chinese don’t make too many electric Hummers.

Here in Canada, the Liberal government has said it will cease subsidizing EV purchases as of March 31. It looks more and more like the wheels are coming off the Trudeau-Guilbeault environmental legacy.

While the EV markets in Europe and North America are on shaky ground it is unlikely Northvolt will find the investors required for another last minute bailout. That’s good news for people concerned about Canada’s fiscal health–the Liberals won’t be able to blow any more money on Northvolt if it doesn’t exist.

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