Renowned economist Stephen Moore warned on Monday that electric vehicles, like the Edsel, Ford's shortest lived and least reputable car in the 1950s, could become the "next major failure" in the automotive market.
During Trump's tenure in the United States from 2016 to 2020, Steve Moore was one of the President's economic advisors.
Moore said in a live television interview that day, "The Edsel, named after the son of Ford's founder, was once touted as a great car. All executives said, 'This is the car everyone wants to buy.' Ford also produced 500000 of these new sedans in one go, but guess what - no one asked consumers if they wanted this car
In history, Edsel was launched in 1958 but was soon announced to be discontinued. Edsel was initially positioned in the mid to high-end car market, with a more avant-garde design style that included many innovative elements of the time, such as vertical grille air intakes and curved taillights. However, due to insufficient market research and inadequate design, its sales were dismal.
Edsel is certainly one of the most failed products in the history of the automotive industry, and what I want to tell you right now is that if the current trend continues, we will see the electric vehicle market become the next major loser because car buyers do not want electric vehicles
At the time of Moore's remarks, both Ford and General Motors encountered resistance in promoting electric vehicles, leading to a significant decline in profits for both automakers and forcing them to reassess their electric vehicle plans in the latest price war and supply chain challenges.
Ford stated in its financial report released last week that its electric vehicle division's first quarter profit before interest and tax (EBIT) was a loss of $1.33 billion - after a loss of $1.08 billion in the previous quarter, the losses are further expanding. The company also stated that it will reduce production of the Mustang Mach-E and reduce its investment plan of approximately $12 billion in the electric vehicle sector, including delaying the establishment of a second battery factory in Kentucky.
Coincidentally, due to the impact of rising costs, General Motors' net profit in the third quarter decreased by more than 7% year-on-year. However, the company did not separately list the losses of its electric vehicle division, as Ford did. General Motors Chief Financial Officer Paul Jacobson stated that General Motors will abandon its mid-term goal of producing 400000 electric vehicles from 2022 to mid-2024 and instead focus on the blueprint of "producing 1 million electric vehicles by the end of 2025 while achieving profit margin targets".
Moore pointed out, "Considering the huge losses suffered by companies such as Ford due to their obsession with electric vehicles, this is a bad bet - I saw a statistical data this morning showing that Ford's losses per vehicle are around $40000 to $60000
American consumers do not buy it
This former Trump confidant further pointed out that in the face of significant losses for electric vehicle companies, the entire automotive industry may face difficulties.
In order to encourage people to purchase electric cars, the federal government has already provided various discounts. Basically, for every purchase of an electric car, the government will give you a subsidy of $7500. Don't forget, we are also subsidizing battery companies, "Moore pointed out.
He added, "However, the most surprising thing is that even with these sweet treats, Americans still say - I don't want them (electric cars). And taxpayers are paying for these things
Moore said that when talking to car dealerships across the United States, he found that their warehouses were "filled with electric vehicles," but now only 10% of customers are willing to purchase them.
Moore's suggestion is,& Quot; I think it's best for car companies to switch to hybrid vehicles, so they can use both gasoline and electric batteries simultaneously. But car companies did not produce such cars in large quantities. The reason why they do not produce is that the government is increasingly requiring all cars to be pure electric vehicles.
When former US President Trump won the election in 2016, Moore served as his campaign advisor and later helped draft Trump's tax plan. In 2019, Trump attempted to nominate Moore for the position of Federal Reserve Governor, but due to strong opposition, Moore ultimately decided to give up his bid for this position.