Tariffs and Timidity Are Driving US Carmakers into a Ditch

Faced with the greatest challenge of the 21st century, America is giving up.

Just 18 months ago, President Joe Biden was celebrating the passage of the Inflation Reduction Act or IRA, a $500 billion dollar law to revitalize the US economy and jump-start the transition to a zero-emission car and power sector.

“We are going to take the most aggressive action ever, ever, ever to confront the climate crisis and increase our energy security,” Biden said at the time. “American automobile companies and American labor are committing billions of dollars and a great deal of hard work and ingenuity to make electric vehicles and batteries.”

That spirit of can-do optimism feels a very distant memory right now.

Ford Motor Co. is reducing orders from battery suppliers as part of a plan to trim its spending on EVs by $12 billion, Bloomberg News reported Saturday. One unnamed person cited losses of $100,000 per car — a dubious, if much-repeated, figure. General Motors Co. has missed its electrification targets for two years running. A company that once aspired to produce one in every five cars globally shifted less than 76,000 EVs last year, equivalent to one in 200 of the 14 million sold worldwide.

Tesla Inc. is cutting 10% of its workforce and disbanding a Supercharger team that the whole industry is relying on to provide refueling options on the go. Its shares have slumped 32% year-to-date. First-quarter US EV sales rose just 2.6% from a year earlier, a far cry from the rates of 81% and 46% in the same periods of 2022 and 2023. Auto analysts cheer every move away from battery power.