Iran Crisis Shows Why Automakers Are Wrong To Cancel EV Plans

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Interest in electric cars is surging, thanks to the braindead president of the Untied States and the sycophants who surround him. The Guardian reports that online searches for electric cars have increased by 20 percent since the attack on Iran started three weeks ago. That’s according to CarEdge, a car buying platform. In Europe, German car dealer MeinAuto said EV-related online traffic had jumped by 40 percent since the war broke out.

“You saw that within 48 hours of the war starting a spike started – it is directly connected to that news,” said Justin Fischer, an automotive analyst at CarEdge. “If we see these higher gas pries dragging on for a month or more, we will see bigger and bigger numbers.”

The rise in gas prices is “at the forefront of buyers’ minds right now. They are thinking about how do they avoid these fluctuations,” said Jessica Caldwell, head of insights at Edmunds. It also has recorded a marked increase in the number of online searches about EVs by people looking for a new or used car.

“Gas isn’t something you can hide from, it’s right in your face, you see the cost as you fill up each time,” Caldwell said. “It’s a conversational point for a lot of people, too. I live in Los Angeles and there are a lot of memes being sent around by EV drivers on how they are happily watching other people being worried about the gas price right now.”

On a more personal note, family members and neighbors who previously thought my wife and I were rather odd for driving an electric car are now texting and emailing with questions about buying one themselves. Strange days, indeed.

Short Term Thinking On Long Term Issues

Most CleanTechnica readers are aware that many major automakers, from Ford to Stellantis, from Volkswagen to GM, have taken multi-billion-dollar writedowns on their balance sheets as they have retreated from developing and manufacturing electric vehicles. They claim they miscalculated the number of buyers there would be when they started developing electric cars, but their business plans assumed the price of gasoline would remain relatively constant.

Now that the price at the pump is $4.00 per gallon or more (I saw diesel at $5.65 a gallon today), suddenly everything has changed. For years, CleanTechnica has argued the price of gas in the US is artificially low because of the enormous hidden subsidies the government provides. Economists call them “untaxed externalities,” meaning the people responsible for them are able to pass them off onto others to pay. That would be you and me.

The general public is not aware of those hidden subsidies. All they know is that the price of gas today used to be about the same as it was in the early ’60s, relatively speaking. Back then, you tool around in your mother’s Chevy convertible all day and bring it back with the gas gauge reading higher than it did when you left the driveway because you put two bucks worth of regular in the tank on your way home. Those were the days, my friends. We thought they’d never end. We’d sing and drive forever and a day.

Shifting Priorities

The problem for Western manufacturers is that their political masters vacillate constantly. One year, they want to ban gasoline powered cars by 2035. The next year, they want to roll back emissions and fuel economy standards to where they were when JFK was in office.

Uwe Hochgeschurtz, a former chief operating officer for Stellantis in Europe, told The Guardian this week that mixed messages from the EU were holding carmakers back and forcing them to keep all the complexity of multiple power sources.

“They try to invest on both sides,” he said. “It’s very costly, but that is their life insurance. China decided decades ago to go electric. The US has decided to go full gasoline with the latest administration. Europe has no direction. If you want to lose the car industry, go ahead with the confusion.”

Andy Palmer, a former chief executive of Aston Martin and executive at Nissan who helped launch the LEAF, told The Guardian, “The worst possible response [from the Europeans] is to blink, slow investment, and hope the market somehow resets in their favor. It won’t. Chinese carmakers have moved early, built real capability in batteries and software, and are scaling fast. If Europe hesitates now, it will hand rivals a structural advantage that becomes harder and harder to reverse.”

European automakers are “having a hard time,” said Julia Poliscanova, the director for EVs for Transport & Environment. “They have tariffs in the US, they are nowhere in China, so they are thinking, ‘Maybe at least in Europe, we can have a few years where we prioritize short term profits selling petrol and diesel cars.’ That is probably a valid business view if your term as a CEO finishes in two years,” she added. “That is a stupid view if you still want to be in the car market in 2035.” Tell it like it is, Julia!

Carlos Tavares, the former CEO of Stellantis, added his own thoughts. “The only fundamental question for carmakers is how to curb emissions significantly. Those who believe that EVs are not the solution have to explain the ‘how’ without EVs.”

Pascal Canfin, a member of the European Parliament who was one of the architects of the 2035 ban and also chaired the EU’s environment committee until 2024, told The Guardian that attempting to blame politicians was “a scapegoating exercise. Automakers are losing the technological battle with China.” He said manufacturers had been “lobbying for this for months” before the ban was watered down. “They are creating themselves the instability, the uncertainty that could jeopardize the whole business model again.”

In Britain, carmakers also want ministers to weaken plans to make all new cars zero emission by 2035. “Other major markets have responded and we should do too,” said Mike Hawes, the head of the Society of Motor Manufacturers and Traders (SMMT), an industry lobby group. “The EU has crossed the Rubicon.”

A Volkswagen spokesperson said the group was “clearly in favor of electric mobility” and had invested heavily in it. “However, this requires a reliable, long term, and binding political framework. The ball is now in the politicians’ court to create the necessary framework conditions to make electromobility a success.”

The Blame Game

Did you notice there is a lot of finger pointing going on here? The politicians blame the companies. The companies blame the politicians. All the while, the Chinese manufacturers are licking their lips like a cat eyeing a bowl of sweet cream.

Lost in all of this is the news this week that the planet is warming faster than ever. Alarm bells and flashing red lights are going off all around us and all anyone in the business community can think about is how much money there is to be made in AI and building gargantuan gasmobiles for the rest of this century and possibly the one to follow.

Most denizens of Earth are good, hard working, kindhearted people who want little more than a family and a home with enough money to eat regularly. Yet they insist on electing leaders who start wars and spend their nation’s resources on weaponry. Everyone is suddenly moaning about the high cost of gasoline, but no one seems to care a flying fig leaf about El Nino and the onrushing climate catastrophe that will soon overwhelm us all.

If there is a common thread in all this, it is the harm done by the yo-yo effect of constantly ripping up policy initiatives and replacing them with new ones that favor industry instead of society. The Chinese will rule the world not because they are smarter or more handsome, but because they make rational plans and stick to them. Countries that cannot make long-term plans and follow them will be the losers, which suggests the US will be the biggest loser of all.