Green jobs do not come cheap, particularly when the Biden administration is funding them through tax dollars. According to Robert Bryce, under the Inflation Reduction Act which incentivizes the production of electric vehicles among other green technologies, each new “green” job at the GM’s battery plant (which the company is developing with Korea’s LG) in Spring Hill, Tennessee will cost taxpayers $7.7 million and each new “green” job at the Ford plant (which Ford is partnering in with China’s CATL) in Marshall, Michigan will cost $3.4 million. The two new factories will create a total of about 4,200 new jobs, which will cost federal and state taxpayers nearly $22 billion. Another plant, being built in Jeffersonville, Ohio by LG and Honda, will create 2,200 jobs, which will cost U.S. taxpayers $4.3 million each. Further, the average wage at the factories will be about $46,000 per year or about $22 per hour, which is far less than the wages paid to top union members who work at GM’s engine and transmission plants who earn about $31 per hour.
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Fast Facts
- Robert Bryce reports that taxpayers are paying between $3.4 million and $7.7 million per green job associated with manufacturing electric vehicles, and average wages are significantly less than at gas and diesel car manufacturing plants.
- The auto union is beginning to object as the full impact of government policies on EVs are felt.
- Losses at manufacturers are also growing, with Ford admitting it is losing over $66,000 per EV.
- Electric vehicles sit unsold at car dealers despite EV sales increasing to 6.5 percent of the new car market.
- Biden’s tailpipe emission rule will force Americans to buy EVs, whether they want them or can afford them due to Biden’s climate policies.
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The Inflation Reduction Act, the legislation that passed in the Senate by a single vote cast by Vice President Kamala Harris and signed into law by President Biden last year, contains climate provisions that could cost taxpayers $1.2 trillion by 2040 according to the Brookings Institution–more than three times the estimates that were published by the federal government last year. In reality, the Biden administration is using government power to increase the profits of big corporations at the expense of consumers in the name of climate change. The Inflation Reduction Act is the biggest corporate giveaway in American history and a gift to big business, including foreign companies like LG, Honda, and China’s battery maker, CATL, which is partnering with Ford on the Michigan battery plant. The big automakers will get tens of billions of dollars in subsidies to make electric vehicles and those subsidies are coming at the expense of workers and taxpayers.
The Biden Administration has repeatedly promised to create “good-paying union jobs.” But, the federal tax credit known as 45X has no job quality requirements for permanent jobs and does not mandate companies to pay market-based wages or benefits. The United Auto Workers, one of the biggest and most powerful unions in the country, will soon be renegotiating its contact with the auto companies and is refusing to endorse Biden in the 2024 election due to his support for non-union EV plants. Last month, after the Department of Energy announced it would give Ford a $9.2 billion low-interest loan to build additional battery factories, two in Kentucky and one in Tennessee, Shawn Fain, the president of the UAW, issued a statement slamming the Biden administration.
EV Sales are Growing, But Not Enough
Electric Vehicles currently account for about 6.5 percent of new car sales and they are growing. But on July 10, Axios reported that the nationwide supply of electric vehicles in stock increased nearly 350 percent this year, to more than 92,000 units, which is a 92-day supply or about three months’ worth of electric vehicles–almost twice the industry average. Dealers have about 54 days’ worth of gasoline-powered vehicles in inventory.
Ford is losing big on its EV sales. The company reported a $722 million loss on its EV business over the first three months of 2023 in which it sold 10,866 electric vehicles, losing $66,446 for every electric vehicle it sold. Ford expects to lose $3 billion on its EV business this year. Its flagship sedan, the Mustang Mach-E, is piling up on dealer lots. Second-quarter sales of the model fell by 21 percent compared to last year. Ford plans to spend $50 billion on electric vehicles and it is planning to produce 600,000 of them this year.
The prices on Ford’s Mach-E and Lightning show that electric vehicles are still luxury items that are priced for the Benz and Beemer crowd. The average EV buyer has an annual income of about $150,000–twice the U.S. average. The average price of an electric vehicle is around $64,000, compared to the average price of traditional cars at $48,000. Forcing the market to build electric vehicles that are not in high demand inflates the costs of traditional cars as companies must cover costs. As a result, more Americans are driving older cars longer. The average age of vehicles is now 12.5 years and getting longer.
A J.D. Power report released in May says that while EV market share has grown “many new vehicle shoppers are becoming more adamant about their decision to not consider an EV for their next purchase.” Ford and GM are trying to sell expensive luxury cars into a market where consumers are increasingly skeptical of electric vehicles as they become more familiar with the technology. And they are doing so at a time when prices on new cars of all types are high and consumers are holding onto their cars longer as interest rates are also high. Higher interest rates driven by deficit spending in bills such as the Inflation Reduction Act make it harder for Americans to afford cars, which will become more expensive as Biden’s tailpipe emission standards are implemented and force Americans into more expensive electric vehicles.
All this is happening while large numbers of electric vehicles are sitting on dealer lots and the automakers are planning to build hundreds of thousands more. Automakers are being pushed into this by the Biden administration, whose EPA announced tailpipe emission rules that could require up to two-thirds of all the new vehicles sold in America to be fully electric by 2032. According to U.S. Energy Information Administration (EIA) projections, however, by 2050, only 13 percent of U.S. vehicles sold will be electric unless the government forces otherwise.
Also, automakers are getting huge amounts of government money to make electric vehicles due to the IRA and other government handouts. If it all falls apart, GM and Ford will be stuck with tens of thousands of unsold electric vehicles consumers refuse to buy and will be asking the taxpayers for a bailout. Even though EV technology has significantly improved in recent years, the same characteristics that propelled gas-powered vehicles to dominance in the early 1900s are still true: they are less expensive, can travel longer distances, and are refueled in a matter of minutes.
The environmental issues associated with electric vehicles are non-trivial. The average 1,000-pound EV battery requires extracting and processing 500,000 pounds of materials to procure the requisite lithium, cobalt, nickel, and other battery metals. Much of this mining is done abroad in mines with little regard for environmental or safety standards or for cutting emissions. As a result, the first 60,000 to 70,000 miles of an EV are more polluting—by climate activists’ own standards—than gas-powered cars. Further, as long as coal and natural gas make up 60 percent of the electricity generation in the United States, the benefits of electric vehicles compared to gasoline vehicles in terms of carbon emissions are negligible. Also, the weight of the heavy batteries currently puts an uncompensated toll on America’s roads, and even has parking garages worried about the safety of their structures.
Conclusion
The Biden administration is forcing electric vehicles on the American public despite the public’s lack of interest as part of the President’s climate program. Electric vehicles are expensive, have limited range and are time-consuming to charge compared to gasoline and diesel vehicles. Yet, to get to its targets, the Biden administration is deploying lucrative tax credits that are costing millions of dollars per “green” job. Even the UAW is alarmed as the tax credits and federal government loans come with no restrictions as to worker affiliation and wage levels despite Biden touting that his energy transition will create numerous good-paying union jobs. Biden, however, seems unconcerned with technical feasibility, consumer choice, safety, and costs as he steamrolls on his promise to rid the world of fossil fuels and the technologies that rely on them.
