Since the Chinese are coming – more finely, Chinese EVs are coming – some are arguing for an American “industrial policy” that would include resurrecting federal tax credits and other such subsidy mechanisms to prop up the sales of American EVs, which are already in freefall (even before the inevitable influx of cheap, Chinese-made EVs).

The chickens are, as they say, coming home to roost.

Back in the ’90s, the decision was taken to grow the Chinese economy by transferring the U.S. economy to China. More finely, to transfer the productive manufacturing economy to China. Americans were told they’d get cheaper stuff in return – and they did. What they were not told is how much it would cost them. Fast forward thirty years and Chyna is now a manufacturing powerhouse. It is not Communist, either – other than in name only. It is corporatist – state and corporate power fused as one. It is the new business – for the world.

Chinese EVs are cheap – relative to the cost of EVs made elsewhere – because the Chinese state subsidizes the manufacturing of EVs and also the powering of them, via state-supported infrastructure. That is the business model that some urge be adopted here and they have already gotten their wish because to some extent it already is the business model. The only reason there are any EVs for sale in this country is because the state effectively demanded their manufacture and protected their manufacture – just as has been done in China, only to an incomplete extent. Which is why the initial push has failed. In the United States, people were still allowed to not buy EVs – and that’s what 92 percent of them didn’t do.

EVs never achieved higher than a roughly eight percent “market” share – and almost all of that was concentrated in deeply blue urban hive areas, such as Los Angeles, San Diego, San Francisco and Washington, DC. Much of that was propped up by the $7,500 federal tax credit that was available to affluent people – you had to have paid a certain (large) sum in taxes to be eligible for the credit – and when that credit was rescinded, the EV “market” cratered. It is now less than 5 percent. Lucid – one of the highest-end EV “start ups” – is about to go belly up. Scout – VW’s EV subsidiary – is likely to go belly up. Rivian continues to lose money. Ford and GM have lost enormous sums of money. Nissan is cancelling several devices it had planned to offer in the U.S. on account of their being no market for them. Not even Brie Larsen could sell the Ariya – an EV with a name that sounds like the war-cry of the Ewoks from Star Wars.

So now the cry is for the return of the $7,500 tax credit – and more – to stave off the Chinese EVs. This argument assumes, of course, that there actually is a market for them. It’s a false assumption. Why would Americans be any more interested in cheap Chinese EVs given they impose the same time-cost as the more expensive EVs more than 90 percent of them have already decided not to buy? Certainly, the buy-in cost is a factor. But it is not the only factor. If it were, then Nissan would be making fat stacks – as Jesse from Breaking Bad used to say – selling the Leaf, which is relatively cheap as far as EVs go. The problem is it does not go very far – and it takes very long (relative to vehicles with gas tanks) to get it going again. There are probably never going to be more than eight percent of Americans who are willing to buy into having to spend even 15 minutes twice a week waiting for a charge – and never mind the actual (real-world) hour-plus wait to get a full charge.

In Chyna, the masses don’t have much choice about that. The option to not drive an EV has been (effectively) removed by the state, which also controls the electricity (and access to it) that powers the EVs. Also in Chyna, you are controlled – via the EV, which is a scaled up electronic device very similar to a smartphone. Which – in Chyna – is used to control pretty much everything. When you want to buy something, you scan the app and (of course) you are scanned in return. If the system decides you’re unworthy of being allowed to buy, then the system does not allow you to buy. Just the same, EVs are used to control whether, how and when you are allowed to drive.

That is what the corporatists want here, too. Since they failed the first go ’round, they are trying again. You may have noticed the rising cost of gas due to Trump’s stupid, evil war – which may be simply evil rather than stupid. Use Occam’s Razor. Why would Trump want to destroy not just his own approval ratings but the electoral prospects of his party? Could it be that he was selected to finish the job he started back in 2020 when he ensured the selection of Joe Biden? Sure, he tossed a sardine to the seals in the form of the ending of the federal $7,500 tax credit and the dialing back of CAFE compliance fines and the CO2 “emissions” folderol. It may have given some reason to believe fundamental change was happening.

And it is – just not in the way people believed it would happen.

The easiest way to reboot the EV transition – and the attendant industrial (and social) policy is to render the alternative – gasoline and diesel –  expensive and scarce. Then we can transition to a China-emulating corporatist system, which we’ve already mostly got anyhow.

. . .

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