EV market could become the 'next big flop': Economist

Just like Ford’s «Edsel» model in the 1950s, Trump administration economist Steve Moore cautioned that electric vehicles (EVs) may be the auto market's «next big flop.»

«Henry Ford's son was named Edsel, and this was going to be the great car, all of the executives said, 'This is the car everybody's going to want to buy.' Ford made 500,000 of these new sedan cars, but guess what?» Moore said on «Varney & Co.» Monday. «Nobody bothered to ask consumers whether they wanted the car.»

«And of course, the Edsel was one of the great flops of all time,» the economist continued. «I'm here to tell you, if these trends continue, we're going to see the EV market become the next big flop because car buyers don't want them.»

Moore’s comments come as the EV push at Ford and General Motors hit a speed bump that’s cutting into the automakers’ profits and causing them to reevaluate their electric plans amid a price war and supply chain challenges.

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Ford noted in its earnings report released last week that its EV unit posted a quarterly loss before interest and taxes (EBIT) of $1.33 billion – an acceleration after a loss of $1.08 billion in the prior quarter. It added that it’s cutting production of its Mustang Mach-E while scaling back about $12 billion in planned investments in the EV segment, including delaying its second battery plant in Kentucky.

General Motors saw its quarterly profit reduced by about $1.5 billion because of higher costs and the impact of selling more EVs, though it doesn’t break out losses from its EV unit in the same way Ford does.

GM CFO Paul Jacobson said that it would abandon an interim goal of building 400,000 EVs from 2022 through mid-2024, instead focusing on a goal of «getting to 1 million EVs of production by the end of 2025 alongside hitting our margin targets.»

«Given the huge losses that these companies like Ford are suffering because of the EV mania, I saw a statistic this morning that Ford is losing something like between $40,000 and $60,000 per car,» Moore reacted. «It's been a bad bet.»

The economist further argued that auto industry-wide bailouts