China’s Electric Vehicle Bubble Begins to Pop

China’s Electric Vehicle Bubble Begins to Pop

August 24, 2023

President Biden and the eco-left electric vehicle (EV) policies often tout China’s economic model of picking winners and losers in the energy marketplace as something we should replicate. However, even putting aside the moral bankruptcy of praising the Communist Chinese government, the reality is this economic model is already failing, which will inevitably lead to disastrous consequences. 

The Wall Street Journal Editorial Board writes,  

“A plethora of Chinese EV start-ups launched in the past decade, fueled by government support, including consumer incentives and direct financing. Auto makers churned out EVs to suck up subsidies. Giant property developer Evergrande Group launched an EV unit as its real-estate empire began to implode, but now the EV unit is foundering too. About 400 Chinese electric-car makers have failed in the past several years as Beijing reduced industry subsidies while ramping up production mandates.”

The EV bubble in China finally popping, showing once again why the “government knows best” approach results in failure. Unfortunately, these dangerous policies are already being copied here in the U.S. The government is spending hundreds of billions of taxpayer dollars on new programs to push electric vehicles, including a clean vehicle tax credit. Since most families want nothing to do with electric vehicles, the cost of traditional cars will likely rise to offset companies’ losses from EVs. 

“Traditional auto makers will have to raise prices on gas-powered cars to compensate for their EV losses. A United Auto Workers executive said Sunday that Stellantis is threatening to move production of its Ram 1500 trucks to Mexico from suburban Detroit, no doubt to reduce costs. The EV jobs President Biden touts will come at the cost of union jobs building gas-powered vehicles.”

China’s failures show electric vehicles cannot be force onto the American people, especially through heavy-handed government policies. America needs to break away from China’s failed economic model and let the EV business flourish or fail on its own. If we don’t change course, we will ultimately reap the whirlwind that China currently faces.