My good friend and occasional blog pinch hitter William Teach of The Pirate’s Cove noted on Wednesday that General Motors is cutting back significantly on its commitment to produce the plug-in electric vehicles the global warming climate emergency activists and Biden Administration have pushed:
After investing billions to adhere to President Joe Biden’s green energy agenda, General Motors (GM) is backtracking on all fronts when it comes to Electric Vehicles (EVs).
As GM was the last of the Big Three to strike a tentative agreement with the United Auto Workers (UAW), the automaker’s green energy dreams — championed by the Biden administration — have come crumbling down.
GM CEO Mary Barra, a close ally of Biden’s, has said the automaker will not begin to attempt to produce 400,000 EVs from 2022 through mid-2024 as initially planned. GM is also delaying retooling its plant in Orion Township, Michigan, to build EV pickup trucks.
Days ago, GM had to begin offering owners of its Chevy Bolt about $1,400 to install a diagnostic program to determine if the vehicle’s EV battery is defective. The move came after GM had to recall all of its Chevy Bolts due to the EV battery issues and a class action settlement over the battery problems is anticipated in the near future.
And now you know why I call them Chevy Dolts! 🙂
In addition, GM executives are having to delay launching a number of their EV models such as the Chevrolet Equinox EV, the Chevrolet Silverado EV RST, and the GMC Sierra EV Denali.
Mr Teach, who is an actual automobile salesman in real life, added:
Few ask about them except as conversation. I talk with sales reps from numerous different dealerships, and their customers are not interested. Hybrids? Yes, acceptance is way up. EVs? Nope. . . . The highline dealers, who’s manufacturers went all in, are seeing their sales of new tanking. Those who wanted EVs got them, and the rest aren’t interested, and will go elsewhere to get a non-EV. And those still looking will mostly get Teslas, because many of the others are, per customers, total trash. The market is making clear what it wants to happen.
And then there was this, from The Philadelphia Inquirer:
Orsted’s announcement that it was abandoning its New Jersey offshore wind projects was akin to abruptly snatching away key pieces of the state’s renewable energy puzzle.
Danish global offshore wind developer Orsted’s abrupt announcement this week that it is abandoning both of its massive projects planned off the New Jersey coast is a stinging blow to Gov. Phil Murphy’s ambitious goal of addressing climate change that threatens the state’s coast.
The company’s announcement Tuesday night was akin to abruptly snatching away key pieces of the state’s renewable energy puzzle. As of Wednesday, it was unclear how leaders would fill that void.
However, one key piece does remain in place: Atlantic Shores, the largest single wind farm yet approved by the New Jersey Board of Public Utilities (BPU).
Orsted in its earnings statement cited economic headwinds as the reason.
“Economic headwinds,” huh? That’s press-release talk for, “We can’t make enough money on this project.” It doesn’t mean that there would be no profit at all, just that there would not be sufficient profits to justify the investments made. ‘Return on investment‘ is a fairly simple calculation, the net profit (or loss) earned from your investment, divided by the amount of your investment.
According to conventional wisdom, an annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. This is also about the average annual return of the S&P 500, accounting for inflation.
Back to the Inquirer:
“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,” said David Hardy, group executive vice president and CEO Americas at Orsted. “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2.”
Hardy said the company was disappointed and thanked Murphy and other state leaders who tried to kick-start the industry in the state, hoping to make it a hub for offshore wind in the Northeast.
Adam Lashinsky of The Washington Post warned that higher interest rates might be here for the long term, which makes Mr Hardy’s statement all the more important: if interest rates continue high, in an industry in which price increases are heavily regulated by the states, where is the profit for Orsted in building offshore wind turbines?
Naturally, Governor Murphy and the rest of the state’s political leaders waxed wroth, and have issued not-so-veiled threats to ‘sue the bastards’, but there’s a pretty basic problem: if Orsted, which was already there, concluded that they could not make enough money to justify continuing with their Ocean Wind 1 and 2 projects, and Atlantic Shores Project 1 has already forced that company to admit to some of the same problems — though Atlantic Shores has not pulled out yet — then just where do the politicians in the Garden State expect to find reliable private companies to build these offshore wind farm projects? I have this big mental picture of the USSR’s Stalinist era public works projects, or more recently, the utter disaster that befell Venezuela’s oil industry when socialist Hugo Chavez nationalized the industry.
There has always been a bit of a pie-in-the-sky scent to the ideas of the climate activists, and while there have been some limited successes, very little of their economic ideas and promises have come close to meeting the goals the activists have promised. But it’s hardly a surprise; if liberals actually understood economics, they wouldn’t be liberals anymore.
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