Pentanomics - Universal Law #2
Electric vehicles are a good example.
Universal Law #2 of Pentanomics is that we have no choice about the laws that govern society. A free society is governed by economics. The push to adopt electric vehicles is a good example.
In a report dated September 14, 2022, the University of California Santa Barbara gave a gushing “fact sheet” of the electric vehicle manufacturing boom created by the Biden administration. Biden’s goal was to have electric vehicles be 50% of all vehicles sold in America by 2030. Congress passed laws to support the effort. The Bipartisan Infrastructure Law included investment of $7.5 billion to install 500,000 chargers, $7 plus billion to ensure that American companies have the supplies needed to make batteries, $10 billion for electric buses. The Inflation Reduction Act gave incentives to buyers to purchase electric vehicles and incentives to manufacturers to produce them. The Chips and Science Act created more investment in semi-conductors needed for electric vehicles. That is just part of the story.
The article went on to provide evidence of private investment. Automakers were increasing the number of fully electric models being offered. There was increased investment in battery technology and supplies. There was increased investment in chargers.
Surely, all that investment by government would sell electric vehicles. What are we finding?
Ford is a good example. In an article by CNN, “Ford ditched plans for its next lineup of all-electric SUVs, replacing them with hybrid models, which typically offer shorter battery range but longer overall range when combined with a gasoline engine.”
Why? Ford was committed to making only electric vehicles. Why the change? People were not buying them. The problem was range was too short and prices were too high. The change in direction could ultimately cost Ford $1.5 billion.
I drive a Ford Fusion energi. It is a hybrid. I have loved it. I used it to commute about 20 miles to work. I charged it at home and at work. I travelled all summer on one tank of gas. I am in favor of electric and hybrid vehicles.
The point of this article is that Pentanomics is correct. No matter how much government tries to force things on a free society, demand will determine whether it will be profitable. In the long run, companies cannot provide goods and services that are not profitable. Which brings us back to Universal Law #2, we have no choice about the laws that govern society.