IN-DEPTH: ‘Bidenomics’ Spends Up to $7 Million to Create Each $50,000 ‘Green’ Job, Study Finds

EV manufacturing subsidies enrich corporations, do little for workers, study says

Workers assemble Chevy Bolt EVs at the General Motors assembly plant in Orion Township, Mich., on Nov. 4, 2016. (Joe White /Reuters)

Despite the claims of “Bidenomics” acolytes that it will “rebuild the middle class,” a new study states that the hundreds of billions in federal subsidies for electric vehicle (EV) production are wasteful corporate giveaways, to the tune of up to $7 million per job created.

“Taxpayers are going to forgo tens of billions of dollars that are going to be given to some of the biggest corporations in America to build specialty vehicles that consumers don’t seem to want,” Robert Bryce, energy expert and author, told The Epoch Times. “This is another part of what is just a massive miscalculation by policymakers in Washington to try and force automakers and consumers to use electric vehicles, a technology that has been in the marketplace for 120 years.”

In addition to subsidies, the Biden administration is also using regulatory agencies to force automakers to get in line. New, significantly tighter emissions regulations on cars and light trucks were announced by the Environmental Protection Agency (EPA) in April, with the goal of mandating that up to 67 percent of new vehicles sold would have to be electric by 2032 in order for carmakers to be in compliance.

The history of government industrial policy, however, is rife with insider dealing, perverse incentives, and waste. A hallmark case for green energy was Solyndra, a manufacturer of solar panels that was granted $500 million in federal loan guarantees under the Obama/Biden administration and raised $1 billion in private capital, only to go bankrupt two years later.

Many experts say the current EV agenda is likely to produce the same result. According to industry reports, for example, Ford sold 12,000 EVs in the first quarter of 2023 but lost, on average, about $60,000 for every EV they sold.

“Considering that the Ford Model e average selling price was around $58,000 in the first quarter, the Blue Oval spent $118,000 on average for every EV it sold,” one report stated. “This made Tesla fans joke that Ford should buy a Model Y, slap a Ford badge on it, and still lose less money. The losses are expected to accelerate in the second quarter, as Ford announced an up to $4,000 price cut on the Mustang Mach-E.”

“Where do they make their money? On internal combustion engine vehicles,” Mr. Bryce said. “And yet, they’re going to spend tens of billions of dollars, including massive amounts of money from taxpayers, to try to effectively force feed electric vehicles into the marketplace.”

‘Green’ Subsidies Spend Millions for Each Lower Wage Job

The current mantra from the White House is that the Biden administration’s campaign of “green” subsidies and regulations, which they call “Bidenomics,” “is rooted in the recognition that the best way to grow the economy is from the middle out and the bottom up.”

In addition to halting the earth’s rising temperatures, the administration claims, “the President’s agenda is strengthening our clean energy supply chains by spurring new and expanded U.S. factories, including more than 150 battery plants and 50 solar plants already announced. In all, we’ve seen $490 billion in private investment commitments in 21st-century industries since the President took office, and … the clean energy workforce added nearly 300,000 jobs in 2022.”

But a report by Good Jobs First took a look at government spending on new EV battery plants, and found that EV subsidies ranged from $2 million to $7.7 million per job created, “and those are undercounts given that some forms of state and local support remain undisclosed and more federal money is inbound.”

In addition, the report stated, the wages from these projects are often below average for autoworkers. The average hourly wage for production workers in the U.S. car industry is $28.41, or $59,093 per year for full-time workers, but all of the EV projects are paying significantly less than that.

Government subsidies in total and per job for EV manufacturing plants are measured against the labor wages they create. (Courtesy of Good Jobs First)

“Production workers at General Motors and LG’s new joint venture battery plant in Warren, Ohio, are expected to make a paltry $16.50 an hour to start, up to $20 an hour after seven years,” the report stated. “At such low wages, the 45X credit on its own is enough to completely cover these companies’ capital investment costs and their total wage bill for the first several years of production, while still leaving them with money left over for other operating costs (or stock buybacks).”

As part of the Inflation Reduction Act, the Advanced Manufacturing Production Credit also known as section 45X, provides for subsidies for some new EV factories of more than a billion dollars each, per year, from the U.S. government. These subsidies come in the form of tax credits that corporations can use to reduce their income tax, sell to other companies, or “cash out” for a direct payment from the government. Any income from selling or cashing out of the tax credits would be excluded from a company’s taxable income.

“The 45X program alone will cost taxpayers over $200 billion in the next decade, far more than the $31 billion estimated by Congress’s Joint Committee on Taxation,” the Good Jobs report states. “On top of 45X and other federal incentives, factories manufacturing electric vehicles and batteries have also been promised well over $13 billion in state and local economic development incentives in just the past 18 months.”

By contrast to internal combustion vehicles, for which automakers control most aspects of production, in the case of EVs, Western car companies are more akin to assembly plants for batteries that are mined in places like the Democratic Republic of Congo and often pass through China for refining and production. Recent legislation is attempting to bring more elements of battery production within the United States but many of the new factories are owned by, or joint-ventures with, East Asian companies like SK On, LG, Samsung, and Panasonic.

While the subsidies for EVs appear to be going toward corporate bank accounts and not to workers, the cars themselves also appear to be a niche product for the wealthy.

EVs Aren’t for the Middle Class

Sales of EVs have risen dramatically from about 300,000 vehicles sold in 2020 to just under a million sold in 2022, but EVs remain an expensive niche product for wealthy urbanites and suburbanites. According to Ford’s website, the Ford F-150 Lightning, an electric pickup truck, ranges in price between $50,000 and $92,000, whereas the gasoline version starts at less than $35,000.

“These electric vehicles are not vehicles that are being bought by the working class,” Mr. Bryce said. “These are vehicles that are being made for the Benz and Beemer crowd,” with the average EV buyer earning around $150,000 per year.

Despite all the hype, regulations, and subsidies, however, many consumers don’t seem to be buying it. Industry watchers say they are seeing signs that demand for EVs is slowing and that electric vehicle inventories are expanding.

According to an industry report by Cox Automotive, the supply of unsold EVs on car lots across America has swelled nearly 350 percent this year, to more than 92,000 units. This is a 92-day supply of EVs, as compared with a 54-day supply of gasoline-powered cars.

“The inventories of EVs are stacking up on dealer lots,” Mr. Bryce said. In an effort to confirm the claims he’d read in the report, “I went to Maxwell Ford in South Austin and I saw it myself. The cheapest EV they had was about $50,000.

“That was on sale, and they had two dozen of them in stock,” Mr. Bryce said. “And so you know what the real realities are; Ford and GM are getting massive subsidies to build cars, and consumers aren’t buying.”

Beyond questions regarding consumer demand, automakers are also facing great uncertainty regarding whether and at what price they can source the materials needed to build EV batteries in sufficient quantities.

Carlos Tavares, the CEO of Stellantis (formerly Chrysler), stated in March that about 1.3 billion gas-powered cars would need to be replaced to meet climate goals.

“That will need a lot of lithium,” he said, speaking to only one category of minerals that are needed for EV batteries and that are projected to be in short supply. “Not only the lithium may not be enough, but the concentration of the mining of lithium may create other geopolitical issues.”

EV Transition ‘Won’t Happen Because It Can’t Happen’

The EV transition “won’t happen because it can’t happen,” Mr. Bryce said. “There are constraints on the system that are going to prevent automakers from being able to convert two-thirds of their production over to electric vehicles.”

“And even if the U.S. could solve the supply chains with the metal, minerals, and magnets, it’s clear that the U.S. electric grid is nowhere near ready to be able to charge all the vehicles that the federal government wants to force consumers to buy,” he said. “It’s going to potentially overwhelm the electric grid if we try to electrify all of transportation.”

Mr. Bryce is the author of “A Question of Power: Electricity and the Wealth of Nations,” a book on the history, structure, and function of America’s electric grid.

John Moura, director of reliability assessment at the North American Electricity Reliability Corp. (NERC), told The Epoch Times that the U.S. electricity grid is built to be able to handle the highest demand, which typically occurs in summer when people run home and office air-conditioning units. However, Mr. Moura said, “One electric vehicle charger is equivalent to about two-and-a-half normal-sized [home] air conditioners.”

Even with today’s modest share of EVs on the road, charging them has caused some EV owners to pay significantly higher electric bills, with one EV owner in New England reporting that, even while charging off-peak, their energy bills nearly doubled from $220 a month to $400, due to both vehicle charging and a general increase in electricity rates.

According to NERC’s 2022 electric grid reliability assessment (pdf), several areas of America’s power grid are at “high risk” of failing to meet demand. According to Moura, no sections of the U.S. grid are currently capable of handling the additional demand from EV charging that the Biden administration is attempting to mandate.

For all the additional costs, EVs are not as environmentally friendly as their advocates claim. While their tailpipe emissions are zero, so much CO2 emissions go into the mining, shipping, refining, and assembly of the minerals essential for battery production that each new EV comes with a “carbon debt” of excess pollution compared with the construction of gasoline-powered cars.

When emissions from electricity generation are also taken into account, most EVs take tens of thousands of miles of driving before they break even with emissions from an internal combustion engine. Depending on how the electricity used to charge them is generated, some will never repay their carbon debt.

“Traditional environmentalism, that is, the protection of the physical environment of landscapes and wildlife, has been replaced by renewable energy fetishism, and part of that is fetishism around electric vehicles,” Mr. Bryce said. “The claim that they’re going to massively reduce emissions is just not true.”