Last week when the EPA released the new tailpipe emission rules the headlines were all over the place. Reuters claimed it eased tailpipe emissions and is slowing the EV transition, while NPR described them as strict. The Democrats on the Energy and Commerce Committee claimed it is not a mandate. Make no mistake about it, it is absolutely an EV mandate. Check out this table below from the EPA.

Looking at the table above you can see that by 2027 pickups will be required to average 184 grams/mile CO2. Consider the best-selling vehicle in the US today is the F150 which sits at about 430 grams/mile today. What this means is that by 2027 for every ICE F150 built, Ford will have to build TWO fully electric F150’s. By 2032 Ford will have to build FOUR electric trucks for every ICE truck.

Now, keep in mind that Ford sold about 750,000 ICE F150s in 2023 and 25,000 BEV F150s. They produced over 70,000 Ford F150 BEVs.

See: https://media.ford.com/content/fordmedia/fna/us/en/news/2023/08/01/ford-restarts-expanded-rouge-electric-vehicle-center–f-150-ligh.html

Ford only sold roughly a third of what they produced. They have the capacity today to build 150,000 BEV F150s today. So, for them to just sell half of the ICE F150s they sold in 2023, they will have to produce 750,000 BEV F150s in a little over two years, basically increasing production capacity five-fold and hoping someone buys a few of them, as they only sold 25,000 of them in 2023.

What does all this mean? The mandate will greatly reduce the supply of the best-selling vehicle in the US, at least by half, while demand for it likely stays the same. I wonder what will happen to the sticker price of the ICE F150? It could easily double, and with unwanted EV Trucks flooding the market, they will be dirt cheap. So not only does this mandate control who builds what, it effectively destroys the affordability of vehicles in the highest demand, like the F150.

This will be a disaster for Ford, US Automakers are being required to build things they cannot make money on, and cannot sell. I guess we will find out if the adage “Too Big To Fail” will remain when all the dust settles. Because I assume it will hold, and US Taxpayers will be paying to bail out the big three, once again.

https://mattrandolph.substack.com/p/the-biden-ev-mandate?utm_source=profile&utm_medium=reader2