The writer is a Los Angeles freelancer and former Detroit News business reporter. This column first appeared on his blog, StarkmanApproved.com.
By Eric Starkman
Michiganders should be aghast about how brazen Gov. Gretchen Whitmer is playing the state’s taxpayers for green energy fools.
Whitmer on Tuesday signed Executive Directive 2023-5, which mandates that the state’s fleet of light duty vehicles be zero emissions (ZEV) by 2033 and that all medium- and heavy-duty vehicles be zero emissions by 2040. Whitmer said the directive will “help boost demand for Michigan-made electric vehicles, and lower costs of fuel and maintenance.”
Whitmer offered not one iota of evidence to substantiate her claims that her directive would result in lower costs. Moreover, Whitmer is either blissfully unaware, or is imbued with more guile than I imagined, to suggest that her directive will boost demand for Michigan-made ZEVs. Electric vehicles that would be most practical for state usage are made in other U.S. regions and Mexico, where GM builds its EV Equinox and Blazer and Ford, the company that’s “all in on America,” proudly builds its electric Mustang Mach-E.
Whitmer, for whom taxpayer money is never an object, perhaps wants state employees to tool around in style. GM manufactures its monster EV Hummer at its Detroit/Hamtramck assembly plant, but that vehicle weighs more than 9,000 pounds and will tear up Michigan’s badly damaged roads – those “damn roads” that Whitmer promised to fix.
Although Michigan roads have improved a tad, they still are in rough shape and projected to get worse in future years. Electric vehicles weigh considerably more than their gas engine counterparts, but I doubt that Whitmer has factored road repair costs in any of her rosy, green energy projections. Frankly, I’d be surprised if she’s even familiar with the issue.
Hertz thought it was clever being an early rental car company mover and flooding its fleets with Teslas and Chevy Bolts but the company fast learned that few people would voluntarily rent them. Another lesson Hertz quickly learned is that its EV repair costs were significantly higher than expected, particularly when they are in accidents.
Michigan ranks No. 12 among states with the most accidents, so EV repair costs are an especially important consideration.
According to a recent report in the Wall Street Journal, repairing an EV after a crash last year cost an average $6,587 compared with $4,215 for all vehicles. Repairing an electric car tends to take longer because there are still a limited number of shops capable of doing this type of work. It takes 25% longer to get an EV into a body shop than a traditional vehicle. EV repairs take roughly 57 days compared with 45 days for a gas engine vehicle.
EVs don’t require gas, so admittedly Michigan will save on fuel costs electrifying its fleet. But there’s still mounting costs to charge the electric vehicles.
Whitmer last week signed aggressive green energy climate bills that will require Michigan utility companies to get 100 percent of their energy from clean energy sources by 2040, including wind, solar, landfill methane, and manure. The law also allows some energy to be derived from incinerated waste.
Whitmer says her bill will result in lower energy costs for Michiganders, but one must be awfully naïve to believe the Whitmer has done a detailed analysis to support her claim, particularly since energy efficiency and affordability aren’t among Whitmer’s accomplishments.
Michigan has some of the nation's least reliable electricity service along with some of the highest residential rates. The Michigan Public Service Commission (MPSC) approved a $368.1 million annual rate increase last week that will add $6.51 to DTE customers' monthly bills starting Dec. 15. The MPSC is a three-member body appointed by the governor.
To her credit, Whitmer is doing her part to generate manure, particularly with the oodles of “good green jobs” she promised but are fast disappearing.
Whitmer spearheaded $1.7 billion in tax breaks and subsidies and spent millions more destroying fertile farmland and century old trees in rural Marshall so Ford could build a battery plant employing a promised 2,500 workers. Ford has scaled back the plant’s size and will only employ 1,700 workers, some of them employees of the China-based battery company from which Ford is licensing its technology and paying royalties
It's not clear whether Ford will still be eligible for the entirety of its sweetheart tax breaks, which amounted to about $700,000 per job under the original scope of the project.
Ford has also eliminated an entire production shift at its River Rouge plant where it manufactures its electric F-150 Lightning because of a significantly reduced demand for the vehicle.
GM, which has received billions in Michigan taxpayer subsidies, has delayed until late 2025 the production start of electric trucks, including the Chevy Silverado EV and GMC Sierra EV, at its Orion assembly plant. That plant, which employs nearly 1,300 people, builds Chevy Bolts, which were slated to be discontinued by the end of the year. GM CEO Mary Barra says the company will make a new and improved version of the Bolt, but Reuters reported the vehicle will be built in Kansas.
GM’s Detroit/Hamtramck plant was slated to produce Cruise Origin multi-passenger shuttles but plans to build those vehicles have also been paused.
Our Next Energy, a Novi-based battery company that mooched more than $200 million off Michigan taxpayers, recently laid off 25% of its staff, including 82 Michigan workers.
“We will work with anyone and compete with everyone to keep putting Michiganders first, creating good-paying jobs with great benefits, and building the future of the auto industry right here in Michigan,” Whitmer declared when she announced her $200 million taxpayer giveaway.
The future of the auto industry in the short term appears to be hybrids and in the long term its electric vehicles. Toyota’s hybrids are ranked among the best in the industry, and it builds 12 vehicle models in Indiana, Texas, Kentucky, and Indiana. Ford boasts that its Maverick is America’s top selling hybrid pickup but know where the supposedly great corporate American patriot builds the vehicles?
Mexico. In fact, the Maverick is ranked “the least American made” truck.
Stellantis Rejects Incentives
Crain’s Detroit Business reported that Stellantis turned down $1 billion in direct incentives from Michigan to build a massive battery plant in the state. Instead, the company opted for Indiana where it received less of a sweetheart deal. Stellantis is a considerably better managed and more profitable company than GM and Ford, which should make the company’s rejection particularly painful for Michiganders.
Whitmer doesn’t have a clear mandate to pursue her aggressive green energy initiatives, particularly given indications that EVs are proving particularly unpopular in Michigan.
Nearly 3,900 automotive dealers recently signed an open letter to President Biden asking him to “slow down” his proposed regulations mandating battery electric vehicle (BEV) production and distribution.
“Currently, there are many excellent battery electric vehicles available for consumers to purchase,” the letter says. “These vehicles are ideal for many people, and we believe their appeal will grow over time. The reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots.”
Dealers from Florida, California, and Texas were among the letter’s biggest signatories, respectively with 413, 336, and 281 dealers signing the letter. But dealers from Michigan, which has half the population size of Florida, California, and Texas, ranked No. 4, with 211 dealers signing the letter. New York dealers ranked 5th with only 167 signing.
Whitmer has made it clear she isn’t long for Michigan, as she has her sights set on Washington, where the mainstream media believes she’d make an awesome vice president and even president. That’s great for Whitmer, but Michigan residents who care about their state and wish to stick around shouldn’t sit idly by while Whitmer passes poorly thought-out legislation, the consequences of which she won’t be around to endure.
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