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EVs Like Toyota’s RAV4 Prime and Hyundai Tucson PHEV Being Slowed Down By The U.S. Election Cycle

Every manufacturer from GM to Tesla to Toyota seems to be slow-walking new electric vehicle models. Could the reason be tied to uncertain price supports for electric vehicles?

Fans of the new 2021 Toyota RAV4 Prime are frantically trying to locate inventory of the new plug-in hybrid-electric vehicle. Toyota, the top producer of green vehicles in the world and for all of human history, can only seem to build a limited number of this super-hot new release. So shortages, and high prices from dealers hoping to cash in on a hot commodity, are casting a shadow over an exciting new product that Toyota fans are otherwise thrilled by.

The American Election Cycle And the Future Of EV Subsidies
Subsidies funded by taxpayers, manufacturers, dealers, investors, and vehicle buyers for EVs play a role in the sales cycle of these products. Every automaker, including Tesla, lobbies the U.S. government for more of them. By masking the true cost of electric vehicles, automakers can price them closer to vehicles that are powered by internal combustion engines or by hybrid-electric drivetrains. The auto industry is super-competitive, and many automakers operate on thin or negative margins. Without these subsidies to reduce the cost to the consumer, shoppers would be seeing $45,000 MSRP compact electric cars with a different viewpoint.

Were EV subsidies to be interrupted or discontinued, marketing and business plans that rely on them would likely not succeed. Subsidies and government intervention in product price supports are called “uncontrollable factors” by product planners and marketing managers. Although special interest groups might try to influence Congress and the Presidency’s decisions, results of these expensive actions cannot be guaranteed. However, marketing managers can hedge their bets in certain situations. One such situation has presented itself.

The Republican Congress and a Republican President passed the current tax law that includes EV tax deductions and other green technology subsidies without Democratic support. The R party presently has a reputation as neutral or against green vehicle subsidies and the D party has a reputation as being pretty postive on green technology subsidies.

With the election just two months away, and the current terms ending in early January, automakers may well have been hedging their bets for quite some time before committing resources to green vehicles. They will never tell anyone outside of their own boardrooms how closely aligned the products and elections are. Angering politicians, even ones not yet elected can result in avoidable difficulty for a vehicle company or an individual auto executive.

Proof of Subsidies and Marketing Plans Being Aligned
It isn’t hard to link the sales and marketing plans of automakers to EV subsidies. Tesla has launched five vehicles. The first four were initially for sale only in the U.S. state that most generously supported green vehicles with dollars. Toyota’s new RAV4 Prime, which launched last month, is presently only being sent to dealers in states with generous green vehicle subsidies and programs (called the ZEV states). General Motors and other green vehicle manufacturers are well-known for sending the majority of their green vehicle inventory to dealers in the ZEV states, and leaving shoppers in other states that don’t welcome EVs with open arms and wallets looking on wondering what happened.

As the election cycle ends, so too will uncertainty. Early next year, manufacturers of products for the United States market will return to the plans they have already created and begin to execute the one that aligns most logically with the political climate.

John Goreham is a long-time New England Motor Press Association member and recovering engineer. Following his engineering program, John also completed a marketing program at Northeastern University and worked with automotive component manufacturers. In addition to Torque News, John's work has appeared in print in dozens of American newspapers and he provides reviews to many vehicle shopping sites. You can follow John on Twitter, and view his credentials at Linkedin

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DeanMcManis (not verified)    September 18, 2020 - 12:54AM

I believe that you are correct John. The current administration has actively worked against EVs, repealing incentives, reducing cleaner smog requirements and slowing the progress of requiring higher fuel economy goals for automotive manufacturers. A similar government move to ease the required goals of reducing smog and increasing fuel economy pretty much stopped American innovation in EVs in the 1990s for 20 years. At that time we saw great growth in gas guzzling, truck and SUV sales, which similarly had a resurgence under the current pro-oil administration. So now there is a clear wait-and-see atmosphere by automakers to determine if we will have a government that supports EVs moving forward, or not.