America Could Run Out Of Cars
Tariffs on goods from Canada and Mexico could be as high as 25%, the Trump Administration has said. The decision could cause a round of retaliation.
*EV Alternatives?
Among the items hit hardest would be cars, and among cars, EVs. Manufacturers would quickly run low on these parts. The flow of new cars to dealers would shut down on some models. The public, based on simple supply and demand, would face much higher prices. “Car factories could start slowing down — or even shutting down — in relatively short order, Michael Robinet, vice president of forecast strategy at S&P Global Mobility,” CNN reports.
The shuttering or slowing of car assembly lines would help dealers–temporarily. As was the case when supply chains were disrupted in the early days of the COVID-19 pandemic, low inventories allowed dealers to sometimes charge more than even MSRP (manufacturers suggested retail price). Car companies protested and threatened. Most dealers ignored them. Car supplies are high enough now that both manufacturers and dealers are offering costly incentives.
Green Alternatives?
The benefit of shortages turn from a benefit to a nightmare as cars shipped to dealer lots trend toward zero for some models. Dealer overhead is unlikely to change radically, Revenue would take a nosedive.
The car supply tariff problem is just one in a long list of products the prices of which would rise. Among them is crude oil. Low crude oil inventory usually means higher gas prices. People can pay more for cars and the gas that fuels them.
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