ADAM SHARP
DECEMBER 4, 2024
Germany’s economy is in deep trouble, and Volkswagen is the poster boy.
VW shares are down about 67% from their 2021 peak. Earnings are down 66% over the last year.
And this week 70,000 German VW workers walked off the job. They’re furious over plant closures, layoffs, and salary cuts.
So, what’s the root cause of VW’s woes?
For the last few years, VW has been shifting production to electric vehicles (EVs). This is largely due to EU mandates requiring all cars to be electric by 2035.
At first, the government heavily subsidized EVs. And sales jumped. But now the honeymoon is over.
Let’s just say the transition to “net zero” in Europe is not going well. First of all, there’s not enough energy in the grid to charge all those batteries. And the little electricity available is very expensive.
Electric autos are proving to be far more expensive from start to finish.
I found a comment worth sharing from one angry German reader on the Daily Mail’s coverage of the VW strike.
I live in Berlin. I would estimate 90% of people here live in flats without designated parking places. Does the government seriously expect to provide fast chargers on the streets for these 90%? They just cannot admit they are wrong. EV is fine if you have a garage, but if you live in a flat forget it.
The reader makes an excellent point. Most people have no place to charge an EV. Even if there was enough energy, they’d have to leave charging cables all over the roads. That copper would disappear quickly. This is one of a dozen major flaws with the mandates.
The EU technocrats who pushed these policies did zero real planning. It’s just a pipe dream. They literally saw how well Tesla was doing and said to themselves “We should make everyone do that.” This was the extent of their analysis.
Nord Stream and Nuclear
Germany’s move into electric vehicles is only their latest stumble when it comes to energy policy. They are also shuttering all their nuclear power plants.
And they stood by passively while somebody blew up the Nord Stream gas pipeline from Russia. And even though one of the lines of Nord Stream is still operable, they aren’t utilizing it. There’s dirt cheap natural gas available and they’re choosing to buy imported liquified gas which costs 4x as much.
As a result, energy prices have soared.
Now Germany plans to rely on solar and wind in a country with little sun and inconsistent wind. Oh yeah, they’re also relying on “green hydrogen” to power their industrial economy (spoiler alert: this will also fail).
These missteps have been devastating to Germany’s industrial base.
Germany is supposed to be the economic engine of Europe. And it was, until 2018. Then the climate mandates and “net zero” rules started rolling in, and it’s been straight downhill since.
Lessons Learned
German workers and citizens appear to be waking up to the scam. The vast majority of people don’t want EVs, and they’re becoming loud about it. A massive political shift is underway throughout Europe.
The EU mandate to ban all gas-powered cars by 2035 is doomed. Regulators are already discussing allowing hybrid vehicles, and they will eventually cave on traditional combustion engines as well. The goals are utterly impossible.
This type of government intervention never goes well. EVs were already growing, finding their own path to realistic adoption levels. Then EU technocrats got involved and spoiled the entire economy. You can’t force industries to do what you want. That should be the lesson here.
Here in the U.S., we’re experiencing our own awakening. President Trump and his team are set to shake things up across the board. De-regulation, energy expansion, and bringing manufacturing home.
In the States at least, the awakening extends far beyond economic issues. As Elon Musk recently posted on X, “Cancel culture has been canceled”. So free speech is making a comeback, too.
And across the world, people are also pushing back against lax immigration policies.
It’s an exciting time. We’ve been on the wrong path for so long, and it seems that’s finally changing.
Who knows, maybe the EU will eventually become investable again. For now, I will continue to avoid the continent, but let’s see what happens over the next few years.
DECEMBER 4, 2024
Germany’s economy is in deep trouble, and Volkswagen is the poster boy.
VW shares are down about 67% from their 2021 peak. Earnings are down 66% over the last year.
And this week 70,000 German VW workers walked off the job. They’re furious over plant closures, layoffs, and salary cuts.
So, what’s the root cause of VW’s woes?
For the last few years, VW has been shifting production to electric vehicles (EVs). This is largely due to EU mandates requiring all cars to be electric by 2035.
At first, the government heavily subsidized EVs. And sales jumped. But now the honeymoon is over.
Let’s just say the transition to “net zero” in Europe is not going well. First of all, there’s not enough energy in the grid to charge all those batteries. And the little electricity available is very expensive.
Electric autos are proving to be far more expensive from start to finish.
I found a comment worth sharing from one angry German reader on the Daily Mail’s coverage of the VW strike.
I live in Berlin. I would estimate 90% of people here live in flats without designated parking places. Does the government seriously expect to provide fast chargers on the streets for these 90%? They just cannot admit they are wrong. EV is fine if you have a garage, but if you live in a flat forget it.
The reader makes an excellent point. Most people have no place to charge an EV. Even if there was enough energy, they’d have to leave charging cables all over the roads. That copper would disappear quickly. This is one of a dozen major flaws with the mandates.
The EU technocrats who pushed these policies did zero real planning. It’s just a pipe dream. They literally saw how well Tesla was doing and said to themselves “We should make everyone do that.” This was the extent of their analysis.
Nord Stream and Nuclear
Germany’s move into electric vehicles is only their latest stumble when it comes to energy policy. They are also shuttering all their nuclear power plants.
And they stood by passively while somebody blew up the Nord Stream gas pipeline from Russia. And even though one of the lines of Nord Stream is still operable, they aren’t utilizing it. There’s dirt cheap natural gas available and they’re choosing to buy imported liquified gas which costs 4x as much.
As a result, energy prices have soared.
Now Germany plans to rely on solar and wind in a country with little sun and inconsistent wind. Oh yeah, they’re also relying on “green hydrogen” to power their industrial economy (spoiler alert: this will also fail).
These missteps have been devastating to Germany’s industrial base.
Germany is supposed to be the economic engine of Europe. And it was, until 2018. Then the climate mandates and “net zero” rules started rolling in, and it’s been straight downhill since.
Lessons Learned
German workers and citizens appear to be waking up to the scam. The vast majority of people don’t want EVs, and they’re becoming loud about it. A massive political shift is underway throughout Europe.
The EU mandate to ban all gas-powered cars by 2035 is doomed. Regulators are already discussing allowing hybrid vehicles, and they will eventually cave on traditional combustion engines as well. The goals are utterly impossible.
This type of government intervention never goes well. EVs were already growing, finding their own path to realistic adoption levels. Then EU technocrats got involved and spoiled the entire economy. You can’t force industries to do what you want. That should be the lesson here.
Here in the U.S., we’re experiencing our own awakening. President Trump and his team are set to shake things up across the board. De-regulation, energy expansion, and bringing manufacturing home.
In the States at least, the awakening extends far beyond economic issues. As Elon Musk recently posted on X, “Cancel culture has been canceled”. So free speech is making a comeback, too.
And across the world, people are also pushing back against lax immigration policies.
It’s an exciting time. We’ve been on the wrong path for so long, and it seems that’s finally changing.
Who knows, maybe the EU will eventually become investable again. For now, I will continue to avoid the continent, but let’s see what happens over the next few years.
The Green New Scam is Killing Germany - Daily Reckoning
The tragic decline of a former industrial giant...
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