How do you bankrupt a business?
That’s easy. Use the money you earn selling things that are profitable to fund money-losing “investments” and then stop selling the things that pay for those “investments – until you run out of money.
At which point the wheels come off and that’s the end of the ride.
Ram truck’s CEO Mike Koval, Jr. didn’t quite say it that way the other day – at the press reveal for the device styled the 2024 REV, the battery-powered version of the Ram pick-up that will supposedly replace it.
But he did say this:
“The cost of electrification is expensive, so for sure we need to make sure we protect the profitability of our current in-market business” – the reference here is to vehicles like the Ram pick-up that earn money for the company – “to help fund the transition to electrification.”
Italics added. And there you have it. A kind of loopy preemptive funeral oration for a viable business that isn’t dead yet but will be, soon.
“We’re here to celebrate and talk about” the REV, Koval said. “But it’s expensive. That’s the elephant in the room for everybody.” Yes – and he’s about to trample Koval and everyone else within . . . what’s the right word?
Ah, yes. Range.
The 2024 REV will supposedly be able to travel as far as 500 mile on a charge but this is likely to prove as truthful as “safe and effective.” Especially if the REV is tasked with hauling (or carrying) much of anything. But even if it can, it is expected to cost at least as much as its main rival, the device Ford calls the Lightning – the battery-powered version of the F-150 pickup.
Which costs more than $60k to start after four successive price increases since it came out last year.
How much it (and the REV) will cost next year is likely to be more – as Stellantis (which owns Ram as well as Jeep and Dodge) CEO Carlos Tavares actually said out loud a few days prior. Because lithium isn’t cheap or easy to get a lot of – and just one device like the REV or the Ford Lightning uses up more lithium than would be sufficient to make batteries for thousands if not tens of thousands of smaller devices, such as cell phones and laptops – demand for which is already enormous. The artificially induced “demand” for devices that weigh several tons rather than a few ounces will make everything that is battery-powered more expensive.
But most especially the much larger devices, like the REV.
And the result?
“The middle class will not be able to buy EVs,” said Tavares, bluntly. “Very simply put.” Of course. The typical middle class person doesn’t even earn $60k in a year. Much less net that sum. Federal and state taxes gyp that down to around $48,000 – leaving him about $4,000 on hand to pay his rent/mortgage – which likely cuts that sum in half, or close to it. He still hasn’t paid the utility bill or his phone bill – much less his food bill. If he is frugal, he might have $1,000 left – after he pays his fixed expenses – to pay for a car.
