The domestically owned OEM automotive industry is doomed by economic illiteracy in general and a complete lack of understanding, in particular, of the economics of what political elites and the new growing class of industrial elites refer to as "working families," as the political mantra is frequently cited. "History doesn't repeat itself, but it often rhymes," was said by Mark Twain. When oil was less than $2 per barrel (“bbl”) in the 1960s, I heard of General Motors (NYSE: A GM executive stated, "'We' predict that the domestic American auto market will be 28 million cars in 2000, and we are preparing for that." Note: 17.8 million brand-new cars and trucks were sold in 2000.) In the distant past, the three major American OEM automakers were vertically integrated and held 99% of the domestic market. As a result, they designed and constructed a large number of assembly and component plants. In both the past and the present, nobody in Detroit gave fuel a second thought. Cars and trucks were made by them. The oil business could deal with finding, creating, refining, and conveying "fuel." Purdue and the General Engines Foundation delivered each of the architects that GM could at any point require, and nobody at GM even knew whether both of those establishments had oilfield designing or oil refining courses.. The requirements for fuel were set by car manufacturers, and the oil industry was responsible for producing the goods. First Fuel Emergency - 1972 Middle Easterner Oil Ban In 1972, the Middle Easterner Oil Ban hit and unexpectedly asset patriotism, albeit not called that then, at that point, hit the American OEM car industry like a block facade. I'll refer to this sequence of events as the "First Fuel Crisis." Even with freight from the Persian Gulf, oil from the Middle East was so much cheaper than domestic oil that there was little point in increasing domestic production up until 1972. American oil production had not even come close to meeting domestic demand. Except for the West Coast, which was too far from the Middle East for transportation to be cost-effective, and southern California, which was covered in pyramidal structures that were actually producing oil wells, the rest of the country was inaccessible. At the point when I lived in Los Angeles in the last part of the 1960s, I gave no consideration to these designs which were normal along the coast. The OEM automotive industry in the United States was shocked by what was referred to as the "Arab" oil embargo. Prior to that point, muscle cars were more important than fuel efficiency. When Crisis Meets Opportunity, Asian and Western European automobile manufacturers were able to capitalize on the opportunity provided by the oil shock and its accompanying rise in fuel prices for their economically devastated postwar populations. Japanese automakers were making inroads into the US market by the end of the 1970s. However, they were not really ready for the US market and were poorly designed. However, due to their low cost, young people rushed to buy them. U.S. homegrown vehicle creators laughed at "Japanese garbage," however the Japanese were fast students and they quickly worked on their items, yet they kept the costs low with the goal that they were "purchasing" portion of the overall industry. American unofficial laws started to weigh vigorously on OEM costs. First, there were safety requirements (Unsafe at Any Speed), then there was a requirement for a catalytic converter out of concern for air pollution, and then there was competition and skyrocketing fuel costs that required engineering improvements, which reduced margins. The Koreans bought market share in the same way the Japanese did when they first entered the American market. In addition, as the economies of Japan and Korea grew rapidly and even automation was unable to control manufacturing costs in their home countries, both nations began constructing assembly and even parts plants in the United States (as well as Europe, Canada, and Mexico). Indeed, even the Germans joined the transition to gather vehicles in the USA and their stockpile bases before long followed. In the 1990s, domestic American OEMs abandoned vertical integration in the belief that just-in-time manufacturing was more effective when they did not control their supply chains. China's vertically integrated EV supply chain At the same time, a rough beast was moving toward America—not the Chinese OEM automotive assembly industry, but the Chinese total control of OEM industries' supply chains. Fossil-fueled vehicles were used in China's automobile industry at first, but this soon led to more air pollution in the cities, where steel factories already polluted the air. China observed as a young South African immigrant to the United States revived the battery-powered, chemical-free electric car after making his first fortune in the online bill-paying industry. Elon Musk constrained the worldwide vehicle making industry to view at the lithium-particle battery as the right innovation to support a mass-producible, electric-fueled vehicle at last. China made an asset security and asset handling adequacy based modern strategy to help its entrance into electric vehicle ("EV") improvement and assembling from the very beginning of its entrance into the large scale manufacturing of this innovation. The original equipment manufacturer (OEM) automotive industry in the United States and Europe, which abandoned vertical integration in favor of outsourced just-in-time delivery at the same time that China, as a nation, moved in the opposite direction to support its fledgling automotive industry for fossil-fueled and, more importantly, battery-powered EVs, has ignored these measures up until this point. China now has dominance or complete control over all of the crucial minerals and their processing into end-user forms to support the world's largest fossil fuel and electric vehicle industry as a result of these policies, which have been developed and implemented over the past 15 years. China's domestic electric power grid has simultaneously supported the supply of electricity for charging its domestic fleet of "new energy" cars, trucks, and buses, which is the largest in the world and is expanding at the fastest rate. No other country has embraced such a gigantic and far reaching support program for an OEM car industry change of force trains from petroleum derivatives to power. Second Fuel Crisis: Essential Minerals and Metals for Batteries The second Fuel Crisis has thus impacted the non-Chinese automobile industry even more severely than the Arab oil embargo. Production of natural resources is limited. They are not natural resources that reproduce themselves. Rare or secondary, or byproducts of the production of other metals, are the metals and metalloids that are absolutely necessary for the production of the most efficient electric motors, miniaturized electronic switches and controls (also known as chips), and the key components of batteries. Because capital and capital allocation are also not infinite resources, the main issue with producing them is cost. When developing those systems, the controlled production, distribution, and storage of electricity required to "fuel" battery-powered electric vehicles were never considered. People who don't know much about electrical engineering shouldn't just assume that the systems can handle a lot of irregular demand without incurring additional costs, if any. It is too much that anybody expects that the emerging countries will focus on electric vehicles over electric lights as they construct their homegrown creation and dispersion frameworks for electric power, so obviously electric vehicles will stay a plan thing of just the created countries and afterward just for such a long time as power is reasonable. The present OEM auto industry could never consider changing over away from non-renewable energy sources in the event that it were not for legislative commands, themselves in light of a questionable environmental change plan, making the assembling and offer of fossil-powered vehicles restrictively costly. The American OEM automotive industry can only survive paradoxically by continuing to sell SUVs, pickup trucks, cargo vans, freight trucks, and the largest fossil-fuel vehicles, as long as government grants and subsidies for electric vehicles and new manufacturing facilities continue. Where is the "gas" station for my electric vehicle? But back to fuel production and distribution. When it comes to the rebuilding and repowering of the electrical distribution grid that is required to accommodate the addition of tens of millions of electric vehicles that require charging at random times across the five time zones that comprise the United States, the unelected bureaucrats and academics who implement the policies that are prescribed by elected politicians remain silent. This is because the US economy isn't big enough to pay for such a big project and keep pushing its climate crisis agenda and huge "entitlement" system. According to studies, in order to accommodate EV charging, the electricity-transmitting capacity that supplies power to EV-owning households needs to increase by 70 to 130 percent. By 2030, the national cost of upgrading the electrical grid to meet this demand could range anywhere from $10 to $25 billion. Additionally, the total investment could range anywhere from $75 to $125 billion when you factor in the additional costs associated with EV chargers, customer-side infrastructure, and electrical generation and storage. Even though EV users are likely to bring in more money for utilities, it may not be enough to cover all of the extra costs in the electric power supply chain. The genuine emergency of on-request electric fuel is that it is an inconceivable objective assuming the flow American way of life and personal satisfaction are to be kept up with. Contrary to what the priesthood of climate change preaches, critical minerals do not exist in an endless supply, and even the processing of what we can produce or obtain from them is no longer possible in the United States. A non-catastrophic, slow-motion collapse of the US cheap-energy-based economy cannot be addressed by the disorganized US government or OEM industries. As Washington's ignorant pronouncements take the place of market-based economics, printing money has only accelerated the decline of American manufacturing. Farewell American OEMs, it is short of what was needed The arbitrary moves by OEM car to change its exceptionally old acquirement framework to perceive complete stock chains over prompt providers have brought about the turbulent allotment of cash to high-risk (otherwise known as, problematic) and ineffectively chose place-holders in all out supply chains for basic minerals as well as for their refining and end-client manufacture sellers. Just those OEMs that have picked shrewdly will get by, and they will be just those that make a blend of vehicles utilizing the two sorts of fuel, fossil and electric. Their bankruptcy trustees will hold an auction for the remaining expensive electric vehicle inventory that has not been sold. North America is where about 20% of the world's annual vehicle production is assembled. However, as the graph below demonstrates, the United States only possesses 6% of the global battery-making capacity. The fact that the United States only has 4% of the world's lithium production capacity is even more troubling. Neither success nor the continued existence of an industry can be predicted using this approach.
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