There are troubling signs on the horizon for West Michigan, with sharp declines in key metrics Grand Valley State University uses to gauge the economy.

Brian Long, director of supply management research at GVSU’s Seidman College of Business, told GVNext the June results of a monthly survey of local business spells bad news for the EV industry and the companies that rely on it.

“New orders, our index of business improvement, dropped to its lowest level in six months,” Long said. “Of course, this means over the longer term, production is going to drop. Now, one month’s drop does not constitute a trend but we’re going to have to watch next month’s numbers very closely.”

In addition to new orders, a purchases index saw a similar decline, which Long attributed to firms increasing inventories amid supply chain issues a few months ago. There’s now a backlog of electric vehicles in dealer lots, an issue that’s expected to have a ripple effect on local manufacturers, according to the college news site.

“West Michigan’s largest cyclical industry is automotive, and we don’t assemble cars in West Michigan, but we have numerous firms that produce components and complete assemblies like seats and dashboards, MacPherson struts and those kinds of things,” Long said. “Especially for the firms that are supplying EVs, the news of the dealer lots starting to fill with an overflow of EVs is certainly not good news.”

The survey results are just the latest evidence that Gov. Gretchen Whitmer’s all-in approach on EVs could be a bad bet for taxpayers.

Last week, the Michigan Economic Development Corporation’s Strategic Fund Board cut over $1 billion in taxpayer subsidies for a Ford-CATL electric vehicle battery plant in Marshall by 60%, following the automaker’s decision to downsize the facility.

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The board voted unanimously last Tuesday to cut a $210 million grant to create 2,500 jobs to between $141 million and $166 million, depending on revised plans by Ford to reduce jobs to between 1,700 and 2,100, Bridge Michigan reports.

The board also voted to eliminate a $772.8 million tax abatement, and impose $172.6 million in increased state education taxes.

While Ford is proceeding with scaled down plans, reducing its investment from $3.5 billion by about $1 billion, the company lost $4.7 billion on EVs in 2023.

During the first quarter of 2024, Ford sold 10,000 electric vehicles, losing $132,000 on each, according to the data.

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Those losses came amid signs EV sales are slowing.

Tim Nash, auto expert and director of McNair Center, told WWMT last week an underwhelming 7% of vehicles sold in the U.S. last year were electric.

“This year, the numbers are slowing,” he said. “We are running on an annualized rate of 6.8%, so that is a decline in electric vehicles overall.”

Many of those folks who purchased EVs now regret it, according to a survey of 30,000 released by McKinsey & Co. last month that found 46% of EV users would likely return to internal combustion vehicles.

There’s also issues with Michigan EV incentive deals involving nondisclosure agreements with companies tied to the Chinese Communist Party, slave labor in the supply chain, environmental and national security concerns, and public resistance to the government-imposed transition to EVs.

Thorough the first quarter of 2024, Michigan had 46,792 registered EVs, accounting for 2% of Whitmers goal of 2 million EVs on the roads in the Great Lakes State by 2030. The situation means Michigan needs to register about 29,000 EVs per month for the next 67 months to fulfill Whitmer’s wishes.

Whitmer and her Democratic allies in the legislature have approved more than $2 billion in taxpayer subsidies for the EV industry, spending the administration expects to produce 12,000 jobs.

With $1 billion already spent, a Bridge Michigan analysis found only 200 jobs had been created through mid-June.