President Joe Biden’s gesture in support of the United Auto Workers may have inadvertently undermined one of the administration’s climate policy goals. Ford and General Motors have announced plans to scale back future investments in electric vehicle production due to the higher labor costs created by the new union contract. The new labor contract will cost Ford $8.8 billion through 2028 and add about $900 to the cost of each new vehicle. Ford has also announced plans to postpone about $12 billion in planned investments in EV production. GM’s new labor costs will total about $9.3 billion over the life of the UAW contract, and the company is planning to “fully offset the incremental costs of our new labor agreements.” The trade-off between higher labor costs and the transition to EVs is evident, with established companies hemorrhaging money on the transition despite government subsidies. The math is irrefutable, with Ford and GM incurring significant losses on EVs and looking to cut unprofitable projects in the face of higher labor costs. This situation mirrors the Biden administration’s mistake with solar panels, as increased subsidies for rooftop solar panel installation have been limited by high tariffs on imported solar panels and component parts. Trade-offs exist, even if you’re unwilling to acknowledge them.