“The global auto industry continues to experience a period of significant disruption as it moves toward electrified mobility,” Ford said Wednesday. “The transformation is particularly intense in Europe where automakers face significant competitive and economic headwinds while tackling a misalignment of CO2 regulations and consumer demand for electrified vehicles.

Demand for electric vehicles is slowing in both Europe and the United States, despite significant subsidies and mandates. European emissions regulations are forcing manufacturers to produce increasing numbers of electric vehicles. Such mandates and Chinese imports have led to a glut of electric vehicles and mounting losses for automakers.

Volkswagen announced plans last month to close at least three German factories, cut wages and cut thousands of jobs. This is the case for car manufacturers who are asking for government support. Ford said last week that Europe needs more “public investment in charging infrastructure” and “meaningful incentives to help consumers make the switch.”

Public “investments” have not helped Northvolt much, which Brussels has tried to present as a local competitor to Tesla, China’s CATL and South Korea’s LG Chem and Samsung. European governments have backed a $5 billion loan to allow Northvolt to expand a Swedish factory. The CEO of Northvolt at the time called this agreement a “milestone for the European energy transition”.

Northvolt repeatedly encountered production problems, prompting BMW to cancel an order in June. The drop in demand for electric vehicles meant there would be no new orders. The bankruptcy filing will sting Northvolt’s investors, including Volkswagen, BMW and Danish and Canadian pension funds.

Layoffs in the automotive sector in Europe and the failure of Northvolt are warnings for the United States. The nation’s auto industry sent a letter to Donald Trump last week urging him not to cut “incentives” for electric vehicles, their euphemism for taxpayer subsidies. Biden imposes some regulatory flexibility because they have invested massively to comply with them. Competitors like Toyota have been smarter and invested more in the hybrid vehicles that consumers seem to prefer.

Green industrial policies are failing in Europe and the United States, at the cost of huge costs to taxpayers and misallocated investments. The Trump administration has an opportunity to correct these mistakes.