Dealers have been warning of slowing EV demand, growing inventory and dropping sales for months. Several of the auto bigwigs at some of the biggest carmakers expressed discomfort about the "robocars" market's growth as concerns over the viability of these vehicles put their multi-billion-dollar electrification strategies at risk.
Historically, one of the auto industry's most bullish CEOs on the future of electric vehicles is General Motors' (GM's) Mary Barra. She is one of the executives who expressed concern about the recently made unstable industry. GM has been an early-mover in the electric car market, selling the Chevrolet Bolt for seven years and making bold claims about a fully electric future for the company long before its competitors got on board. During the third-quarter earnings call, Barra announced with its quarterly results that GM is abandoning its targets to build 100,000 EVs in the second half of this year and another 400,000 by the first six months of 2024. GM doesn't know when it will hit those targets. "As we get further into the transformation to EV, it's a bit bumpy," Barra said.
Meanwhile, the Detroit car company is not alone in this new view of what lies ahead for the electric cars' future. Even Big Tech mogul Elon Musk of Tesla warned during a recent earnings call that economic concerns would lead to waning vehicle demand, even for the long-time EV market leader. Also, Mercedes-Benz is having to discount its EVs by several thousand dollars just to get them in customers' hands. MB also went brutally frank about what was happening. "This is a pretty brutal space," CFO Harald Wilhelm said on an analyst call. "I can hardly imagine the current status quo is fully sustainable for everybody."
Moreover, reports confirmed that almost all current EV product is going for under sticker price these days, and on top of that, some EVs are seeing manufacturer's incentives of nearly 10 percent. "That's as inventory builds up at dealerships, much to the chagrin of dealers. While car buyers are in luck if they're looking for a deal on a plug-in vehicle, executives are finding even significant markdowns and discounts aren't enough. These cars are taking dealers longer to sell compared with their gas counterparts as the next wave of buyers focus on cost, infrastructure challenges and lifestyle barriers to adopting," Insider reported.
"After studying this for a year, we decided that this would be difficult as a business, so at the moment we are ending development of an affordable EV," Honda CEO Toshihiro Mibe said in an interview with Bloomberg. For Toyota Motor Chairman Akio Toyoda, people are finally seeing reality. He has long been skeptical of his peers' pure-electric blueprints. (Related: Member of Biden's "green team" admits EVs are NOT sustainable.)
Realizing that their efforts may go down the drain, Ford was the first to fold. It is postponing its $12 billion EV factory projects, including a planned battery factory in Kentucky.
According to Ford, customers were unwilling to pay extra for its EVs because they were no longer affordable. The auto manufacturer continues to lose money according to reports. Around $1.3 billion this past quarter in adjusted earnings went into thin air. This year, Ford has lost $3.1 billion on EV spending and said it’s going to lose a total of $4 billion for the year.
Meanwhile, the company reached a tentative agreement with the United Auto Workers last week, being the first of the Big Three United States automakers to get a deal. The strike cost it around $1.3 billion, and the company pulled its guidance for 2023, meaning it is not confident it can hit the targets it laid out earlier in the year.
Back in July, Ford extended its self-imposed deadline to hit annual EV production of 600,000 by a year and abandoned a 2026 target to build two million EVs.
Check out updates on the Biden administration's adamant drive to switch from gas vehicles to EVs to "save the earth" at GreenTyranny.news.