Automakers Forgot To Charge Their EV Batteries Going Into 2023
The outlook for electric vehicles is looking increasingly polluted, and companies are having second thoughts about their big investments. In October, General Motors (NYSE:GM) postponed retrofitting a $4B factory to scale construction of its new electric pickups — while Ford (NYSE:F) also delayed $12B in EV manufacturing investments last week. This will help both companies save billions, but weaker EV demand could impact whether the expansions will happen at all:
- Despite Ford’s EV shipments rising 44% YoY in Q3, the company lost $1.3B, even as it rolled out Tesla-esque incentives meant to drive skeptical buyers.
- Just 3% of the vehicles that GM delivered in Q3 were EVs — a sign of how insignificant it may be to its overall business performance.
Ford claims that customers in North America are “no longer willing” to pay a premium for an EV, which could be a result of high-interest rates, but might also be from intensifying competition — where Tesla’s cheapest vehicle is still superior in range and cost (CNBC).
The EV culture wars
This just in: apparently, most people don’t want to shell out $43K for a vehicle with 312 miles of range — even with discounts, incentives and tax benefits. But it’s not just competition; the majority of Americans simply don’t trust that electric is ready for primetime:
- 50% of US adults don’t see themselves as likely EV buyers, a figure which has risen since last year, according to Pew Research — mostly blaming the lack of EV infrastructure.
- Support for phasing out new gas vehicles by 2035 has also fallen from 47% in Apr. 2021 to 40% in June 2023 — with more negative views held about EVs by certain politically inclined groups.
Sitting this one out: It’s not just automakers and consumers feeling the EV blues. Hertz (NASDAQ:HTZ) is pulling back on a plan to purchase 100K Teslas by 2022. So far, they’ve only purchased ~35K, citing Tesla’s price cuts impacting their resale prices and high cost of repairs. Last week, Honda also scrapped their plans to build cheap EVs with GM — and it’s unlikely these will be the last to go.