There is a somewhat disturbing trend in the auto industry right now. Some of the traditional automakers are Sudden weakening The Electrification Accelerator was introduced in response to a perceived slowdown in interest and sales of EVs.
Whether the slowdown is real or simply growing pains, the result is the same: Automakers are responding. Major manufacturers are backing away from their once aggressive timelines for full electric vehicles, and what was supposed to be a mostly electric transportation fleet by the end of the decade now looks set to be a similar situation.
To be honest, progress is still being made. EV Sales are increasing overalland a transition away from the internal combustion engine and its associated carbon dioxide emissions. It’s happeningHowever, the momentum has been somewhat weaker than initially expected.
Which automakers are backing away from EV targets?
Ford, America’s best-selling automaker, is one of the most recent and highest-profile manufacturers to change its electrification plans. The company said in 2021 that, at least in Europe, it would have all its models with fully electric options by 2026, and a fully electric portfolio by 2030. An electric three-row SUV is scheduled to go on sale in 2025.
The deadline for that SUV Shifted Earlier this year, Ford President and CEO Jim Farley announced Ford’s EV plan through 2027, saying the company is “focused on growing our profitable EV business, using our capital wisely and bringing the right gasoline, hybrid and all-electric vehicles to market at the right time.”
However, in late August Change againThe three-row SUV has been indefinitely delayed, and delivery dates for two electric trucks have been pushed back, while Ford Sliced to pieces The EV development budget has been cut by approximately $12 billion.
Mercedes-Benz has similarly aggressive goals for 2021, including plans to invest 40 billion euros ($44 billion) to make half its sales electric by 2025.
Now, with just a year to go until that milestone, the goal has changed: The company aims to be half electric by 2030, but only “when market conditions allow,” with a big disclaimer. The company hasn’t been specific about its goal, but notes that less than 7% of its U.S. sales are EVs, EdmundsIt’s hard to imagine that market meeting the fertile conditions the company defines.
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German car giant Volkswagen recently backed off on plans to build six battery factories around the world, and the company now says the three it has already announced may be enough to meet demand through 2030.
“The expansion of the factory depends on the development of the market for electric vehicles,” said VW’s chief technology officer Thomas Schmall. Frankfurter Allgemeine Zeitung newspaper.
Volvo is also on the list of automakers that made big EV promises in 2021. The company vowed to be a “fully electric vehicle company by 2030.” Since then, it’s released some compelling EVs and tried to release a few more that struggled to get to market. These include some interesting and affordable EVs. EX30 CrossoverCaught in the crossfire of Chinese EV import tariffs, large electric vehicles won’t arrive in North America until 2025. Luxurious 3-row EX90After software-related delays, production is finally starting.
CEO Jim Rowan further emphasized Volvo’s ambitious goal in May, saying the 2030 target was “a very achievable future.” But on an investor call a few weeks later, he said, “Our plug-in hybrids and mild hybrids continue to perform very well and are popular with our customers, and we will continue to invest in this lineup.”
So while Volvo has yet to officially announce a relaxation of its targets, it certainly seems on track to do so.
Why are automakers putting the brakes on EVs?
The main reason manufacturers cite for scaling back is the realization that the uptake of EVs has been a little slower than expected.
This one is a bit difficult to interpret, as there are conflicting numbers. On the one hand, looking at the US numbers, Ford’s EV sales increased 61% quarter-over-quarter, while BMW’s EV sales increased by around 25%. However, the outlook for other brands is less rosy. For example, Mercedes-Benz’s EV sales were down 25% year-over-year in Q2, while Volkswagen’s EV sales were roughly flat.
But overall, U.S. EV sales in the second quarter of 2024 increased by more than 11% year-over-year and 23% quarter-over-quarter. Cox AutomotiveAccording to New Automotive’s Global Electric Vehicle TrackerThe U.S. market outpaced the global EV market, which grew 19 percent in the first quarter.
Recognizing that EVs are a big leap for American consumers, hybrids Especially the plug-in type — Manufacturers are once again looking at it as a gateway to full electrification.
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Is this valid? Decarbonization The strategy is controversial. Hybrids add complexity and weight to already complex internal combustion vehicles. Of course, they promise efficiency gains. But International Clean Transportation Council They found that because most people don’t charge their PHEVs, overall emissions are significantly higher than the EPA estimates, more than 67 percent worse.
For Ford, at least, a renewed focus on cost has been a major driver of the company’s recent EV rollback. That makes sense: When many brands were making bold statements in the early 2020s about going EV-only, the expectation was that battery costs would come down dramatically as manufacturing scaled up.
Unfortunately, that didn’t happen.
If there’s one common mistake among automakers, policymakers and everyday consumers, it’s the tendency to believe that once EVs hit the market, they’ll basically sell. Auto industry executives made no effort to temper those expectations, and they got caught up in the excitement themselves.
Unfortunately, consumers, especially in the United States, I need a little more convincing.Local and federal governments continue to Terrible job The goal is to build an accessible, reliable, nationwide EV charging network. EV Tax Credit in Curbing Inflation Act That might help a little, but the reality is that most EVs on the market It will be quite expensive It’s harder to sell EVs than comparable gasoline-powered cars, and as long as that remains the case, EV sales will continue to be tough.
Many expected EV sales to surge soon, so the slowdown in growth could be seen as a setback, but the key point is that slower-than-expected growth is still growth: even if sales aren’t growing exponentially, there are more EVs being sold than ever before.
It took more than 20 years for leaded gasoline to be phased out in the U.S. market, but that change is nothing compared to what’s happening here. The fact that automakers have backed away from aggressive timelines isn’t evidence that EVs were a failed experiment; it’s just that consumer sentiment sometimes moves a little slower than technology.
