{"id":6480,"date":"2023-10-28T19:02:25","date_gmt":"2023-10-28T19:02:25","guid":{"rendered":"https:\/\/infundpros.com\/business\/the-early-adopters-have-adopted-us-carmakers-slow-their-ev-growth-plans\/"},"modified":"2023-10-28T19:02:25","modified_gmt":"2023-10-28T19:02:25","slug":"the-early-adopters-have-adopted-us-carmakers-slow-their-ev-growth-plans","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6480","title":{"rendered":"\u2018The early adopters have adopted\u2019: US carmakers slow their EV growth plans"},"content":{"rendered":"
\n

US carmakers are pausing plans to expand their electric vehicle manufacturing capacity, as consumers buy battery-powered cars and trucks at slower rates than expected. <\/p>\n

Ford, General Motors and Tesla have all pumped the brakes on expanding EV production capacity in recent weeks. GM will delay building electrified versions of its Chevrolet Silverado and GMC Sierra pick-up trucks at a Michigan plant until 2025, instead of next year. Tesla chief executive Elon Musk said his company was studying macroeconomic conditions \u201cbefore we go full tilt\u201d to open a factory in Mexico.<\/p>\n

Ford, which recorded a $1.3bn loss in its electric vehicle division in the third quarter, is now waiting to invest about $12bn to build out EV production capacity. That includes cutting some production of the Mustang Mach-E and delaying construction on one of two joint-venture battery plants planned in the state of Kentucky.<\/p>\n

\u201cThe narrative has taken over that EVs aren\u2019t growing,\u201d Ford chief financial officer John Lawler said this week. \u201cThey\u2019re growing\u2009.\u2009.\u2009.\u2009It\u2019s just growing at a slower pace than the industry, and quite frankly, we, expected.\u201d <\/p>\n

Softer demand means Ford needs \u201cless capacity in certain areas in the near term, and so we\u2019ll push out that investment until the time we need to put that capacity in place\u201d, Lawler said.<\/p>\n

Tesla was founded as an EV company and has said it wants to sell 20mn vehicles a year in 2030, a more than tenfold rise in output. GM plans to sell 1mn EVs a year by the end of 2025 and Ford has set a target of 600,000 in 2024. <\/p>\n

Anxieties over electric vehicle manufacturing \u2014 which requires fewer workers than making internal combustion cars \u2014 have featured prominently in contract talks with the United Auto Workers union, which went on strike against Ford, GM and Stellantis last month and agreed a tentative deal with Ford this week. <\/p>\n

A record 313,000 electric vehicles were sold in the US in the third quarter, according to data group Cox Automotive. Electric cars climbed to 7.9 per cent of total industry sales in the third quarter, up from 6.1 per cent a year ago, Cox Automotive found.<\/p>\n

Even so, the pace of growth is slowing. Year-on-year sales growth for the third quarters of 2021 and 2022 was about 75 per cent; this year the increase was a comparatively cooler 50 per cent, according to Kelley Blue Book, a research company owned by Cox Automotive.<\/p>\n

<\/source><\/source>\"Column<\/picture><\/figure>\n

EVs are also lingering longer on dealership lots. Dealers are taking 88 days to sell their entire supply of electrified cars and trucks, compared to 39 days in October 2022, according to Cox. Petrol-powered vehicles, by contrast, are selling in 60 days.<\/p>\n

Only one-third of US consumers say the next car or truck they buy is likely to be electric, according to a survey from Yahoo Finance\/Ipsos. The most common concerns were charging infrastructure, driving range and the expense of EVs compared to cars with combustion engines.<\/p>\n

\u201cIt feels like the early adopters have adopted,\u201d said Fitch ratings analyst Steve Brown. \u201cNow it\u2019s shifting to a point where it needs to get to a more mainstream consumer, and for a variety of reasons, it seems like mainstream consumers are more hesitant.\u201d<\/p>\n

Pricing is a key factor. The Joe Biden administration\u2019s Inflation Reduction Act, which sought to stimulate domestic EV production, has narrowed the number of EVs eligible for a $7,500 tax credit to models that meet thresholds for assembly and component sourcing in the US. The credit is meant to make the vehicles more affordable, and from next year buyers can receive it at the point of sale, rather than waiting to file their tax returns. <\/p>\n

Electric vehicles have typically been more expensive than cars with traditional engines, but price cuts at Tesla earlier this year \u201chave moved the market\u201d, according to Kelley Blue Book. The average transaction price for a new vehicle last month was about $47,900. The price for an electric vehicle averaged $50,700 \u2014 down 22 per cent from a year earlier.<\/p>\n

Still, Musk said high interest rates were hurting demand for the company\u2019s cars as they swelled owners\u2019 monthly car payments. The company delivered fewer vehicles in the third quarter than Wall Street expected.<\/p>\n

The roughly 50 electric models selling in the US right now \u2014 of which 14 qualify for the full tax credit \u2014 are priced similarly, with no distinction between mainstream or luxury, car or truck, said Tyson Jominy, JD Power\u2019s vice-president of data and analytics. Roughly another 30 were scheduled to come to market next year.<\/p>\n

\u201cThe market cannot absorb all these entries,\u201d Jominy said, adding that there were \u201ctoo many entries fighting for too few sales at that same price point\u201d.<\/p>\n

GM chief executive Mary Barra said this week that \u201cmoderating the pace of our EV acceleration\u201d would allow the company to maintain strong pricing.<\/p>\n

But executives at Ford said they expected to see the premium commanded by EVs to fade. There was \u201ctremendous\u201d pricing pressure in electric vehicles right now, Lawler said, and \u201cgoing forward, it\u2019s really a cost game in EVs\u201d.<\/p>\n

It is not unusual for adoption of new technologies to plateau, and some states, such as Colorado, have had no slowdown, said Nick Nigro, founder of consultancy Atlas Public Policy. Slowing sales nationally is \u201cnot an indicator that the market is struggling, but the industry is making clear that they need to see greater consumer demand in order to turn the spigots back on\u201d. <\/p>\n

One industry expert echoed that point, saying demand for EVs is still good, but the supply is better.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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