{"id":302553,"date":"2024-02-18T10:16:28","date_gmt":"2024-02-18T09:16:28","guid":{"rendered":"https:\/\/climatescience.press\/?p=302553"},"modified":"2024-02-18T10:17:35","modified_gmt":"2024-02-18T09:17:35","slug":"the-six-months-that-short-circuited-the-electric-vehicle-revolution","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=302553","title":{"rendered":"The Six Months That Short-Circuited the Electric-Vehicle Revolution"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

Automakers went all in on battery power, but buyers have proven more hesitant.<\/em><\/strong><\/p>\n\n\n\n

The Michigan plant where the F-150 Lightning electric truck is built used to vibrate with excitement.<\/p>\n\n\n\n

President Biden visited in 2021 and test drove the blazing-fast pickup. Before the first ones even started rolling off the assembly line in the spring of 2022, Ford said it would expand the factory to quadruple the number it could build. The WSJ<\/a> has the story.<\/p>\n\n\n\n

That energy is rapidly fading. Ford is cutting the plant\u2019s output by half, and workers are relocating to other facilities, mostly those making gas-powered pickups and SUVs.<\/p>\n\n\n\n

The sudden change \u201cwas a little bit of a shocker,\u201d said Matthew Schulte, who inspects trucks at the factory in suburban Detroit. \u201cReality has set in.\u201d<\/p>\n\n\n\n

As recently as a year ago, automakers were struggling to meet the hot demand for electric vehicles. In a span of months, though, the dynamic flipped, leaving them hitting the brakes on what for many had been an all-out push toward an electric transformation.<\/p>\n\n\n\n

A confluence of factors had led many auto executives to see the potential for a dramatic societal shift to electric cars: government regulations, corporate climate goals, the rise of Chinese EV makers, and Tesla\u2019s stock valuation, which, at roughly $600 billion, still towers over the legacy car companies.<\/p>\n\n\n\n

But the push overlooked an important constituency: the consumer.<\/p>\n\n\n\n

Last summer, dealers began warning of unsold electric vehicles clogging their lots. Ford, General Motors, Volkswagen and others shifted from frenetic spending on EVs to delaying or downsizing some projects. Dealers who had been begging automakers to ship more EVs faster are now turning them down.<\/p>\n\n\n\n

Even Tesla Chief Executive Elon Musk warned of \u201cnotably lower\u201d growth in vehicle deliveries for the company in 2024.<\/p>\n\n\n\n

\u201cThis has been a seismic change in the last six months of last year that will rapidly sort out winners and losers in our industry,\u201d said Ford Chief Executive Jim Farley on an earnings call in early February.<\/p>\n\n\n\n

EV sales continue to grow, and auto executives say they remain committed to the technology. But many are recalibrating their plans.<\/p>\n\n\n\n

Ford has pulled back on EV investment and could delay some vehicle launches, while increasing production of hybrids, which run on both gasoline and electricity. It lost a staggering $4.7 billion last year on its battery-powered car business and projects an even bigger loss this year, in the range of $5 billion to $5.5 billion.<\/p>\n\n\n\n

Some auto executives acknowledge they got ahead of the market with overzealous demand projections. Pandemic-era supply-chain shocks and a resulting car shortage created long waiting lists and early buzz for EVs, making the industry overly optimistic.<\/p>\n\n\n\n

Only later, as a barrage of new EVs hit the market, did executives realize that car buyers were more discerning than they expected. Many were hesitant to pay a premium for a vehicle that came with compromises.<\/p>\n\n\n\n

Farley and other industry CEOs are still confident that EVs will eventually take off, albeit at a slower pace than initially envisioned. But for now, the massive miscalculation has left the industry in a bind, facing a potential glut of EVs and half-empty factories while still having to meet stricter environmental regulations globally.<\/p>\n\n\n\n

\u201cUltimately, we will follow the customer,\u201d GM Chief Executive Mary Barra told analysts this month.<\/p>\n\n\n\n

In 2020, as the car market unexpectedly heated up during pandemic lockdowns, traditional automakers shifted from dabbling in electric cars to launching an all-out blitz. They outlined plans to build dozens of battery factories, EV assembly plants and vehicle models, pledging more than a half-trillion dollars of investment in the technology through 2026, according to consulting firm AlixPartners.<\/p>\n\n\n\n

The rapid rise of Elon Musk\u2019s Tesla added to the urgency. Over just a few years, its market value rocketed past those of legacy car companies. Wall Street cheered strategic moves toward electrics and bid up shares of EV startups.<\/p>\n\n\n\n

Tougher auto-emissions restrictions in Europe and China gave car companies little choice but to add more EVs or risk penalties. The Biden administration steered the industry toward more environmentally friendly cars, earmarking hundreds of billions in subsidies for battery production, consumer tax breaks and EV chargers.<\/p>\n\n\n\n

At the start of 2023, car executives were expecting to cash in on their EV bets.<\/p>\n\n\n\n

GM\u2019s Barra had been among the earliest and most vocal industry advocates of shifting to EVs. The Detroit automaker set a goal of phasing out nearly all gas-engine vehicles by 2035.<\/p>\n\n\n\n

\u201cThis is a breakout year,\u201d Barra said on GM\u2019s January 2023 earnings call. GM was finally making its own batteries and said it was ready to start cranking out EVs to satisfy pent-up demand for a new electric Cadillac SUV and Hummer pickup truck.<\/p>\n\n\n\n

Ford, emboldened by swelling orders for the F-150 Lightning, increased prices for the pickups by as much as $20,000 over the original sticker. Elsewhere, car executives were talking up their plans to accelerate EV factory work.<\/p>\n\n\n\n

Trouble ahead<\/p>\n\n\n\n

Then warning signs began to appear. In mid-January of last year, Tesla slashed prices on some models by more than 20%, triggering a chain reaction.<\/p>\n\n\n\n

Used-car dealers who had Tesla Model 3s and Model Ys in stock saw their values plummet by thousands of dollars. Customers who had bought Teslas at higher prices were furious.<\/p>\n\n\n\n

\u201cWhy cut EV prices when demand is greater than supply?\u201d Bank of America analyst John Murphy wondered.<\/p>\n\n\n\n

Musk insisted that there was no demand problem. The company was trying to broaden appeal by making its cars more affordable, he told analysts.<\/p>\n\n\n\n

Inside Ford, staffers analyzed what Tesla\u2019s cuts might mean for its own EV sales. About two weeks later, Ford reduced prices on some versions of its Mustang Mach-E SUVs by nearly 9%.<\/p>\n\n\n\n

Speaking to analysts in May, Farley largely shrugged off the pricing pressures, saying they weren\u2019t reflective of broader interest in EVs. He remained upbeat about Ford\u2019s outlook, reiterating plans to expand Lightning output.<\/p>\n\n\n\n

Around that time, car dealer Mickey Anderson began noticing that EVs were accumulating on his lots in Kansas, Nebraska and Colorado.<\/p>\n\n\n\n

At first, Anderson and other retailers thought the slower sales were a fluke. At meetings with manufacturers in the late spring and summer, the dealers compared notes.<\/p>\n\n\n\n

\u201cWe were worried,\u201d Anderson recalled. \u201cWe went from wait lists to six months of supply, seemingly in a matter of weeks.\u201d<\/p>\n\n\n\n

Read the full story here<\/a>.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Automakers went all in on battery power, but buyers have proven more hesitant.<\/p>\n","protected":false},"author":121246920,"featured_media":302559,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"Automakers went all in on battery power, but buyers have proven more hesitant.","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691826987,691826988,691818164,691821977,691826986,691818772],"class_list":{"0":"post-302553","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-battery-factories","9":"tag-chinese-ev-makers","10":"tag-climate-goals","11":"tag-electric-vehicles-evs","12":"tag-government-regulations","13":"tag-u-s-president-joe-biden","15":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/02\/0pondering-power-plan-massive-ev-adoption-1200628px.jpg?fit=1200%2C628&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1gHT","jetpack-related-posts":[{"id":418670,"url":"https:\/\/climatescience.press\/?p=418670","url_meta":{"origin":302553,"position":0},"title":"U.S. Automakers Pull Back from Electric Vehicles","author":"uwe.roland.gross","date":"26\/12\/2025","format":false,"excerpt":"The U.S. automotive market is experiencing a significant shift as companies like Ford, GM, and Stellantis adjust their strategies in response to changing consumer demands and regulatory environments. 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