Are EV sales waning?
Why are major makers pulling back
The electric vehicle future promised by some of America’s biggest carmakers has hit a big speed bump on the road. The latest reverberation came just days ago when Ford announced it is cutting production of its electric truck, the F-150 Lightning.
The Lightning is the best selling electric truck in the country, with sales up 55% last year. Still, Ford says demand is slowing, so it’s slowing production. That follows GM announcing in October that it is delaying converting a factory to make electric vehicles for about a year because of lower demand. There was more. Rental car company Hertz says it is selling 20,000 EVs, a third of its fleet, to “better balance supply against expected demand for EVs.”
All those moves suggest that demand for EVs is waning. But is that really what is happening?
The association that represents automakers says for the first three quarters of last year more than 1 million EVs were sold. That was just a bit less than one in ten vehicles sold in the US and was up 12% from the same period last year.
Waning vs. Predictions
The predictions for this year don’t suggest EVs sales will hit a pothole. In fact, the prognostications for the coming year suggest there will be even more EVs on the road. S&P Global Mobility says 9.6 million EVs were sold worldwide last year and that number will rise to 13.3 million this year. The company says, “Reports of the demise of electric vehicles have been greatly exaggerated.” Bloomberg NEF agrees suggesting that global EV sales will increase 20% this year. That is a slowdown from the growth rate of 33% last year, but still 20% growth is nothing to sneeze at.
In the US this is probably a story of expectations versus reality. GM and Ford went in big for EVs with aggressive predictions of the number of vehicles they would sell and even setting a date for going all-electric.
There have been plenty of roadblocks. Those include pandemic supply chain issues, a shortage of rare earth minerals for batteries, a labor strike, and the inability to produce an inexpensive EV. The charging infrastructure in the US is still a drag on adoption of EVs, according to the automakers.
On the ground
What does it look like on the ground at US dealerships? “Still robust,” says Mike Walker, the General Manager of BMW of Fairfax serving the Washington DC area. Walker is selling luxury cars and the incentives and government subsides make a difference. He believes BMW stayed steady as it introduced its electric vehicles while others may have been racing. “I think if you go back a year, year and a half, that trajectory and what folks were predicting, I'm not so sure that it is going to pan out…It might have been a little bit aggressive.”
As with other brands BMW is offering hybrid models. In the US, with the concerns about range and charging capabilities, hybrids have been big sellers.
As with any transition, a major transformation from one technology to another, the chicken and egg question arises. Do consumers want an EV if there aren’t enough charging stations? Will they wait for the infrastructure to catch up and instead buy a gas power vehicle or a hybrid in the interim?
The Biden Administration has made EV adoption a major part of its agenda. There seems to be a bit of concern in the executive branch that the pullback by automakers may blunt the EV transition. The Energy Department issued a statement trying to turn the debate. Just last week, the White House issued a release touting, “new actions.” The only thing new here is that executive departments continue to roll out rules and requirements for infrastructure money to build out charging stations. That money was approved by Congress in November of 2021.
EV sales will increase this year. So will the number of chargers. It may not all be smooth and seamless. What does the long term future hold?
Decision maker
Mike Walker at the BMW dealership has learned a lesson during his years selling cars. “The decisions I've seen consumers make when there's a spike in gas, it's remarkable what it does to the psyche. There's almost nothing like a spike in the price of a gallon of gas to just completely change somebody's behavior.”
The automakers may have gotten the demand wrong in the short-term and are still having trouble producing that inexpensive EV. Bloomberg NEF believes while this year may be a pause in demand and growth, battery technology is improving, charging stations are being installed and that is, “paving the way for further growth in 2025 and 2026, when a slew of cheaper models is set to hit Western markets.”
Waning or worth the wait?
Interview and more with Mike Walker the General Manager of BMW of Fairfax.
Kind of like saying we think the stock market will hit 40,000 in 2023 and, oh crap it only hit 34,000. Wow! Nobody's investing anymore ... NOT. EVs will be fine. Just keep the fascists out of office and maybe get the Kochs to invest in some in new energy instead of insisting that we kill the planet to maintain their fossil fuel profits.
It would be a perfect time to invest in the infrastructure of EV Charging Stations!
Oil companies are the ones who could be taking advantage of the opportunities involved with this potentially lucrative addition to services they already provide.
They have infrastructure in place could be modified or expanded! Instead of being blindsided by a changing need they could be on the forefront!
Eastman Kodak should have done the same when they first developed digital cameras but they got into it too late to really take advantage of it to be a digital leader in their industry!