Electric vehicles face reality check as automakers dial back production targets
The tentative deals that brought an end to the 6-week strike by the United Auto Workers could bring collective bargaining power to workers at new electric battery plants jointly owned by the automakers. But the deals could also make electric vehicles even less profitable for the companies at a time when sales aren’t quite going as planned.
Electric vehicle sales have been growing — just not as as quickly as hoped, per Guidehouse Insights analyst Sam Abuelsamid.
“A lot of the projections that automakers talked about were pretty optimistic,” he said.
And now, many are dialing them back. GM is scrapping its target of producing about half a million new EVs by the middle of next year, Ford extended its timeline to hit a goal of 600,000 EVs a year, and even Tesla sees demand softening.
Electric cars are a harder sell, in part, because of prices, said Abuelsamid. “It’s actually become somewhat more of an issue in the past year or so, even though prices of a lot of EVs have come down.“
Fewer models are eligible for full EV tax credits under the terms of the Inflation Reduction Act, and car loans have higher interest rates. That makes it harder to reach mainstream consumers, said Michelle Krebs at Cox Automotive.
“Early on, the EVs were purchased by affluent technology adopters, and we’ve kind of run through those,” she said.
Not everyone owns a home where they can install a charger — like Matt Wheeler. He just paid off his Volkswagen Jetta and had been considering an electric car for his next purchase.
“It made it seem like it’s not the right decision for me at this time, even though in an ideal world I’d love to make it,” he said.
Wheeler lives in an apartment, parks on the street and isn’t sure he can depend on public charging where he lives in Providence, Rhode Island.
While charging infrastructure has expanded, it’s still not exactly reliable in many places, said Ethan Elkind, director of the Climate Program at UC Berkeley’s Center for Law, Energy and the Environment.
“I think some of that is a victim of the success we’ve had with EV uptake, and so the chargers are getting more used,” he said. “And the more they’re used, the more they’re going to break down.”
Billions in federal funding for charging infrastructure — plus a move by Tesla to open up its charging network — should help ease these growing pains, he added.