A flurry of headlines this week confirms: the electric vehicle (EV) transition is decelerating.
On Monday, Porsche poured cold water on its transition to EVs, saying in a statement that the “transition to electric cars is taking longer than we thought five years ago”. Then, yesterday, General Motors said it would delay plans for its Buick EV and postpone a new electric factory in Michigan, before Tesla revealed a 45% slump in profits, facing slower demand (although the company did report significant growth in its energy generation and storage business).
Battery low
These latest delays follow similar decisions at Ford, Nissan, Volkswagen, and Mercedes-Benz, who have also eased off the accelerator in their race to boost EV production.
Despite EV sales skyrocketing from 3 million in 2021 to almost 14 million last year, both established carmakers and startups are seeing softer demand. As a result, dealerships are now grappling with parking lots full of EVs. According to data from Cox Automotive cited by The Wall Street Journal, the average dealership held a 125-day supply of EVs as of early June.
Although the steep price tags that once came with going all-electric have dropped — 4 out of the 5 most discounted new models were electric vehicles in the first half of this year — concerns about range anxiety, the availability of public chargers, and battery performance at low temperatures have all persisted.
Instead, many car buyers who might have considered ditching the combustion engine altogether now seem to be opting for hybrids. Toyota’s decision to focus on hybrids appears to be paying off, and even Lamborghini’s CEO expects hybrids to be a “success story”.
