The dash to electric vehicles has stumbled after consumer demand cooled in recent months, hurting the global car industry’s hunt for elusive profits.
“This EV journey for legacy OEMs has just been an unmitigated disaster so far,” said influential industry analyst Adam Jonas, who works for the bank Morgan Stanley, during the recent third-quarter earning call for supplier Aptiv.
The difficulties of profitability increasing EV production amid tepid consumer demand was a key theme during the most recent earning calls for car makers, suppliers and dealer groups, many of whom warned of trickier financial conditions ahead.
A slowdown in growth in EV sales in the US and to a lesser extent Europe were behind the concerns expressed by businesses.
General Motors setting the tone in its 24 October call, saying it had scrapped its target of 100,000 EV sales for the second half of 2023 and a cumulative 400,000 sales from 2022 to the first half of 2024, without setting new targets.
“We're taking immediate steps to enhance the profitability of our EV portfolio and adjust to slowing near-term growth,” CEO Mary Barra said on the call, adding that the American firm was “moderating the pace” of EV acceleration in 2024 and 2025.
GM and Honda also recently announced that they had scrapped their plan to jointly develop affordable EVs.
Meanwhile, the Volkswagen Group warned analysts that EV demand wasn't meeting its expectations.
“We currently face a general reluctance in the European market to buy battery-powered vehicles,” chief financial officer Arno Antlitz said on the group’s earnings call.
He revealed that the firm had sold 532,000 EVs in the first nine months of the year – 7.9% of its total sales – but warned that its EV order intake was “below our ambitious targets”.
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