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The EV euphoria is over.Automakers tout US consumer choice

Although consumer demand for EVs has not manifested as much as management expected, car sales are still expected to increase in the coming years.

Andrew Merry | Moments | Getty Images

DETROIT ā€” The buzz around electric cars is fading.

The automotive industry has been ecstatic about EVs for years. Automakers have issued optimistic sales forecasts for electric vehicle models and announced ambitious goals for EV growth. Wall Street boosted valuations of traditional automakers and startup entrants alike based in part on their vision for the future of EVs.

Now, the hype has died down and companies are once again supporting consumer choice.car manufacturer ford motor and general motors to Mercedes-Benz, VolkswagenJaguar Land Rover and Aston Martin are scaling back or delaying their electric vehicle plans.

Even the US EV leader teslais estimated to account for 55% of domestic EV sales in 2023, but CEO Elon Musk said in late January that the company is preparing for a “potentially significant decline” in growth. Ta.

A widespread return to more mixed vehicles, with petrol and hybrid or all-electric options, envisions an eventual all-electric future, although the pace of adoption has been previously predicted. Much slower than it used to be.

“What we saw in 2021 and 2022 was a temporary market spike where EV demand really took off,” Marin Jaja, Ford’s EV chief operating officer, said in a recent CNBC interview. Told. “It’s still growing, but nowhere near the rate we expected in 2021, 2022.”

Ford is significantly increasing production and sales of hybrid models, which could ease the transition to electric vehicles for drivers who aren’t ready for an all-electric model. It also helps companies meet stricter federal standards for carbon emissions.

GM, the first traditional automaker to go all-in on EVs, plans to roll out plug-in hybrid electric vehicles for consumers alongside EVs and gasoline-powered vehicles.Others, e.g. modern car, Kia, toyota motors And potentially Volkswagen is also planning to offer varying levels of electrification across its lineup.

“I think a balanced approach is the best way to go,” Volkswagen of America CEO Pablo Di Ci told CNBC last month, adding that the company plans to bring hybrid vehicles to the U.S. He added that discussions are underway. The company currently sells hybrid vehicles in Europe, but not in the United States.

“Whether it’s a hybrid or a plug-in hybrid, these technologies exist within the VW Group,” he said. ā€œI think itā€™s only a matter of time before we bring it here.ā€

To be clear, while consumer demand for EVs has not manifested as much as management expected, EV sales are still projected to increase in the coming years.

Last year, US EV sales reached a record high of 1.2 million units. equivalent to 7.6% Of the total national market, Cox Automotive estimates that this share is expected to increase from 30% to 39% by the end of 2010, according to analyst forecasts.

“The market will never transition smoothly to EVs, and we expect this transition to slow as early adopters become complacent,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. ā€ he said. ā€œThe shift to less tech-savvy buyers will slow EV market share growth over the next few years.ā€

EV target

In recent years, the rise of ESG investing, or investments geared toward environmental, social, and governance principles, has helped Tesla grow from a niche EV player to one of the most respected automakers. World market capitalization in 2020the automotive industry has primarily started paying attention and planning its future direction in EVs.

Automakers hope to emulate Tesla’s success, with some promising to offer only EVs in the not-too-distant future.

Among those targets are: StellantisAlfa Romeo has said its vehicle lineup will be fully electric by 2027. jaguar land rover and volvo said GM has announced that it will offer only electric vehicles under its own brand by 2035. buick and Cadillac We aim to offer only EVs five years early. honda motor industry has set a goal of becoming the exclusive distributor of EVs and fuel cell vehicles in North America by 2040. More specialized brands such as Lotus and Bentley have also announced EV-only sales targets.

GM CEO and Chairman Mary Barra spoke at EV Day on March 4, 2020 at the company’s technology and design campus in Warren, Michigan, a suburb of Detroit.

GM

Although none of these automakers have officially announced changes to their long-term goals, there has been a noticeable shift in the tone and messaging around them. The companies are monitoring consumer adoption, global emissions regulations and EV charging infrastructure to determine future plans, the people said.

Since first adopting an all-electric deadline in January 2021, GM CEO Mary Barra and other executives have recently said customer demand will shape the company’s efforts. ing.they keep That is the goal for 2035 The instruction plan will remain unchanged. Cadillac currently says it will offer its entire lineup of EVs, but that doesn’t necessarily mean it will end production of all gas-powered models by 2030.

“We’re getting the best of both worlds right now,” Cadillac Vice President John Ross said in an interview last month. ā€œWe’ll see what the future holds, but we remain committed to delivering a complete EV portfolio by the end of the decade.ā€

Ford has never explicitly stated plans to offer EVs exclusively around the world, but it has set a goal of all-electric vehicles in Europe by 2030 and 50% of its sales in North America by the same year. The company has set a goal of becoming an electric vehicle and is aiming to achieve it. 8% EV profit margin 2026. Since then, it has set back many targets and is mass producing hybrid cars. especially the truck ā€” along with EV and plug-in hybrid electric vehicles for the U.S.

“We’ve always had a freedom of choice approach,” Gyaja said. “Part of it was to protect ourselves from going too far in one direction because, as we’ve seen, the market right now is very uncertain.”

Ford Motor Company CEO Jim Farley said at a press conference in Romulus, Michigan, that Ford Motor Co., Ltd. is partnering with China-based Amperex Technology to build an all-electric vehicle battery plant in Marshall, Michigan. Give a thumbs up before announcing that you will build a factory. 13th, 2023.

Rebecca Cook | Reuters

At Porsche’s annual media event on Tuesday, CEO Oliver Blume said the German sports car maker was in a “flexible position” when it came to building vehicles. He said the company is monitoring the adoption and regulation of EVs, but has a goal of having 80% of global sales be EVs by 2030.

“We have to constantly monitor…the pace is slower than last year’s plan, but we are always in a position to be flexible,” he said, adding that the company “needs to look ahead to 2026 and 2027.” Yes,ā€ he added. About plans to drastically reduce spending on gasoline vehicles.

A widespread shift in sentiment will bring more automakers closer to Toyota’s ethos.guided Akio Toyota Chairman and former CEOthe world’s top-selling automaker, has long argued that a diverse lineup is the right strategy to meet all customer needs and reach its goal of becoming carbon neutral by 2050.

Japanese automakers are now expected to benefit from strategies such as hybrids, plug-in hybrids, EVs, and hydrogen fuel cells.

“Toyota is almost completely absent.” [battery electric vehicle] It will gain more U.S. market share than any other car company this year. Morgan Stanley analyst Adam Jonas wrote in a note to investors last week. “EVs may be the ‘future,’ but they’re struggling right now. Hybrid sales are growing five times faster than EVs in the US.”

what happened?

After low interest rates and the rise of Tesla sparked tremendous interest from early EV adopters, interest rates skyrocketed, raw material costs soared, and vehicles became much more expensive compared to traditional vehicles.

The auto industry and the Biden administration have set their own targets for half of all new cars in the US. Aiming to sell electricity by 2030overestimated consumers’ willingness to adopt new technologies without a reliable and widespread charging infrastructure.

While EV adoption has been rapid among initial adopters and some “EV-curious” consumers, it has been more challenging for mainstream buyers.

Cox Automotive said, “Expectations for EV growth in the U.S. market have gone from rosy to reality as sales have increased, but customer acceptance of EVs has not kept pace.” 2024 Forecast Report.

Cox said available EV inventory in the U.S. (measured in days of supply) has ballooned to 136 days. This equates to his 78 days of new car supply for the entire U.S. industry. This data does not include Tesla. Rivian Other car manufacturers that sell directly to consumers rather than through franchised dealers.

“A few years ago, there were some very ambitious ideas about what EV sales would look like, but no one seemed to be thinking about the challenges along the way,” said Michelle Krebs, executive analyst at Cox. It was,ā€ he said. ā€œNow that they are here, reality is setting in.ā€

The slow adoption of EVs has led to price cuts and discounts on several models, including the Ford Mustang Mach-E, Tesla Model Y, and most recently, the Nissan Ariya.

Trisha Jung, senior director of EV strategy and transformation at Nissan USA, said: Cuts up to $6,000 ā€œWe make our models more competitive and ensure we deliver maximum value to our customers.ā€

What’s next?

Industry strategy regarding EVs could change further in the coming months in response to political pressures, such as the finalization of U.S. Environmental Protection Agency fuel economy and emissions standards.

The driving force behind EV deployment by traditional automakers, particularly the so-called Detroit Three, was the need to meet federal vehicle emissions and fuel efficiency requirements to avoid costly fines.

suggestion Currently under consideration If the Biden administration raises fuel efficiency standards through 2032, automakers will face more than $14 billion in fines based on the fuel efficiency of their current vehicles, according to the Automotive Innovation Alliance, which represents the largest automakers operating in the United States. There is a possibility that he will be fined.

A separate letter from the Automotive Policy Council last year to federal regulators estimated that such regulations would result in $6.5 billion in fines for GM and $3 billion for Jeep’s parent company, Stellantis. The Detroit Council, which represents automakers, said the fines against Ford would total about $1 billion.

Changes in strategy come with corresponding costs. Automakers that invest heavily in EV infrastructure and then pivot may face write-downs or need more capital to power various production lines. But without selling to consumers, there are few options.

Given that the standards were created with the rapid adoption of EVs in mind, it’s unclear how much hybrids and plug-in hybrids will help automakers meet potential regulations. But automakers’ product mixes must meet federal guidelines to remain viable.

Automakers’ fuel economy ratings are based on the overall mix of vehicles sold. The more fuel efficient a vehicle is and the lower its emissions, the higher the automaker’s overall score.

“It all depends on what the final regulations look like,” said Matt Brandt, president of the Automotive Policy Council.

Brandt said the industry group hopes the Biden administration listens to the industry’s concerns and “understands that reasonable fuel efficiency regulations are in place as part of the transition to electric vehicles.” He said there was.

Biden is expected to scale back certain goals, which were a key part of his climate change plan, as the pace of EV adoption is slower than expected, according to reports.

The US presidential election in November is just around the corner. If former President Donald Trump is re-elected, he is expected to reduce or eliminate fuel economy regulations, as he did during his first term as president.

A reversal of these standards in January could pave the way for an even longer era of gasoline engine and hybrid models.

Automakers operating in Europe are facing even tougher conditions. Government EV regulations currently aim to ban the sale of conventional fossil fuel vehicles by 2035. However, changes have already been made to the regulations, and conservative groups such as the European People’s Party are calling for the ban to be lifted.

Summarize this content to 100 words Although consumer demand for EVs has not manifested as much as management expected, car sales are still expected to increase in the coming years.Andrew Merry | Moments | Getty ImagesDETROIT ā€” The buzz around electric cars is fading.The automotive industry has been ecstatic about EVs for years. Automakers have issued optimistic sales forecasts for electric vehicle models and announced ambitious goals for EV growth. Wall Street boosted valuations of traditional automakers and startup entrants alike based in part on their vision for the future of EVs.Now, the hype has died down and companies are once again supporting consumer choice.car manufacturer ford motor and general motors to Mercedes-Benz, VolkswagenJaguar Land Rover and Aston Martin are scaling back or delaying their electric vehicle plans.Even the US EV leader teslais estimated to account for 55% of domestic EV sales in 2023, but CEO Elon Musk said in late January that the company is preparing for a “potentially significant decline” in growth. Ta.A widespread return to more mixed vehicles, with petrol and hybrid or all-electric options, envisions an eventual all-electric future, although the pace of adoption has been previously predicted. Much slower than it used to be.”What we saw in 2021 and 2022 was a temporary market spike where EV demand really took off,” Marin Jaja, Ford’s EV chief operating officer, said in a recent CNBC interview. Told. “It’s still growing, but nowhere near the rate we expected in 2021, 2022.”Ford is significantly increasing production and sales of hybrid models, which could ease the transition to electric vehicles for drivers who aren’t ready for an all-electric model. It also helps companies meet stricter federal standards for carbon emissions.GM, the first traditional automaker to go all-in on EVs, plans to roll out plug-in hybrid electric vehicles for consumers alongside EVs and gasoline-powered vehicles.Others, e.g. modern car, Kia, toyota motors And potentially Volkswagen is also planning to offer varying levels of electrification across its lineup.”I think a balanced approach is the best way to go,” Volkswagen of America CEO Pablo Di Ci told CNBC last month, adding that the company plans to bring hybrid vehicles to the U.S. He added that discussions are underway. The company currently sells hybrid vehicles in Europe, but not in the United States.”Whether it’s a hybrid or a plug-in hybrid, these technologies exist within the VW Group,” he said. ā€œI think itā€™s only a matter of time before we bring it here.ā€To be clear, while consumer demand for EVs has not manifested as much as management expected, EV sales are still projected to increase in the coming years.Last year, US EV sales reached a record high of 1.2 million units. equivalent to 7.6% Of the total national market, Cox Automotive estimates that this share is expected to increase from 30% to 39% by the end of 2010, according to analyst forecasts.”The market will never transition smoothly to EVs, and we expect this transition to slow as early adopters become complacent,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. ā€ he said. ā€œThe shift to less tech-savvy buyers will slow EV market share growth over the next few years.ā€EV targetIn recent years, the rise of ESG investing, or investments geared toward environmental, social, and governance principles, has helped Tesla grow from a niche EV player to one of the most respected automakers. World market capitalization in 2020the automotive industry has primarily started paying attention and planning its future direction in EVs.Automakers hope to emulate Tesla’s success, with some promising to offer only EVs in the not-too-distant future.Among those targets are: StellantisAlfa Romeo has said its vehicle lineup will be fully electric by 2027. jaguar land rover and volvo said GM has announced that it will offer only electric vehicles under its own brand by 2035. buick and Cadillac We aim to offer only EVs five years early. honda motor industry has set a goal of becoming the exclusive distributor of EVs and fuel cell vehicles in North America by 2040. More specialized brands such as Lotus and Bentley have also announced EV-only sales targets.GM CEO and Chairman Mary Barra spoke at EV Day on March 4, 2020 at the company’s technology and design campus in Warren, Michigan, a suburb of Detroit.GMAlthough none of these automakers have officially announced changes to their long-term goals, there has been a noticeable shift in the tone and messaging around them. The companies are monitoring consumer adoption, global emissions regulations and EV charging infrastructure to determine future plans, the people said.Since first adopting an all-electric deadline in January 2021, GM CEO Mary Barra and other executives have recently said customer demand will shape the company’s efforts. ing.they keep That is the goal for 2035 The instruction plan will remain unchanged. Cadillac currently says it will offer its entire lineup of EVs, but that doesn’t necessarily mean it will end production of all gas-powered models by 2030.”We’re getting the best of both worlds right now,” Cadillac Vice President John Ross said in an interview last month. ā€œWe’ll see what the future holds, but we remain committed to delivering a complete EV portfolio by the end of the decade.ā€Ford has never explicitly stated plans to offer EVs exclusively around the world, but it has set a goal of all-electric vehicles in Europe by 2030 and 50% of its sales in North America by the same year. The company has set a goal of becoming an electric vehicle and is aiming to achieve it. 8% EV profit margin 2026. Since then, it has set back many targets and is mass producing hybrid cars. especially the truck ā€” along with EV and plug-in hybrid electric vehicles for the U.S.”We’ve always had a freedom of choice approach,” Gyaja said. “Part of it was to protect ourselves from going too far in one direction because, as we’ve seen, the market right now is very uncertain.”Ford Motor Company CEO Jim Farley said at a press conference in Romulus, Michigan, that Ford Motor Co., Ltd. is partnering with China-based Amperex Technology to build an all-electric vehicle battery plant in Marshall, Michigan. Give a thumbs up before announcing that you will build a factory. 13th, 2023.Rebecca Cook | ReutersAt Porsche’s annual media event on Tuesday, CEO Oliver Blume said the German sports car maker was in a “flexible position” when it came to building vehicles. He said the company is monitoring the adoption and regulation of EVs, but has a goal of having 80% of global sales be EVs by 2030.”We have to constantly monitor…the pace is slower than last year’s plan, but we are always in a position to be flexible,” he said, adding that the company “needs to look ahead to 2026 and 2027.” Yes,ā€ he added. About plans to drastically reduce spending on gasoline vehicles.A widespread shift in sentiment will bring more automakers closer to Toyota’s ethos.guided Akio Toyota Chairman and former CEOthe world’s top-selling automaker, has long argued that a diverse lineup is the right strategy to meet all customer needs and reach its goal of becoming carbon neutral by 2050.Japanese automakers are now expected to benefit from strategies such as hybrids, plug-in hybrids, EVs, and hydrogen fuel cells.”Toyota is almost completely absent.” [battery electric vehicle] It will gain more U.S. market share than any other car company this year. Morgan Stanley analyst Adam Jonas wrote in a note to investors last week. “EVs may be the ‘future,’ but they’re struggling right now. Hybrid sales are growing five times faster than EVs in the US.”what happened?After low interest rates and the rise of Tesla sparked tremendous interest from early EV adopters, interest rates skyrocketed, raw material costs soared, and vehicles became much more expensive compared to traditional vehicles.The auto industry and the Biden administration have set their own targets for half of all new cars in the US. Aiming to sell electricity by 2030overestimated consumers’ willingness to adopt new technologies without a reliable and widespread charging infrastructure.While EV adoption has been rapid among initial adopters and some “EV-curious” consumers, it has been more challenging for mainstream buyers.Cox Automotive said, “Expectations for EV growth in the U.S. market have gone from rosy to reality as sales have increased, but customer acceptance of EVs has not kept pace.” 2024 Forecast Report.Cox said available EV inventory in the U.S. (measured in days of supply) has ballooned to 136 days. This equates to his 78 days of new car supply for the entire U.S. industry. This data does not include Tesla. Rivian Other car manufacturers that sell directly to consumers rather than through franchised dealers.”A few years ago, there were some very ambitious ideas about what EV sales would look like, but no one seemed to be thinking about the challenges along the way,” said Michelle Krebs, executive analyst at Cox. It was,ā€ he said. ā€œNow that they are here, reality is setting in.ā€The slow adoption of EVs has led to price cuts and discounts on several models, including the Ford Mustang Mach-E, Tesla Model Y, and most recently, the Nissan Ariya.Trisha Jung, senior director of EV strategy and transformation at Nissan USA, said: Cuts up to $6,000 ā€œWe make our models more competitive and ensure we deliver maximum value to our customers.ā€What’s next?Industry strategy regarding EVs could change further in the coming months in response to political pressures, such as the finalization of U.S. Environmental Protection Agency fuel economy and emissions standards.The driving force behind EV deployment by traditional automakers, particularly the so-called Detroit Three, was the need to meet federal vehicle emissions and fuel efficiency requirements to avoid costly fines.suggestion Currently under consideration If the Biden administration raises fuel efficiency standards through 2032, automakers will face more than $14 billion in fines based on the fuel efficiency of their current vehicles, according to the Automotive Innovation Alliance, which represents the largest automakers operating in the United States. There is a possibility that he will be fined.A separate letter from the Automotive Policy Council last year to federal regulators estimated that such regulations would result in $6.5 billion in fines for GM and $3 billion for Jeep’s parent company, Stellantis. The Detroit Council, which represents automakers, said the fines against Ford would total about $1 billion.Changes in strategy come with corresponding costs. Automakers that invest heavily in EV infrastructure and then pivot may face write-downs or need more capital to power various production lines. But without selling to consumers, there are few options.Given that the standards were created with the rapid adoption of EVs in mind, it’s unclear how much hybrids and plug-in hybrids will help automakers meet potential regulations. But automakers’ product mixes must meet federal guidelines to remain viable.Automakers’ fuel economy ratings are based on the overall mix of vehicles sold. The more fuel efficient a vehicle is and the lower its emissions, the higher the automaker’s overall score.”It all depends on what the final regulations look like,” said Matt Brandt, president of the Automotive Policy Council.Brandt said the industry group hopes the Biden administration listens to the industry’s concerns and “understands that reasonable fuel efficiency regulations are in place as part of the transition to electric vehicles.” He said there was.Biden is expected to scale back certain goals, which were a key part of his climate change plan, as the pace of EV adoption is slower than expected, according to reports.The US presidential election in November is just around the corner. If former President Donald Trump is re-elected, he is expected to reduce or eliminate fuel economy regulations, as he did during his first term as president.A reversal of these standards in January could pave the way for an even longer era of gasoline engine and hybrid models.Automakers operating in Europe are facing even tougher conditions. Government EV regulations currently aim to ban the sale of conventional fossil fuel vehicles by 2035. However, changes have already been made to the regulations, and conservative groups such as the European People’s Party are calling for the ban to be lifted.
https://www.cnbc.com/2024/03/13/ev-euphoria-is-dead-automakers-trumpet-consumer-choice-in-us.html The EV euphoria is over.Automakers tout US consumer choice

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