October 28, 2023

Major automakers admit that e-vehicle sales have been disappointing

This week, senior executives from Ford, General Motors, and Mercedes-Benz all voiced their concerns about the declining demand for electric vehicles. 

This comes as the big automakers navigate losses and pricing wars in the midst of an electric vehicle push that not enough people are buying, as Fox Business reported.

On Thursday, Ford pulled its full-year results projection, citing "uncertainty" over its tentative contract with the United Auto Workers, and warned of prolonged pressure on electric vehicles as buyers balk at paying a premium for EVs in comparison to other models.

Actions by these lawmakers come on the heels of a push by the Biden administration to lower carbon emissions by advocating for sweeping changes, such as large-scale adoption of electric vehicles, and other migrations away from fossil fuels.

Ford's Experience

Ford also warned of continued pressure on autonomous vehicles as customers continue to balk at paying a premium for autonomous vehicles over other models.

"It's been a challenging situation, for sure," Ford CEO Jim Farley said during the company's third-quarter earnings call after posting greater losses than expected on EVs.

"Matter of fact, our business is never short of challenges, especially right now with the evolution of the EV market and new global competitors from China, as well as the technology disruptions."

"A great product is not enough in the EV business anymore," Farley continued. "We have to be totally competitive on cost."

When it comes to electric vehicles, he added, "affordability is an issue" for consumers.

Other Auto Maker's Response to the Market

GM withdrew its profit forecast for 2023 on Tuesday, and CEO Mary Barra said the automaker will delay the introduction of several planned EV models to save money.

"We are reducing our fixed costs by $2 billion net of depreciation and amortization as we exit 2024," Barra wrote in a letter to shareholders.

"We are also moderating the acceleration of EV production in North America to protect our pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements that will make our vehicles less expensive to produce, and more profitable," she said.

The following day, GM and Honda issued a joint statement proclaiming the end of a $5 billion partnership to jointly develop affordable EVs, just one year after initiating the effort.

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