This was the year that the auto industry deviated from its original course towards an all-electric future.
According to a Reuters research, manufacturers were preparing to invest $1.2 trillion by 2030 to transition electric vehicles from niche goods to mass-market versions, many of which had in-house software and battery development. This was the case heading into 2023.
As the year draws to a conclusion, both established automakers and EV startups like Tesla, Rivian, and others are cutting back on investments and revamping their product strategy. In addition to the billions of dollars already invested in EV subsidies, legacy manufacturers are pleading with legislators for additional assistance to defray the hefty expenses of the EV transition.
Global consumer demand for electric vehicles is rising. However, the adoption of EVs is not occurring as quickly or profitably as industry leaders had hoped, particularly in the US.
Many electric vehicles have become unaffordable for middle-class users due to high borrowing rates. For consumers accustomed to adding hundreds of miles of petrol driving range in a matter of minutes, the absence of charging infrastructure is a deal-breaker.
"EVs are going to be the future of the passenger automobile business," said Jeff Parent, COO of AutoNation, the U.S. auto dealership chain. But because of consumer concerns about price and charging, he said, "the next three to four years, things are going to be bumpy."
CEOs in the sector are increasing their bets on their plans to convert to entirely electric fleets by the middle of the ensuing ten years.
When asked if General Motors still plans to go entirely electric by 2035, CEO Mary Barra of GM responded to the Detroit Automotive Press Association earlier this month, saying, "We'll adjust to where the customer is."
The electrified Ford F-150 Lightning truck demonstrates how optimistic predictions were misdirected.
Ford tripled the production rate of the electric pickup truck to 150,000 units annually in August at its historic Rouge assembly site in Dearborn, Michigan, thanks to the passionate early demand for the Lightning.
However, Ford scrapped the third shift in October after realising that the market for electric F-150s could not support the anticipated rate of production. There were about 700 furloughed workers.
The primary EV markets of China, Europe, and the US continue to see greater growth in the demand for electric vehicles than for automobiles in general.
According to AutoForecast Solutions, global EV production is expected to quadruple to 33.4 million vehicles by 2030, or almost one-third of overall vehicle production. According to a JATO Dynamics estimate, a significant portion of that growth will occur in China, where price wars led by BYD and Tesla, the leaders of the Chinese EV industry, and government subsidies have made EVs more cheap than combustion vehicles.
According to AFS, North American battery-electric vehicle production might expand sixfold to about 7 million vehicles by 2030. That falls significantly short of the objectives set forth by the Biden administration, but it is equivalent to almost 40% of the anticipated U.S. market.
Business leaders are pressuring the Biden administration to abandon pollution regulations that, by 2032, will essentially force EV sales to make up two-thirds of all new car sales in the United States.
Executives in the business express concern over two issues regarding the difficulty of bringing EVs to a wider audience than tech-adventurous early adopters: affordability and charging accessibility.
Major legacy automakers were obliged to sign arrangements with Tesla this year in order to permit owners of their EVs to utilise Tesla's Supercharger network, which was a competitive advantage for Tesla due to the delayed development of charging infrastructure.
"The automakers' capitulation to the (Tesla) standard is a clear signal that they are realizing that demand is held back by fears on charging," said Mark Wakefield, co-leader of consultancy AlixPartners' automotive practice.
"Affordability" is industry code for convincing mainstream, middle-income consumers to pay enough for an EV to cover higher production costs and still yield a profit. For most legacy automakers, that has so far proven impossible.
Even Tesla, a company that profits from electric vehicles, has had to lower its costs in order to maintain manufacturing lines in China and the US operating at maximum capacity.
"If our car cost the same as a (Toyota) RAV4, no one would buy a RAV4, or, at least, they would be very unlikely to," Tesla CEO Elon Musk told analysts in October. “Our car is still much more expensive than a RAV4."
Models of the RAV4 begin at $28,475. Starting at $43,990, Model Ys are eligible for $7,500 in tax credits through December 31. Stronger domestic content regulations may result in a reduction of those credits, as Tesla has cautioned.
(Source:www.theprint.in)
According to a Reuters research, manufacturers were preparing to invest $1.2 trillion by 2030 to transition electric vehicles from niche goods to mass-market versions, many of which had in-house software and battery development. This was the case heading into 2023.
As the year draws to a conclusion, both established automakers and EV startups like Tesla, Rivian, and others are cutting back on investments and revamping their product strategy. In addition to the billions of dollars already invested in EV subsidies, legacy manufacturers are pleading with legislators for additional assistance to defray the hefty expenses of the EV transition.
Global consumer demand for electric vehicles is rising. However, the adoption of EVs is not occurring as quickly or profitably as industry leaders had hoped, particularly in the US.
Many electric vehicles have become unaffordable for middle-class users due to high borrowing rates. For consumers accustomed to adding hundreds of miles of petrol driving range in a matter of minutes, the absence of charging infrastructure is a deal-breaker.
"EVs are going to be the future of the passenger automobile business," said Jeff Parent, COO of AutoNation, the U.S. auto dealership chain. But because of consumer concerns about price and charging, he said, "the next three to four years, things are going to be bumpy."
CEOs in the sector are increasing their bets on their plans to convert to entirely electric fleets by the middle of the ensuing ten years.
When asked if General Motors still plans to go entirely electric by 2035, CEO Mary Barra of GM responded to the Detroit Automotive Press Association earlier this month, saying, "We'll adjust to where the customer is."
The electrified Ford F-150 Lightning truck demonstrates how optimistic predictions were misdirected.
Ford tripled the production rate of the electric pickup truck to 150,000 units annually in August at its historic Rouge assembly site in Dearborn, Michigan, thanks to the passionate early demand for the Lightning.
However, Ford scrapped the third shift in October after realising that the market for electric F-150s could not support the anticipated rate of production. There were about 700 furloughed workers.
The primary EV markets of China, Europe, and the US continue to see greater growth in the demand for electric vehicles than for automobiles in general.
According to AutoForecast Solutions, global EV production is expected to quadruple to 33.4 million vehicles by 2030, or almost one-third of overall vehicle production. According to a JATO Dynamics estimate, a significant portion of that growth will occur in China, where price wars led by BYD and Tesla, the leaders of the Chinese EV industry, and government subsidies have made EVs more cheap than combustion vehicles.
According to AFS, North American battery-electric vehicle production might expand sixfold to about 7 million vehicles by 2030. That falls significantly short of the objectives set forth by the Biden administration, but it is equivalent to almost 40% of the anticipated U.S. market.
Business leaders are pressuring the Biden administration to abandon pollution regulations that, by 2032, will essentially force EV sales to make up two-thirds of all new car sales in the United States.
Executives in the business express concern over two issues regarding the difficulty of bringing EVs to a wider audience than tech-adventurous early adopters: affordability and charging accessibility.
Major legacy automakers were obliged to sign arrangements with Tesla this year in order to permit owners of their EVs to utilise Tesla's Supercharger network, which was a competitive advantage for Tesla due to the delayed development of charging infrastructure.
"The automakers' capitulation to the (Tesla) standard is a clear signal that they are realizing that demand is held back by fears on charging," said Mark Wakefield, co-leader of consultancy AlixPartners' automotive practice.
"Affordability" is industry code for convincing mainstream, middle-income consumers to pay enough for an EV to cover higher production costs and still yield a profit. For most legacy automakers, that has so far proven impossible.
Even Tesla, a company that profits from electric vehicles, has had to lower its costs in order to maintain manufacturing lines in China and the US operating at maximum capacity.
"If our car cost the same as a (Toyota) RAV4, no one would buy a RAV4, or, at least, they would be very unlikely to," Tesla CEO Elon Musk told analysts in October. “Our car is still much more expensive than a RAV4."
Models of the RAV4 begin at $28,475. Starting at $43,990, Model Ys are eligible for $7,500 in tax credits through December 31. Stronger domestic content regulations may result in a reduction of those credits, as Tesla has cautioned.
(Source:www.theprint.in)
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