Top major carmakers issued grim announcements about EVs this week.
Executives with General Motors, Ford, and Mercedes-Benz this week conceded there is a weakening demand for electric vehicles, with some announcing they would pull back on their own EV targets.
“It’s been a challenging situation, for sure,” Ford CEO Jim Farley said Thursday in an earnings call with investors, referring to the American market for EVs, according to an earnings call transcript.
“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,” he said. “A great product is not enough in the EV business anymore,” he said,” adding that “we have to be totally competitive on cost” because “affordability is an issue” for consumers.
As a result, the firm suspended $12 billion in EV spending on manufacturing capacity.
“Given the dynamic EV environment, we are being judicious about our production and adjusting future capacity to better match market demand,” said Ford CFO John Lawler on Thursday. “All told, we have pushed about $12 billion of EV spend, which includes capex, direct investment, and expense,” he added.
In an interview with The New York Times, Ford’s Executive Chairman Bill Ford said that high prices were the primary reason the company is having issues selling its EVs. “Electric vehicles are expensive,” he said earlier this month. “We know prices will come down, and as that happens, we will have a bigger ramp-up of EVs.”
General Motors CEO Mary Barra, in a letter to shareholders this week, that her company is “moderating the acceleration of EV production in North America to protect our pricing.”
The reason why, she explained, is because the firm has to “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,” referring to EVs.
She also told investors that GM would suspend its target of manufacturing 400,000 EVs from 2022 to June 2024 due to demand. However, she said that GM is committed to its own goal of having an all-electric lineup of cars by 2035.
