Carmakers are worried.
Richter Fail
After racing to meet surging demand for EVs just six months ago, carmakers are now slamming the brakes and significantly cutting their plants' output.
It's an early sign carmakers vastly overestimated the appetite for electric cars, which are increasingly sitting on lots unsold.
Is it an overcorrection triggered by a COVID-era supply shortage? Or are consumers simply far more discerning, especially when it comes to paying a premium, than initially thought?
As the Wall Street Journal reports, it's likely a mix of a number of factors — but one thing's for sure: it's a rude wakeup call for the EV industry.
Seismic Change
Even Tesla CEO Elon Musk warned of "notably lower" growth during last month's fourth-quarter earnings call, which fell well short of expectations and left a dent in the carmaker's share value.
Ford also cut the output of the plant that produces its electric F-150 Lightning in half last month.
"This has been a seismic change in the last six months of last year that will rapidly sort out winners and losers in our industry," Ford CEO Jim Farley told investors earlier this month, as quoted by the WSJ.
Context is important: EV sales shot up by 50 percent in the first half of 2023, but plummeted in the latter half.
With interest rates making expensive EVs even more pricier to own, consumers are turning to hybrids and gas vehicles instead.
Last month, chairman of Japanese carmaker Toyota Akio Toyoda doubled down on his bearish stance against battery-powered EVs, arguing that hybrid EVs and hydrogen-powered cars will make up the lion's share of the market.
Then there are consumer worries over the availability of public EV chargers, which can greatly hamper the experience, depending on where they live.
All told, the state of EVs is looking precarious. But while US automakers are expecting gloomier days ahead, the global EV market is far from slowing down, with consultant Rho Motion finding that a record number of EVs were sold globally in January, up 69 percent over last January.
More on EVs: Toyota Slams Electric Cars, Says They'll Never Catch On
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