On October 27, Beijing time, facing rising inventories and slowing sales, Western auto industry executives admitted that their ambitious electric vehicle plans were in jeopardy, at least in the short term. This week, several executives from some of the largest Western automakers once again expressed unease about the growth prospects of the electric vehicle market. They are worried about whether their own electric vehicles can be sold.Such concerns could jeopardize their multibillion-dollar electrification strategy.

Universal face change

The person with the biggest change in attitude is undoubtedly General Motors CEO Mary Barra. She has always been one of the most optimistic CEOs in the automotive industry about the future of electric vehicles. GM has also been a pioneer in the electric vehicle industry. It has sold the Chevrolet Bolt for seven years and made bold claims that the company will fully shift to electric vehicles in the future long before its competitors entered the market.

However, both Barra and GM softened their tone during GM's third-quarter earnings call this week. The company announced in its quarterly financial report that it would abandon its goal of producing 100,000 electric vehicles in the second half of this year and an additional 400,000 electric vehicles in the first six months of 2024. GM itself doesn't know when it will achieve these goals.

"As we move further toward electric vehicles, the road is going to be a little bumpy," Barra said.


GM Chevrolet Bolt

While GM's about-face came as a bit of a surprise to investors, it's not the only company with this new take on the future of electric vehicles. Even Tesla CEO Elon Musk warned on a recent earnings call that economic worries would lead to lower demand for cars, even for the company that has long been a market leader in electric vehicles.

Mercedes-Benz has also been outspoken about the state of the electric car market. Previously, Mercedes-Benz had to offer thousands of dollars in discounts to customers in order to sell electric cars.

"This is a pretty brutal area," Mercedes-Benz CFO Harald Wilhelm said on a conference call with analysts. "It's hard for me to imagine that the current situation is completely sustainable for everyone."

Ford loses money, delays $12 billion investment

At the same time, Modele, the electric vehicle division of Ford Motor Company, another established American car company, suffered an operating loss of US$1.3 billion in the third quarter. The cumulative operating loss in the first three quarters was approximately US$3.1 billion, which is close to reaching Ford's forecast of a full-year operating loss of US$4.5 billion.

Ford said on Thursday that many consumers in North America are unwilling to spend more money on pure electric vehicles compared with internal combustion engine vehicles or hybrid vehicles. Although electric vehicle sales at Ford and the industry are still growing, the growth rate is not as fast as Ford expected.


Ford F-150Lightning

Ford executives emphasized that the company has not cut spending on future electric vehicle models, but now plans to gradually increase electric vehicle production capacity and spending more slowly than previously planned."We will not give up on second-generation electric vehicle products. However, we will focus on the speed of expanding production capacity. We will cancel some investments."Ford CFO John Lawler said on a conference call Thursday.

Lawler also announced that Ford would postpone a $12 billion investment plan in new electric vehicle production capacity, including plans to build a second battery factory at a new campus in Kentucky. But he pointed out that Ford's new electric vehicle manufacturing park "Blue Oval City" (Blue Oval City) in Tennessee will continue to be built as originally planned.

"Customers will determine capacity. Ford will be able to balance production of gasoline, hybrid and electric vehicles to match the pace of EV adoption like no other company."

Why are electric cars hard to sell?

Mercedes-Benz is not alone in selling electric cars at reduced prices. In North America, nearly every electric vehicle model is currently on sale for less than its sticker price. In addition to this, automakers also offer nearly 10% sales incentives for certain electric vehicles to stimulate consumer purchases.

This is a helpless move after the inventory is overstocked.Auto dealer executives are finding that even the deep price cuts and discounts they offer are not enough to attract consumers. These cars are taking longer to sell than traditional gas-powered vehicles, as the next wave of car buyers are more focused on cost, infrastructure challenges and the life barriers they may face with using electric vehicles.

Just months ago, dealers began warning of slowing demand for electric vehicles. Now, automakers seem to be waking up to this reality. Ford became the first manufacturer to slow down after dealers began refusing to take quotas for the Mach-E. In July, the company extended by a year its self-imposed deadline to produce 600,000 electric vehicles per year and abandoned its goal of producing 2 million electric vehicles in 2026.

At the same time, Honda also gave up its plan to jointly develop economical electric vehicles under $30,000 with General Motors. The company’s CEO Toshihiro Mibe said,Changes in the EV environment are difficult to measure.

"After a year of research, we believe that this will be a difficult business, so we will now stop our plans to develop economical electric vehicles." Toshihiro Mibe said in an interview.

Pure electric vehicle strategy doesn’t work

But for some, the retreat from electric vehicles by companies like General Motors is no surprise.


Akio Toyoda doesn’t think pure electric vehicles are the only way out

"People finally see the reality." Akio Toyoda, chairman of Toyota Motor, said at the Tokyo Motor Show in Japan. He has long expressed skepticism about his peers' plans to pursue all-electric vehicles.

Last year, Toyoda Akio said in an interview with reporters that although the policies of many governments banning the sale of gasoline vehicles and supporting electric vehicles make the future of pure electric vehicles seem inevitable, most people in the automobile industry do not believe that electric vehicles are the only way out.

"The silent majority are wondering whether electric vehicles can really be the only option. But they think electric vehicles are a trend, so they can't voice their doubts out loud." Akio Toyoda said in an interview.