On paper, EVs are kicking ass.
Electric vehicle sales are on track to hit 9 percent of all cars sold in the US by the end of the year. That’s a whopping 50 percent year-over-year increase, the second year in a row that EV sales have essentially doubled. So far this year, 1 million EVs have been sold in the US.
Globally, those numbers get even more impressive: 14 million projected sold for the year, a 33 percent year-over-year increase. China is “firmly in the mass-market phase of adoption,” Bloomberg notes, with plug-in cars accounting for over a third of the market. Europe is chugging along nicely as well.
So why does everything seem so out of whack? The news lately is full of production delays, factories postponed, models canceled, and, of course, the ever-present low-grade anxiety buzzing around a charging infrastructure that is both constantly broken and lacking in prevalence.
Why does everything seem so out of whack?
The news and the numbers seem wildly misaligned: Things are going great. No, wait, things are going badly. EVs are the future! Nope, EVs are a fad!
Take a breath. Unsurprisingly, there are a lot of different trend lines — price fluctuations, new incentives, the autoworkers strike, to name a few — that are colliding to make a mess of any attempt to get a solid temperature read on the EV transition. Political polarization is also making a rude cameo, which, in a presidential election, is sure to get worse before it gets even more worse. But there’s no harm in trying to sort things out.
For dealers, selling an EV to someone wearing an Apple Watch has never been that hard. Same goes for the Patagonia vests, the Allbirds sneakers, and the like. It’s all the people with analog watches and Sketchers who are the challenge.
The early adopters have all, well, adopted. And everyone else isn’t feeling that willing to take risks in their car buying, said Jessica Caldwell, director of insights at Edmunds.
“EV adoption is looking to move into its next phase — requiring much more mass-market interest — and this larger cohort has to be sold on EVs since they aren’t as enthusiastic and willing as early adopters,” she said.
This will be much more challenging for dealers: converting a whole cohort of more trepidatious, price-sensitive shoppers to an entirely new technology. Buying an EV isn’t just about bigger screens, faux grilles, or light bars; it’s an entirely new lifestyle, full of range considerations and charging anxieties and home equipment installations.
The early adopters have all, well, adopted
Sure, there’s a range of federal and state incentives in the mix that are designed to make it an easier sell, but those incentives are often difficult to navigate. Most people haven’t even heard of them. And honestly, who even has the time for all this? I’m exhausted even thinking about it.
“The world will inevitably embrace EVs, but the adoption curve will likely be jagged with periods of stagnation,” Caldwell said, “which is what we see playing out now as automakers are now toning down some of their previously bullish plans.”
Some of those newly toned-down plans include:
- Ford pausing $12 billion in new EV factory spending due to slower customer demand;
- GM pushing back production launches of its slate of electric trucks and SUVs, including the Chevy Silverado and Equinox EVs, as well as the GMC Sierra Denali EV;
- The company is also pushing EV truck production at its Orion facility, which was supposed to start next year, until late 2025;
- Honda and GM cancel their plans to jointly develop a slate of affordable EVs, arguing they couldn’t make the math work;
- Tesla CEO Elon Musk wringing his hands over interest rates for almost an entire earnings call, while also appearing to dial back plans to build a new factory in Mexico;
- Speaking of Tesla, the EV leader’s profit margins hit a four-year low in the third quarter of this year, as the company continues to navigate the price war it started;
- Hertz, admitting that its newly purchased EVs are twice as expensive to fix as its gas cars, is slimming down its EV plans;
- Citing subsidies and competition from China, Volkswagen said it would stop making two of its flagship EVs, the ID.3 and Cupra’s Born.
It’s gotten so bad, that now even notorious EV skeptic (and former CEO of Toyota) Akio Toyoda is going around basically being like “I told you so.” Conventional wisdom was that Toyota was in danger of going extinct due to its failure to jump on the EV bandwagon as enthusiastically as its competitors. The company was constantly being pestered by environmentalists doing their best Rod Tidwell impression to “show us the EVs!”
“The world will inevitably embrace EVs, but the adoption curve will likely be jagged with periods of stagnation.”
But Toyoda’s preference for hybrids over pure battery-electric vehicles now seems prescient, especially as more US car buyers drift toward hybrids. “People are finally seeing reality,” Toyoda told reporters at the Japan Mobility Show recently, according to The Wall Street Journal. “There are many ways to climb the mountain that is achieving carbon neutrality.”
US automakers bear a lot of the blame, too. They assumed that current demand patterns could also be applied to EVs, which is why most of them prioritized big trucks and SUVs right out of the gate. GM especially was guilty of this, leading with the Hummer EV truck and SUV, while letting the small, utilitarian Chevy Bolt languish for many years before being recalled and then discontinued.