AMAC Exclusive – By Andrew Shirley
Despite liberal governments throughout the West pouring billions of dollars into convincing drivers to switch to electric vehicles (EVs), demand is continuing to slump and automakers are pulling back from their “all-electric” ambitions.
The latest blow to the “EV revolution” came on February 1 when Volvo announced that it would no longer provide support for Polestar, an electric vehicle brand partly owned by the Swedish carmaker. After the first Polestar car was unveiled in 2020 to significant media fanfare, consumer enthusiasm has been lackluster and sales have consistently failed to meet expectations. The news also came just a few weeks after Polestar said that it would be cutting 450 jobs due to “challenging market conditions.”
Polestar is hardly alone. As Yahoo Finance reported in early February, “EV sales are expected to decline for the first time in seven years in 2024 in Germany, Europe’s biggest car market.” Volkswagen has also announced that it will cut “thousands of jobs in Germany” in response to financial losses caused by “low demand” for EV’s.
Mercedes-Benz, meanwhile, has had to cut prices by several thousand dollars in a desperate attempt to offset slumping sales. In total, German economic forecasters predict that sales of EVs will drop in 2024 by as much as 14 percent – the first such drop in eight years.
French automaker Renault also recently scrapped plans to expand its EV operations, citing lack of strong interest from investors and a slowdown in sales. EV sales in Britain have similarly flatlined, with a shocking 34 percent drop in 2023.
In the United States, despite overall numbers of sales reaching a record high in 2023, the pace of EV adoption has continued to slow, and industry experts now predict that the country will see its first decline in sales in three years during the first quarter of 2024. As Business Insider reported in January, “the country is no longer on track to hit the government’s sales targets” and “the trickle-down effects of this decreased demand are everywhere” – including inventories of EVs piling up at dealerships throughout the country.
Ford, once the EV leader among legacy American automakers, has now delayed $12 billion in its planned $50 billion investment in EV manufacturing. General Motors, meanwhile, has backtracked on its EV promises and canceled a partnership with Honda to produce new EV models. As GM CEO Mary Barra admitted during an earnings call last October, the “EV transformation” has been “a bit bumpy.”
Even Tesla, one of the world’s most successful EV companies, has seen its share of struggles. The carmaker delivered about 10 percent fewer vehicles in the fourth quarter of 2023 as the third quarter, and in total fell short of its 2023 deliveries target by about 2,000 vehicles.
In another telling sign that EV proponents may have overestimated enthusiasm for the vehicles, Hertz Rent-A-Car has announced it is backing off of EVs almost completely. According to Yahoo Finance, “Hertz was an early adopter of EVs back in October 2021, announcing it would be buying 100,000 Tesla’s with great fanfare in a marketing campaign starring former NFL quarterback Tom Brady.”
“Right after an initial stock jump and glowing media praise, however, the big bet on EVs went bust quickly.” In January, Hertz announced that they would be selling the majority of their EVs at below-market rates to recoup losses. They had also made a heavy investment in Polestar that they now announced will be put on hold. The primary reason for the reversal is the high maintenance cost of EVs and prospective car renters’ preference towards internal combustion engines and hybrids.
In California, the heart of the American EV market, the sales slump has been particularly stark. According to a recent report from the California New Car Dealers Association, “Only 89,993 electric light passenger vehicles were registered in the fourth quarter of 2023, which is down about 10% from the third quarter, which itself was down from the second quarter of 2023.”
“The entire myth at the heart of this whole transition is that the battery car seamlessly fits right into the gas car’s position,” industry expert Edward Niedermeyer told Business Insider. “It doesn’t, and that’s the problem.”
What Niedermeyer refers to is something industry leaders are calling “range anxiety,” or concerns among consumers about how far EVs can go on one charge. The average range of an EV is about 250 miles, and the vehicles can take up to an hour to charge. Moreover, scarce charging infrastructure in some parts of the country has led EV owners to wait for hours on end to recharge.
Recent changes to government EV subsidies are another likely cause for the sales decline, particularly in the United States. Due to new policies designed to reduce U.S. reliance on Chinese manufacturers, many EVs which previously qualified for generous tax credits no longer do, meaning that prices have now increased by several thousand dollars.
Nonetheless, the Biden administration is still barreling ahead with its EV mandate, and European governments have not backed down from their plans to go “all electric” as soon as 2030. But if recent sales numbers are any indication, everyday people have no intention of being willing participants in the “EV revolution.”
Andrew Shirley is a veteran speechwriter and AMAC Newsline columnist. His commentary can be found on X at @AA_Shirley.
