Discharge: Automakers No Longer Want to Produce Electric Cars

The electric future turns out not as fun and close as it seemed before. Many global manufacturers intend to slow down the development of electric transport in favor of the good old internal combustion engines. The car experts from the Indy Auto Man dealership have collected the most significant calls from major auto brands. For more automotive trends and hands-on tips on used cars, check their blog on indyautoman.com.  

Ford and General Motors

US manufacturers are recording a decline in consumer interest in electric cars. The situation in the local market is being actively shaken by dealers who believe that efforts to electrify the vehicle fleet have gone too far and that selling battery-powered models is not easy. Partly because the necessary infrastructure is not fully operational.

In Ford's January sales statistics, electric cars showed no growth, while hybrids equipped with internal combustion engines, on the contrary, shot up, adding 4.3 percent compared to January 2023. This affected the production volumes of the F-150 Lightning electric pickup trucks - the model production plan for 2024 was halved, and some of the employed personnel were refocused on assembling gasoline Ranger and Bronco. But these two Ford models have also been lacking consumer attention lately: Bronco sales dropped by 27 percent in January, and Ranger sales by 89 percent.

General Motors has similar sentiments due to the market situation. The underperforming electric cars in the lineup will be complemented by hybrid vehicles, which GM planned to discontinue when it completed the Volt project in 2019. The comeback of hybrids was announced by the head of the company, Mary Barra, at the end of January. The production range for the North American market will include several electrified new products with internal combustion engines and the possibility of external charging.

Toyota

The chairman of Toyota recently spoke about high expectations for electric vehicles. At the end of January, Akio Toyoda noted that the focus on models without internal combustion engines is wrong, and electric cars will not be able to occupy a significant share of the global car market. The forecast of a traditionally conservative leader: no more than 30 percent of the total. In the Toyota range, electric models are balanced with new products with internal combustion engines. In addition, the company actively continues experiments with hydrogen installations and promotes hybrid technologies.

A fresh look at piston engines was one of the topics Mr.Toyoda addressed during the Toyota Group Vision briefing in early 2024. The announcement was about a new line of traditional motors, which will achieve greater efficiency and, at the same time, contribute to the employment of millions of people who will be involved in the development and unit production.

Volkswagen

The management of the German giant Volkswagen has repeatedly noted that the widespread transition to electric vehicles was hasty. Thus, at the end of January, Porsche CFO Lutz Meschke suggested that Europe would shift the loudly announced ban on internal combustion engines from 2035 to a later date. And today, there are enough reasons for comments of this kind. Interest in electric cars in EU countries has been dampened by high prices and the lack of reliable charging stations, as well as by the reduction of subsidies for buyers, which hits mass models especially hard.

Less than a month ago, Volkswagen put off plans for an IPO of its PowerCo division, which produces batteries. As Bloomberg noted, the decision was directly influenced by weakening demand for electric cars, which does not bode well for growth prospects. Plus, VW’s negotiations with investors have been postponed since the production of batteries in large volumes at factories already under construction in Europe, to put it mildly, is not supported by appropriate expectations.

At the same time, the company can quickly return to its original plans if the market situation changes for the better. However, in December 2023, the German Ministry of Economic Affairs completed the subsidy program for electric vehicles ahead of schedule. The reason for the decision was the budget deficit.

Volvo

Volvo has announced its intention to complete the development of the Polestar brand. The Swedish automaker confirmed that they stopped the electric project financing, and Volvo's 48 percent stake in the company will go to the parent holding Geely. The latter will develop the electric brand based on its plans and strategy.

The decision of Volvo bosses is associated with changed market sentiment. Global demand for electric cars is slowing, and Polestar reformatted from a sports division into a full-fledged company, is still not doing well. Engaged in a rivalry with Tesla but never breaking even, the brand faced cost cuts and layoffs in 2023. And they failed to fulfill the plan for car deliveries - 54 instead of 60 thousand electric vehicles saw the light of day.

Hertz

Well-known rental company Hertz Global Holdings has also played against the overall electrification of the automotive industry. In January, it became known that about 20 thousand electric cars, including Tesla models, were being removed from Hertz’s extensive fleet in the United States. The previously planned purchase of Polestar cars is also on pause. The company will sell the cars withdrawn from rental and promptly replace them with models with internal combustion engines, which require less costs, primarily for repairs.

Curiously, the large-scale replacement included models acquired by the company just two years ago. And before such a radical decision, it seemed that Hertz’s battery fleet would only grow. Thus, as part of a major deal with the Polestar, it was planned to purchase about 65 thousand electric cars over five years. But now, it seems, it won't happen. And this is another blow to Polestar.