Keep up with the innovative tech transforming business
Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.
In the latest sign that the EV transition isn’t exactly going smoothly, Ford said last week that it’s delaying some of its upcoming EV launches and doubling down on hybrids.
Then, shock waves rippled across Wall Street when Reuters reported that Tesla was shelving its much-anticipated $25,000 EV, which was slated to debut next year.
What’s going on here?
“Manufacturers over-anticipated the conversion to EVs and under-anticipated the competition from every other manufacturer,” Sam Fiorani, VP of global vehicle forecasting at AutoForecast Solutions, told Tech Brew. “There are just far too many EVs available on the market for the demand that exists.”
Ford said it would continue to “invest in a broad set of EV programs as it works to build a full EV line-up,” but would delay some upcoming launches, including production of a three-row electric SUV at its Oakville Assembly Plant in Ontario, Canada. That vehicle now is scheduled to debut in 2027 instead of 2025, which Ford said would “allow for the consumer market for three-row EVs to further develop and enable Ford to take advantage of emerging battery technology.”
At the same time, the automaker will expand its hybrid lineup across its entire existing portfolio of combustion engine vehicles by the end of the decade.
“As the No. 2 EV brand in the US for the past two years, we are committed to scaling a profitable EV business, using capital wisely and bringing to market the right gas, hybrid, and fully electric vehicles at the right time,” CEO Jim Farley said in a statement.
“Everybody seems to be adapting to the slowdown in growth in EVs by delaying programs,” Fiorani said, “and Ford’s the latest of them.”
Meanwhile, Reuters reported that Tesla is focusing on developing a robotaxi instead of the affordable EV while warning that Wall Street had been eagerly awaiting the cheaper EV to fuel Tesla’s sales growth.
Fiorani said, however, that introducing a less expensive model would put pressure on Tesla’s profit margins: “The right time for such a model may be in five years, but currently there’s very little market for it.”
EV sales have been slowing down even as the sector faces increasing competition from Chinese manufacturers that have debuted a slew of affordable models. Tesla reported an 8.5% YoY sales decline in Q1.