Several major automakers have just announced that they are scaling back production of expensive electric vehicles (EVs) amid declining consumer interest and slow sales.
In a seemingly coordinated move, Ford, Honda, and General Motors all announced significant rollbacks of EV production.
General Motors recently announced it would be slowing electric vehicle production after losing nearly $1 billion from the autoworkers’ strike.
GM’s chief financial officer Paul Jacobson stated that the auto giant would be “moderating the acceleration of EV production” to protect pricing.
GM CEO Mary Barra also said that the company planned on reducing electric vehicle product spending.
The company is simultaneously slowing the launch of several models in order to cut costs.
GM also said it was abandoning targets to build 100,000 electric vehicles in the second half of 2023.
Plans to produce another 400,000 EVs in the first six months of 2024 have also been scrapped.
The company said it didn’t know when it would hit the benchmarks, Business Insider reported.
At the same time, Honda ditched plans to co-develop electric vehicles with GM.
The goal was to produce a brand that could be sold for under $30,000.
However, Honda CEO Toshihiro Mibe said the market was too unpredictable, so the plans were canceled.
“After studying this for a year, we decided that this would be difficult as a business, so at the moment we are ending development of an affordable EV,” Mibe told Bloomberg.
Ford also extended its own deadline to produce 600,000 electric vehicles by another year while also abandoning its target to build 2 million electric vehicles by 2026.
While electric vehicles are seeing manufacturer’s discounts of up to 10%, Mercedes-Benz has reportedly discounted its versions by several thousand dollars.
“This is a pretty brutal space,” CFO Harald Wilhelm reportedly told analysts.
“I can hardly imagine the current status quo is fully sustainable for everybody.”
The fork in the road was entirely predictable, according to Toyota Motor Corporation Chairman Akio Toyoda.
The businessman has argued for years that investing in hybrid (gas-electric) was a better way forward than just electric vehicles.
“People are finally seeing reality,” Toyoda said, according to the Wall Street Journal.
“There are many ways to climb the mountain that is achieving carbon neutrality,” he told reporters.
Despite discounts, electric vehicles are allegedly beginning to stack up at dealerships.
While openly calling out the challenges in the market, Toyota has scheduled at least two electric models for a 2026 release date.
As Slay News reported late last year, Toyoda warned that the “silent majority” in the auto industry doesn’t believe that EVs are the future.
Toyota Motor chief Akio Toyoda revealed this week that he remains skeptical that EVs can replace traditional internal combustion engine (ICE) vehicles as a “single option.”
While speaking to reporters during a visit to Thailand last December, Toyoda warned that most people in the auto industry agree with him.
“People involved in the auto industry are largely a silent majority,” Toyoda said.
“That silent majority is wondering whether EVs are really OK to have as a single option.
“But they think it’s the trend so they can’t speak out loudly.”
“Because the right answer is still unclear, we shouldn’t limit ourselves to just one option,” he added.