The WSJ writes, automakers are scrambling to unload lingering EVs on dealer lots around the country, now that a $7,500 tax credit that juiced EV sales for years has expired. The EV credit, which expired Sep 30, has lifted battery-powered car sales for years.
Without it, Ford Motor Company CEO Jim Farley predicted, EV market share will fall by more than half to between 4% and 5% of total sales by the end of the year. “We expect a pretty deep fall off,” Farley said.
Dealers have about 134,000 unsold EVs, according to the latest data from Cox Automotive. At the current rate of sales, that means dealers will need two months to sell off the remaining supply. EVs represented an estimated 12.2% of retail sales in September, up 2.6 percentage points from a year earlier for a record share.
For years, Ford and General Motors have been building up a supply chain to support the rollout of numerous EVs, only to see consumer demand dry up and federal support for the technology wind down.
EV growth stagnated in the US partly because of high sticker prices, even with the tax credit factored in. The average EV sold for upward of $57,000 in August, over $9,000 more than a comparable gas-powered car.
Ford and other automakers have recognized they need to significantly rein in costs of EV production if they are ever going to succeed in the US. Ford recently unveiled a $2 billion project to overhaul a Louisville, Ky., factory to build a new line of affordable, high-tech EVs. The first model, a $30,000 pickup, is expected in 2027.
“It’s going to be a vibrant industry, but it’s going to be smaller—way smaller-than we thought,” Farley said.
Our Take 1: Almost 20 years after Elon Musk introduced the first Tesla, auto execs expect the market share for EVs in the US next year to be 4 or 5% of total vehicle sales. Boy, if that’s not a stinging indictment of just how far short of expectations the “electrify everything with renewables” strategy has fallen… nothing is.
Our Take 2: EVs have become a complete money pit. The worst part is it’s not over yet—automakers are having to devise their own subsidies in order to move the excess inventory of EVs still on lots.
Our Take 3: Pro tip… If sales of a product fall by 50% when gov’t subsidies are removed, that product has serious problems. Maybe automakers figure out how to lessen those problems now that subsidies are gone, but it’s going to take some time.
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