Electric vehicles have been prophesied as the transportation of the future. Every car manufacturer around the globe has entered a “perform or perish” mentality where they are investing hugely on battery technology and new ev models. While once booming, the growth of demand for EVs has slowly come to a standstill in the industry. While yet not alarming, car companies are being cautious about what’s happening.
For instance, Ford is not untouched by the agony. Though F-150 Lightning remains a bestseller in the U.S., the firm has announced a seven-week halt at its Michigan facility due to softening demand. “We keep adjusting production for an optimal mix of sales growth and profitability,” Ford said in a statement recently.
Global electric vehicle juggernaut Tesla is not a stranger to such market conditions either. It did register 6.4% increase in Q3 2024 sales but it mostly attributed to the hype behind its new Cybertruck and had masked slow sales on its Model 3 and Model Y. BYD, on the other hand from China, continues to cut its market share away with brutal efficiency against Tesla.
The same challenge stares automakers in the face across Europe as Chinese competition rises on EVs, even with a decision made by the European Union recently to implement more stringent levies on imports from the country. Even with its decision to introduce higher duties on imported goods from the country, the European union still doesn’t see its light in improving EV sales for its automobiles. Volkswagen finally prepares factory shutdowns here in Germany after 87 years; there is worry about potential layoff for employees along with wage-cutting in fear of shutdowns in their factories due to loss in profit figures. Even Mercedes-Benz went down hard and reported their third quarter results to be slashed by a significant 50% of its profit values this year.
Why haven’t EV sales taken off yet globally?
Local factors include the instability of the auto sector in the wake of uncertainty in the U.S. presidential elections. Pre-owned vehicle demand is beginning to negatively impact the sale of new EVs. Slow rollout of fast-charging infrastructure and low value proposition offered by many of the available EV models are added barriers.
The same can be seen in India as well. EV sales have tanked after the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME scheme, died over the past four months, though not in two-wheeler electric vehicles. Nonetheless, the first electric vehicle from the stable of Maruti Suzuki will roll off the assembly line by early 2025. Hyundai and Mahindra have also been bolstering their lineup of EVs with the new Hyundai Creta EV, and Mahindra XUV 3XO EV will soon be here. But do they have the wherewithal to crack good sales numbers in this prevailing market condition?