Written by Ma Xiaolei.
Edited by Wu Jing.
*Wall Street**.
by Mike Colias, Nora Eckert, Sean McLain
Ford's Michigan plant, which produced the F-150 Lightning, was once glamorous, and how lonely it is now.
Biden visited here in 2021 and test-drove the electric pickup truck, which accelerates like a sports car. In the spring of 2022, before the first pickup truck rolled off the assembly line, Ford said it would expand the plant and quadruple production.
Today, the plant's production has been halved, and workers have been relocated to other factories that make gas-powered pickup trucks and SUVs.
It only took six months. Matthew Schulte, who is in charge of vehicle inspections at the Detroit factory, said the sudden change was a bit of a shock. "It's time to wake up," he said. ”
Neglected consumers
Just a year ago, demand for electric vehicles was booming, and automakers were struggling to keep up. However, in just a few months, the tide has turned, with several automakers slowing down the pace of their electrification transition.
*Regulations, corporate climate goals, the rise of Chinese EV manufacturers, and Tesla's estimated $600 billion** valuation all hint at the huge potential of EVs and keep auto companies ready to move.
But they miss an important role: the consumer.
In the summer of 2023, U.S. auto dealers were the first to issue a warning that the electric vehicles in the warehouse were about to "pile up". Companies such as Ford, General Motors, Volkswagen and others have shifted from investing in electric vehicles to delaying or scaling back some projects. Dealers who once "begged" manufacturers to deliver electric cars quickly are now turning them down.
Even Tesla CEO Elon Musk has warned that the company's growth in car deliveries in 2024 will be significantly lower.
Ford CEO Jim Farley said at an earnings conference** in early February: "The second half of 2023 has seen a seismic reversal, and it will soon be clear who wins and loses in the industry." ”
Ford employees listen to Treasury Secretary Janet Yellen speak at an electric vehicle plant in September 2022.
Executives at auto companies have said they will continue to work on the technology. But many have recalibrated their plans.
Ford has scaled back its investment in electric vehicles and may delay some model plans while increasing production of gasoline and hybrid vehicles.
In 2023, Ford lost $4.7 billion on its battery electric vehicle business and expects to lose even more in 2024, between $5 billion and $5.5 billion.
Some auto executives are also starting to "relent", admitting that they misjudged the demand for electric vehicles at the beginning. The ** chain problem during the epidemic caused a shortage of vehicles, the delivery time of electric vehicles was extended, and the queue of scheduled customers was long, creating a "fake boom".
It wasn't until later, when a flood of new electric vehicles flooded the market, that executives realized that car buyers were more discerning than they expected.
Automotive CEOs such as Jim Farley still believe that electric vehicles are the future of the automotive industry, albeit at a slower pace than originally thought. But for now, a serious miscalculation has put the industry in a quandary, facing a potential surplus of electric vehicles, a dismal factory that is half empty, and meeting stricter environmental regulations around the world.
General Motors CEO Mary Barra told analysts, "Ultimately, we're going to follow what our customers want. ”
Fake boom
The percentage of electric vehicles sold in the U.S. is electric **jd. power
In 2020, the automotive market unexpectedly heated up during the pandemic, and traditional automakers shifted from simply getting involved in electric vehicles to launching an all-out assault.
According to consulting firm AlixPartners, traditional manufacturers have ambitious plans to build dozens of battery factories, electric vehicle assembly plants, launch dozens of all-electric models, and pledge to invest more than $5 trillion in the technology by 2026.
Tesla's meteoric rise has added to that sense of urgency. In just a few years, Tesla's market capitalization has surpassed that of traditional car companies. Capital is cheering on the EV strategic move and racing to woo EV startups.
Increasingly stringent vehicle emissions limits have also left car companies with no choice but to keep pushing on electric vehicles or face hefty fines. Biden** has steered the auto industry in a greener direction, providing hundreds of billions of dollars in subsidies for battery production, consumer tax breaks, and electric vehicle charging piles.
As 2023 begins, automotive executives are looking forward to realizing the grand blueprint for electric vehicles.
In 2020, the new Tesla was trucked out of a factory in Fremont, California.
Auto executives are talking about plans to speed up the construction of electric vehicle factories.
GM CEO Mary Bora was one of the first and most vocal advocates in the industry for the transition to electric vehicles. The automaker aims to phase out all combustion engine vehicles by 2035.
Speaking at GM's January 2023 earnings conference, Birla said: "This year has been a breakthrough year. GM began to manufacture its own batteries, and demand for the new electric Cadillac SUV and Hummer pickup truck outstripped supply. ”
Ford was even more daring with the F-150 Lightning's explosive order, raising the pickup's ** by $20,000. According to the research company Jd.According to Power, the average selling price of electric vehicles is already about 1$40,000. Since then, red flags have started to appear.
Danger is coming
In mid-January 2023, Tesla lowered the ** of some models by more than 20%, triggering a series of chain reactions.
Used car dealers with large numbers of Tesla Model 3s and Model Y in their hands found them worth thousands of dollars. Tesla owners who bought expensive ones have said**.
Why are electric vehicles being reduced in price since demand outstrips supply? Bank of America analyst John Murphy asked the soul.
At the time, Musk argued that there was no problem with demand and that the company was simply making the vehicle more affordable, thereby expanding the appeal.
Charging station at Tesla's factory in Travis County, Texas.
Internally, employees analyzed the impact of Tesla's price cuts on Ford's electric vehicle sales. About two weeks later, Ford lowered the ** of some models of its Mustang Mach-E SUV by nearly 9%.
In May 2023, Farley denied pricing pressure in an interview with analysts, saying it didn't reflect interest in electric vehicles. He remained optimistic about Ford's outlook and reiterated plans to expand Lightning production.
Around that time, car dealer Mickey Anderson began noticing the accumulation of electric cars at his stores in Kansas, Nebraska and Colorado.
At first, Anderson and other retailers thought the slowdown was just an accident.
As the time entered the summer, the situation did not improve in the slightest in the days that should have been the peak sales season. It is recognized that in the first half of 2023, U.S. EV sales increased by 50% year-on-year, down from the 71% increase in the first half of 2022.
The first wave of EV fever has receded, and the next round of potential customers are hesitant. According to dealers and surveys, car buyers are rejecting electric vehicles because of concerns about long charging times, high repair costs, and not enough places to charge.
Lyndsey Grover, a pediatric anesthesiologist in Dallas, said her husband had been urging her to buy an electric car in 2023 and replace the hybrid Volvo at home due to environmental concerns.
After test-driving the Rivian SUV, Tesla Model Y, and electric Mercedes, they finally settled on a Volvo plug-in hybrid.
She said that the Tesla Model S needs to be charged at home for an overnight night, and even then, the range is often lower than the estimate displayed by the vehicle. She thinks her family needs at least one gas-powered car.
Be realistic
The number of days from arrival to sale of a new car at a U.S. dealer is taken as a three-month average. **j.d.power
GM has suffered a production hell in battery cells, with deliveries of models such as the electric Cadillac SUV and Hummer pickup truck repeatedly delayed. In late July 2023, GM's Mary Bora was still quite optimistic. She told analysts that the company has a lot of interested customers for electric vehicles, and the reservation list is already long.
Two days later, Ford's Farley expressed the opposite view. "While sales of electric vehicles are still growing, the situation has fundamentally changed," he told analysts. Ford's pricing power in the EV space is declining, and the EV market will remain volatile. ”
Philippe Houchois, an analyst at Jefferies, said he still had a high belief in electric vehicles when he met Farley a few weeks ago.
Farley, on the other hand, said Ford was adapting to market realities.
In 2022, the F-150 Lightning is on the Ford production line in Dearborn.
By the end of summer 2023, Ford dealer Ed Jolliffe's store will increase the number of Ford F-150 Lightning vehicles coming to store each month from one or two to a dozen. It was a good thing, but he was a little worried.
Jolleaf spent $500,000 to build a fast-charging station for electric vehicles. He was ready to rent a billboard on a nearby interstate that read, "There's the fastest charger ahead." ”
"We're all-in," he said. He had to bite the bullet and greet the pickups to the store.
Plans were quickly disrupted. j.d.Tyson Jominy, vice president of data and analytics at Power, said that in the fall of 2023, the average interest rate on buying an electric car increased from 49% soared to 7%, which made some consumers deterred by the high car loans.
Suddenly, the once long waiting list for electric cars shrank, and buyers abandoned bookings.
More pessimistic
The average retail price of a new car in the United States. **j.d. power
Over the course of 10 days in October, automakers in places like Detroit became more pessimistic.
GM said a $4 billion retrofit plan to make electric pickups at a Detroit plant to produce electric pickups will be delayed for a year.
The next day, Elon Musk said that there are not many people who can afford to buy a Tesla due to rising interest rates and a difficult economic situation. He said at a meeting to discuss third-quarter results that affordability was dampening demand.
A week later, at GM's quarterly meeting, Birla called the transition to electric vehicles "bumpy" and said the company would not be able to meet its self-set goal of producing 400,000 electric vehicles in two years by mid-2024.
Two days later, Ford said it would postpone $12 billion in electric vehicle investment and focus on increasing production of hybrid vehicles, citing the need to better meet demand.
By the end of 2023, it has become increasingly clear that sales of hybrid vehicles, which were once considered unnecessary semi-finished products by some automakers, began to surpass electric vehicles in 2023.
Toyota Chairman Akio Toyoda said, "People are finally seeing reality." For years, automakers such as Toyota, which are wary of electric vehicles, have touted hybrids as a consumer-friendly way to reduce carbon emissions.
The average retail price of a new car in the United States. **j.d. power
In November 2023, thousands of U.S. dealers sent a joint letter to Biden asking him to relax his proposed regulations to boost electric vehicle sales. "In 2023, there is a lot of hope and hype about electric vehicles," they wrote. But that enthusiasm has faded. ”
Some auto retailers say they are now selling EVs at a loss, clearing their inventory.
Previously, All-In's Jolliffe store was only a 25-minute drive from the Lightning factory, and he had a hard time understanding what was going on. On a recent weekday, 8 Lightning and 4 Mach-E were parked in his shop.
"Nobody was watching at all, and it hit us hard," he said. ”