Electric vehicles (EVs) were once seen as the future of transportation. Companies invested billions in developing new battery technologies and EV models. But recently, the rapid growth in EV sales has slowed down. While there is no major cause for alarm yet, car manufacturers are beginning to worry.
In the early days, electric cars were very popular. Sales of EVs skyrocketed in many markets around the world. People were excited about the new technology and the promise of a cleaner environment. Companies like Tesla, Ford, Volkswagen, and Mercedes-Benz quickly jumped on the bandwagon, investing heavily in EV production.
Tesla, the world’s largest EV maker, has faced some difficulties recently. The Model 3 and Model Y, which were once very popular, are not selling as well as they used to. In the third quarter of this year, Tesla’s sales only increased by 6.4%. This small increase was mainly due to the new Cybertruck, which helped boost overall sales. However, the demand for smaller Tesla models has been disappointing. Tesla also faces strong competition from Chinese companies like BYD, which is rapidly expanding its market share.
ALSO READ: Chinese EVs Flood Australian Market, Benefiting Consumers but Raising Concerns
Ford Motor Company is also experiencing a drop in demand for its EVs. One of its best-selling models, the F-150 Lightning, is not as popular as it once was. Ford has decided to shut down its Michigan plant, where the electric truck is made, for seven weeks. This shutdown is an attempt to balance production with the lower demand. Ford stated, “We continue to adjust production for an optimal mix of sales growth and profitability.”
European car manufacturers are also struggling. Volkswagen is planning temporary plant closures in Germany due to slowing demand. Mercedes-Benz reported a 50% drop in its third-quarter profits. The European market is also facing competition from Chinese electric car brands. Despite higher tariffs on China-made EVs, European companies are finding it hard to compete.
ALSO READ: Study Reveals 46% of U.S. EV Owners Consider Returning to ICE
According to Goldman Sachs analyst Kota Yuzawa, several factors contribute to the global slowdown in EV sales. Local issues, such as the uncertainties surrounding the U.S. presidential elections, affect consumer confidence and purchasing decisions. Additionally, the growing interest in pre-owned EVs is impacting the market for new models. Many manufacturers are also struggling to present a clear value proposition to potential buyers. This lack of clarity further dampens new sales, as consumers remain uncertain about the long-term benefits and cost savings of owning an EV
In India, the situation mirrors global trends. The absence of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme has led to a decline in electric car sales for four consecutive months, although electric two-wheeler sales remain strong. Maruti Suzuki, the country’s largest carmaker, plans to introduce its first electric car by early 2025, with Hyundai and Mahindra also aiming to expand their electric portfolios. The Hyundai Creta electric is slated for a 2025 debut. However, whether these companies can drive substantial volume growth remains uncertain.
Collaborations between companies, such as the partnership between Suzuki Motor Corporation and Toyota Motor Corporation, highlight a strategic approach to navigating the evolving market. Suzuki will supply Toyota with an EV model manufactured at its upcoming facility in Gujarat, India. The Maruti Suzuki eVX, set to hit production lines in spring 2025, will be the first all-electric model from the country’s largest car manufacturer.
The concept version showcased at the 2023 Indian Auto Expo featured a 60-kilowatt-hour battery pack, offering an estimated range of 400 kilometers per charge. Despite the current slowdown, the future of electric vehicles remains promising. The transition to cleaner, more sustainable transportation is a long-term goal for many countries and companies.
