The automotive industry is known for its rapid changes, and this year has been no exception. At this time last year, both foreign and domestic automakers were highly optimistic about the future of electric vehicles (EVs). The consensus was that a predominantly electric future was within reach, with crossovers, pickup trucks, and other vehicles transitioning to battery power. However, the landscape has shifted dramatically.
Ford also announced the cancellation of its plans for an electric three-row crossover and the next-generation Lightning pickup. This move comes amid record-low leasing prices for new EVs and a significant drop in the value of used ones. The underlying reasons for this shift are complex, but one critical factor identified by industry leaders is the state of the EV ecosystem.
Speaking with The Drive at the 2024 Monterey Car Week, Kazuhiro Takizawa, President and CEO of American Honda, and Shinji Aoyama, Honda’s global executive vice president, shared insights into the current state of the EV market. Takizawa emphasized that while EV adoption is increasing, the market downturn is largely due to a weak EV infrastructure. He noted that despite corporate and government incentives, customers are reluctant to switch to EVs if the necessary ecosystem, particularly charging infrastructure, is not in place.
“You can’t force the customer to change their mind, really, and to some degree [you can incentivize] them but we just can’t force the people living in, say, the Midwest, with no charging stations,” Takizawa explained. “Even with incentives they will not change from ICE to BEV. I believe it will be very difficult to force people to go for it. We need to prepare the ecosystem gradually and let them migrate little by little.”
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This sentiment is echoed by Rick Hendrick, a giant in the auto dealership industry. Hendrick remarked in March that “you can’t force customers to buy what they don’t want,” suggesting that the EV market will eventually thrive, but it’s not there yet.
Honda executives were present in Monterey for the unveiling of two new Acura products: the Acura Performance EV Concept and the Integra Type S HRC Prototype. These unveilings highlight Honda’s dual focus on electrification and performance ICE vehicles. Aoyama elaborated on Honda’s strategy, acknowledging that the transition to EVs in the U.S. will be a gradual process. He emphasized that as more EVs hit the road, the ecosystem will adapt more rapidly, marking a significant societal change from the long-established ICE ecosystem.
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“The slowing down of the EV market is not unexpected because the more EVs are running on the road, the more rapid the change of the entire ecosystem for EVs,” Aoyama stated. “It’s not a question of ICE or EVs but of the change of ecosystem as penetration of EVs increases. The [already established] ICE ecosystem starts with petroleum mining, refining, gas stations, and ICE cars. Meanwhile, EVs have totally different ecosystems, so it’s a question of an entire societal change and societal issues so it may take time to change.”
Takizawa and Aoyama both affirmed that battery EVs are the most effective means to achieve carbon neutrality. They maintain a long-term view, expecting the EV ecosystem to evolve step by step. Honda’s current EV efforts include the Prologue, a reskinned Chevrolet Blazer EV based on GM’s Ultium platform, aimed at capturing the interest of Accord, CR-V, and Passport drivers.
Takizawa’s comments came just days before Ford announced its strategic pivot, highlighting the fluid nature of the EV market. Meanwhile, Lucid CEO Peter Rawlinson and Lucid’s president of design and brand, Derek Jenkins, commented at the Monterey Car Week that the EV market’s softening is a “temporary blip,” and warned against a retrenchment into hybrids, describing it as a “blind alley.”
Honda is currently investing $700 million to retool three of its plants and $3.5 billion in a new battery plant for U.S. EV mass production. These moves position Honda to potentially outpace all but Tesla in U.S. EV production
