Electric car makers pump brakes on further investments amid slowing sales

Makers of electric cars have stalled further investments as sales slowed down.

Bloomberg New Energy and Finance research predicted that it will take three years before the prices of electric batteries are comparable to internal combustion engines. As a result, even though electric vehicle sales across the total industry were 7.9% this quarter, it is only less than a one percent increase from the last quarter, which is scaring off some auto makers into different strategies.

WHERE ELECTRIC VEHICLE PROJECTS FROM THE INFRASTRUCTURE INVESTMENT AND JOBS ACT STAND

Tesla CEO Elon Musk has opted to slash the prices of his electric models, bringing its Model X SUV price tag down $79,990, from $120,990. Now, the Inflation Reduction Act’s federal tax credit for electric SUVs is applicable to the Model X now that its price is under $80,000. Musk confirmed in an earnings call last month that he was attempting to meet consumers where they are, as according to him, “the thing that must be solved is to make the car affordable.”

“A large number of people are living paycheck to paycheck, and with a lot of debt, they have got credit card debt, mortgage debt,” Musk said on the third-quarter call. “We have to make our cars more affordable.”

Musk also has a modest number of its vehicles assembled in China. According to the China Passenger Car Association, there were some 72,115 China-made Teslas delivered to the United States in October, which is 2.6% less than the month before.

Meanwhile, Ford has postponed its second battery plant in Kentucky, as its THE BlueOval City electric vehicle complex in Tennessee was recently added to the four-year contract negotiated by the United Workers Union. GM has delayed production on its electric truck, which is now expected to begin in 2025.

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Researcher Cox Automotive reported the sentiment of auto dealers is similarly low, as “more dealers see the current auto market as weak than see the market as strong.” They cited high interest rates a seemingly lagging economy as their reasons for their wariness.

Audi was alone in its major increase in EV sales at 94% compared to the year before. The industry has increased for 13 consecutive quarters so far.