The automotive industry is facing an obstacle in switching to electric vehicles: traditional cars. As The Wall Street Journal (WSJ) reported Sunday (July 28), pressures on car company profits only add to the challenge of embracing electric vehicles (EVs), with several major automakers recently releasing earnings that missed market expectations. Among the issues: warranty expenses, […]
The post Automakers Face Roadblocks in Switching to Electric Vehicles appeared first on PYMNTS.com.
The automotive industry is facing an obstacle in switching to electric vehicles: traditional cars.
As The Wall Street Journal (WSJ) reported Sunday (July 28), pressures on car company profits only add to the challenge of embracing electric vehicles (EVs), with several major automakers recently releasing earnings that missed market expectations.
Among the issues: warranty expenses, overstocked vehicle inventory, and problems with overseas operations. On top of that, the report said, investors are worried that the robust pricing power car companies had during the pandemic is waning.
“The results of our competitors are not demonstrating that price pressure is going to vanish,” said Carlos Tavares, chief executive of Stellantis.
The report also noted that Wall Street’s enthusiasm for car companies’ connected car/EV ambitions have faded as well, as demand for electric cars hasn’t taken off as much as expected.
“The overarching feeling for the auto industry is that the good times can’t last,” said Martin French, managing director at auto consulting firm Berylls Strategy Advisors.
In one example of the way carmakers are putting their EV ambitions on hold, Ford announced last week a revised strategy for its Oakville Assembly plant in Canada. That facility was initially designed for EV production, and will now focus on manufacturing larger gasoline-powered versions of Ford’s popular F-Series pickup trucks.
As PYMNTS noted, this marks a shift from Ford’s original intention to launch three-row electric SUVs at Oakville in 2027, a delay attributed to slower-than-expected growth in EV demand.
And as that report asked, where do developments like these leave the future of EV sales? Jennifer Weiss, co-director, NC Clean Energy Fund, said that educating the public about the benefits of EVs is critical to making them a serious consideration for consumers.
“We have a huge hurdle right now getting people to test drive and trying things out and realizing they can do what they do on a daily basis with an electric vehicle,” she said.
“Dealerships right now don’t have a lot of electric vehicles on the lots. It’s the chicken and the egg. Until we see a lot more of the electric vehicles actually on the lots so people can test drive them and compare them to a traditional fuel vehicle, I think we have a little bit more of an uphill climb.”
The post Automakers Face Roadblocks in Switching to Electric Vehicles appeared first on PYMNTS.com.
