FYI: Automakers Scale Back Lofty EV Goals, Risk Falling Behind Global Rivals
Automakers have been scaling back their ambitious electric vehicle (EV) targets over the last year, signaling a slowdown that could have significant repercussions for the market. Research from BloombergNEF suggests this recalibration might lead to millions fewer electric cars, trucks, and SUVs by 2030. The analysts caution that companies that cut back too abruptly may find themselves trailing far behind global competitors like China’s BYD.
The EV Market Shift
The shift in the electric vehicle landscape started about a year ago. Some automakers began announcing a softer demand for EVs, and now several companies have decided to slow down their investments, moving away from their grandiose plans to transition to a cleaner future.
BloombergNEF Report Findings
A recent report from BloombergNEF delves deep into how the automotive industry’s cooler stance on EVs may affect electric car production by 2030. BNEF estimates that the 14 automakers who initially set ambitious EV goals for 2030 are now expected to produce a combined 23.7 million electric cars that year, down from 27 million if they had adhered to their original targets.
"While each automaker sets targets individually, they can collectively transform the global auto market if successfully implemented," BNEF analysts said. "Likewise, collective reductions and scaling back spells trouble for the EV market in the years ahead."
Current Trends and Concerns
Despite this pullback, EV sales globally and in the U.S. are still trending upward, and industry experts foresee long-term growth. A significant portion of the slowing growth is a Tesla-specific issue, yet it has led to more caution among car companies than many had anticipated.
Several automaker sources revealed to InsideEVs that they expected a consistent upward trajectory for EVs that would coincide with a decline in gas car sales. While the sales of internal combustion vehicles have been declining since 2018, there hasn’t been a clear inflection point for EVs as hoped.
Consequences of Scaling Back
This hesitation doesn’t just frustrate EV supporters—it poses long-term risks for automakers. Slowing down too much may result in losing footing in a competitive market. Analysts warned that braking too hard could spell trouble as the competition intensifies.
Examples of Revised Targets
- Ford: Pivoted away from a 2030 all-electric goal in Europe, focusing more on hybrids, such as the Ford Ranger plug-in hybrid.
- Mercedes-Benz: Reduced its target from 100% to 50% EV sales by 2030.
- Volvo: Adjusted its goal from exclusively selling EVs by 2030 to at least 90% EVs and plug-in hybrids.
- General Motors: Scaled back its 2025 target of 1 million EV units in North America.
- Toyota: Cut its 2026 target from 1.5 million EV sales to 1 million.
Market Realities and Strategic Risks
Numerous factors contribute to the slowdown in EV sales growth, including high EV prices, unfavorable interest rates, and consumer concerns about charging infrastructure and range. Traditional automakers also suffer financial losses on EVs due to the steep initial investments required.
Moreover, companies are incentivized to keep their stock prices high and shareholders happy in the short term, particularly when the market sentiment shifts from excitement to doubt. This reaction mirrors the rapid incorporation of AI technologies in various sectors after their initial hype.
Future Outlook
The strategy of slowing down does carry substantial risks. Delaying progress pushes profitability further into the future, as achieving economies of scale is crucial for making EVs financially viable. Meanwhile, market leaders like BYD and Tesla won’t wait for others to catch up, potentially leaving lagging automakers even farther behind.
There is still optimism on the horizon. Automakers have announced plans to sell 528 EV models by 2030, and sales of EVs and plug-in hybrids in the U.S. are projected to increase by 20% this year. Hyundai, Kia, and BMW are highlighted as bright spots that may hit their EV targets. Notably, BYD has already achieved its goal of phasing out combustion vehicles in favor of full EVs and plug-in hybrids.
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William Kouch, Editor of Automotive.fyi
