There is an interesting contrast between the first-quarter results of two of the world’s biggest automakers, and it says a lot about the state of the market for electric vehicles.
The EV market is a mess, awash with excess capacity and experiencing waning growth in demand. That has forced EV manufacturers into a destructive cycle of price cuts in an attempt to move what has been a massive build-up in global inventories. It hasn’t helped that Tesla’s line-up is looking stale and outdated and that its newest model, the Cybertruck, has experienced weak sales – it’s sold only about 4000 – and, very recently, a total recall.
The new,“more affordable” EVs would be produced on existing manufacturing lines and use some existing components to avoid the need to build new plants, although the company said this might result in less cost reduction than it previously expected. Whether robotaxis and low-priced EVs address the larger question of Tesla’s ability to compete profitably in an increasingly difficult market for the still-expanding range of EV manufacturers is an open question.