Electric vehicle sales are still growing strongly, but that demand is not keeping up with the expectations of carmakers and other companies that have invested billions of dollars in the EV space. Expectations for persistently higher interest rates has led companies to alter plans as they eye 2024 warily.
"We're taking immediate steps to enhance the profitability of our EV portfolio and adjust to slowing near-term growth," GM CEO Mary Barra told analysts. Analysts believe consumers' early fascination with EVs is wearing off. While early adopter were willing to pay top dollar for models attracting all the buzz, some consumers are now shying away from today's EV prices well above $60,000.
"As we get further into the transformation to EV, it's a bit bumpy, which is not unexpected," Barra said. "What we're moving to is something that we can react to in a much more agile way to make sure that we have the right vehicles." Musk said he was skeptical to "go full tilt....I don't want to be going at top speed into uncertainty."Germany's Volkswagen last week cut its profit margin outlook for the year, blaming negative effects for raw material hedges at the end of the third quarter. Some of those materials are used in EV batteries.
U.S. automaker Ford earlier this month said it would temporarily cut one of three shifts at the plant that builds its electric F-150 Lightning pickup truck, and in July slowed its EV ramp-up, shifting investment to commercial vehicles and hybrids.