More alarm bells sound on slowing demand for electric vehicles

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High interest rates are derailing the ambitions of climate regulators and automakers to accelerate the shift to electric vehicles, underscored Wednesday by the scrapping of a GM-Honda partnership and a warning from a battery maker.

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.

Investors have responded to the changed outlook. Over the last three months, the iShares Self-Driving EV and Tech exchange-traded fund has plunged more than 24%, far more than the 8.3% fall for the MSCI All-World Index Like many other industrial firms, carmakers hedge against commodity price swings, and with EV demand slowing, raw material prices have softened, including those used heavily in batteries.

The Japanese motor manufacturer now expects a 15 billion yen full-year loss at its key e-axle business, rather than the profit it had previously seen. E-axle manufacture combines motors, gears and power-control electronics.that third-quarter profit rose 10.7%, its weakest quarter since the start of last year due to slowing demand and stiff competition.

 

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