Even though electric vehicle and hybrid sales grew in 2023, a variety of issues have emerged to cause some automakers to modify future manufacturing targets.
The Energy Information Administration (EIA) reported that sales of hybrid, plug-in hybrids, and battery-electric vehicles in the U.S. rose to 17.7% of new light-duty vehicle sales in the third quarter of 2023.
Additionally, sales accounted for 16% of all new light-duty vehicle sales in the U.S. in 2023 compared to 12.6% in 2022.
EIA attributed the increase in battery-electric vehicles (BEV) to a 5% reduction in the average transaction price in the third quarter to $50,283, bringing the price 24% lower than at the price peak in the second quarter of 2022. “BEV prices are now within $3,000 of the overall industry average transaction price for light-duty vehicles,” EIA stated.
However, recent news indicates the BEV industry hit a few speed bumps that include a decline in consumer buying interest, investors taking a second look at charging companies, resale value, and reliability.
“As a result, electric cars and trucks are piling up on dealer lots, causing auto companies to reassess their investment plans,” the Wall Street Journal reported. “It takes a dealership around three weeks longer to sell a BEV than a gasoline vehicle, according to data from car-shopping website Edmunds. A year ago, battery-powered modes were selling faster than their gasoline counterparts.”
Ford, GM, and other companies are changing their strategy by reducing investments in some vehicles.
Ford announced it will reduce production of its F-150 Lightning, the electric pickup. Hertz said it will replace 20,000 BEVs in its rental fleet with gasoline powered vehicles.
Industry surveys show there is some interest in BEVs among consumers, especially those in major urban areas where there are more charging stations, but many are uncomfortable with the reliability of batteries and other related issues.
Recharging the battery, battery fires, costs of new batteries, and resale value of BEVs have softened the interest of potential buyers.
When consumer interest wains, profitability follows, and investors begin to pull back.
Alex Mills is the former President of the Texas Alliance of Energy Producers.
Alex Mills is the former President of the Texas Alliance of Energy Producers. The Alliance is the largest state oil and gas associations in the nation with more than 3,000 members in 305 cities and 28 states.
