The global EV pullback is gaining momentum
Image: Benedicte Desrus
Across the globe, gas-powered vehicles are proving to have more staying power than many policymakers and executives had anticipated.
The latest example came yesterday, when the EU announced plans to back away from its landmark pledge to ban the sale of all new gasoline and diesel-fueled cars starting in 2035.
- Under the bloc's revised proposal, automakers must reduce their emissions fleetwide by 90% compared to 2021 levels, instead of 100%.
- That means most new vehicles sold will be fully electric beginning in 2035. But it also leaves room for plug-in hybrids and conventional gas-powered vehicles.
The EU’s new change comes in response to heavy pressure from the bloc’s automotive industry, which has lobbied policymakers to improve competitiveness and cut some of the rules that companies say are holding them back.
European automakers have had to price their EVs aggressively to hit regulatory targets this year, resulting in a surge in sales but weaker profits.
- Volkswagen, the region’s largest carmaker, reported a loss for the third quarter amid struggles with high production costs and softening demand.
- The company said it sold more lower-margin EVs, while its Porsche brand was hit by major write-downs related to underperforming EV investments.
Across the pond, the story is similar
Earlier this week, Ford Motor announced a $19.5 billion hit mainly tied to its EV business, representing one of the largest impairments in corporate history.
Ford, which has lost $13 billion on its EV business since 2023, said the impairment comes as part of a new strategic shift away from producing EVs and toward gas and hybrid vehicles, where the automaker said it sees “higher-return opportunities.”
As part of the new plan, Ford is canceling a planned electric F-Series truck, repurposing an EV battery plant, and converting its signature electric F-150 Lightning pickup into a hybrid.
Big picture: 50% of global car buyers intend to purchase an internal-combustion engine vehicle in the next 24 months, an increase of 13 points from 2024, according to new research from EY. At the same time, the percentage of car buyers who prefer EVs fell from 24% last year to 14% this year, while hybrid preference declined five percentage points to 16%.
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Sprinkles from the Left
- Some commentators argue that despite the cold shoulder EVs are receiving from the current presidential administration, they still represent the most cost-effective vehicles on the market due to lower maintenance and fuel costs—all while inching towards price parity with gas-powered vehicles.
- Others contend that hitting the brakes on EVs in America will mean less progress in reducing transportation emissions, less strategic US leadership in a key technology of the future, and could also mean less investment to clean up the electricity sector (making EVs worse for the environment).
- “Despite Trump’s acts of sabotage, electric vehicles are here to stay” –Jane Gould, San Francisco Chronicle
- “Withdrawing Support for Electric Vehicles May Affect the Road to Clean Electricity” –Jeremy J. Michalek, Mississippi Free Press
- “Will Ford’s $19.5 Billion EV Charge Be Another Dead End?” –Liam Denning, Bloomberg
Sprinkles from the Right
- Some commentators argue that the while the Biden admin sought to force-feed the EV transition with ramped up regulations, the new GOP leadership’s plan of deregulation has allowed Ford to cut its losses and stop spending tens of billions of dollars on cars that not enough Americans want to buy.
- Others contend that one of the biggest cons in modern American history is the Biden admin’s policies that used the federal government to juice supply for EVs and force people to purchase them—even though the American people weren’t interested in what they’re selling.
- “Ford Learns a Brutal EV Lesson” –WSJ Editorial Board
- “Trump transportation boss blasts Biden's 'EV madness'” –Transportation Secretary Sean Duffy
- “The moment of truth has dawned for the electric-vehicle industry” –Gus Carlson, The Globe and Mail
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