Now, GM and others are starting to hedge their bets. Some are pulling back from aggressive sales predictions; cutting jobs at plants that make electric vehicles, as Ford recently announced it will do in April; and reducing production targets for EV batteries. Hertz just ditched 20,000 Tesla, BMW, and Chevrolet EVs from its rental car fleet, in part because their resale value fell so much.
You can’t blame people if they’re confused by this U-turn. After all, EV sales in the United States have gone from practically zero to more than a million in a relatively short time. Last year, around 1.2 million EVs were purchased nationwide — five times as many as just five years ago.
Automakers plan to introduce at least 75 new EVs between now and 2030, from virtually every nameplate.
But reality is catching up with big EV dreams, says Robby DeGraff, product and consumer insights analyst at AutoPacific, a consulting firm. “2024 is going to be the defining year for where we go on EVs,” DeGraff declares.
I’ve always been skeptical that the big EV transition would happen the way the car companies said it would. I’ve seen them make bold predictions before. Around Detroit, such things are called the “silver bullet” solution.
In the 1980s, Japanese carmakers’ voluntary restraints on their exports were supposed to stop their sales march in the United States. Instead, those companies built plants here. In the 1990s, overhauls at Cadillac and Lincoln were going to block Mercedes and BMW from dominating the luxury scene. More recently, driverless cars were going to eliminate traffic jams. Instead, some have run over pedestrians.
Bold plans aside, Detroit carmakers’ hearts were never in the development of EVs, for one reason: profits. Cars of all kinds have long been a money-losing proposition. GM, Ford, and Stellantis (which used to be Chrysler) make their billions on SUVs and pickup trucks.
When a shortage of computer chips curtailed production at the beginning of the pandemic, the automakers collectively prioritized big vehicles. That made financial sense: If you have a scarce resource, you put it where it will bring you the most money. But the shift overwhelmingly tipped their sales balance to trucks and SUVs, which amounted to 80 percent of auto sales in 2022, according to AutoPacific. Trucks and SUVs had only half the market as recently as 2012.
It’s almost as though the snowstorms and infrastructure issues provide an excuse to ease back on EVs. When temperatures plunged in Chicago this month, EVs froze shut, batteries died, and those who were able to charge their cars found that it took much longer than normal. This is no secret: The colder it gets, the more energy batteries need to charge. It’s why, back in the 1990s, GM marketed its first electric car, the EV1, only in California, Arizona, and briefly in Georgia.
It used to be that the big fear surrounding EVs was range anxiety — worries that a vehicle couldn’t go very far. Now the worry is charging anxiety, the idea that stations might not exist or be out of order. The Biden administration is supposed to be spending $7.5 billion on chargers as part of its infrastructure plan, but not a single one was built in 2023, according to Politico.
Advances are coming. Late last year, Detroit got the first electric charging road in the United States. It’s still in the testing stage, but when it’s fully operational, EVs that are equipped with special receivers can simply drive over the pavement and charge their batteries.
The EV market still has a long way to go, however. While there are 1.7 million EVs now in use in the United States, that’s a minuscule number compared with the more than 283 million gasoline-powered vehicles registered across the country.
The average life of a new vehicle is around 12 years, and I’m sure you know someone whose car is older. I kept my most recent car for 14 years and would have hung onto it longer if it hadn’t gotten into an accident. So even if every vehicle sold from 2024 forward is an EV, it will still take at least until the middle of the 2030s to get all those gas-powered cars off the road.
Another factor that could dampen sales: The IRS has changed eligibility this year for claiming a $7,500 EV tax credit. Fewer vehicles qualify than in the past, and not all Teslas are included, even though it is the best-selling US make.
And given the problems that EVs have run into lately, DeGraff at AutoPacific says he wouldn’t be surprised if some drivers switch from battery-powered cars back to gasoline-powered ones while other people take EVs off their consideration list altogether.
That could even happen before any of those 75 new EV models hit the road. Apparently, automakers built so many luxury pickups last year that they now have a glut of them, and analysts believe that big discounts are on the way.
Those deals could mean yet another delay in the arrival of America’s EV future — if it ever arrives at all.
Micheline Maynard is a business journalist and the author of five books including “The End of Detroit: How the Big Three Lost Their Grip on the American Car Market.” She is based in Ann Arbor, Mich.