After committing $100B to the EV transition, top carmakers shift out of the fast lane

Foot off the electric pedal… US automakers have said in recent years that they’d spend billions on EV production. That seemed like a good bet, especially after the Biden admin introduced financial incentives to aid in its goal that half of all new-vehicle sales should be electric by 2030. But lately they’ve been downshifting: GM, Ford, and even Tesla said they’d delay spending on electric models and factories, citing slower sales and econ jitters as they put tens of billions in investments on ice.

• GM ditched its goal of building 400K EVs by next summer and is delaying the release of some new models as automakers second-guess electric financials.

• Ford pushed back its plan to spend $12B on EV factories, saying customers are reluctant to pay extra for e-whips.

• Tesla (which accounts for half of all EV sales) might delay building a $1B plant in Mexico. Despite steep price cuts, Tesla’s Q3 sales fell from Q2.

Fast but not furious (enough)… Last quarter, US EV sales were up 50% from a year ago, growing faster than any other major car category (like: gas, hybrid) and accounting for 8% of all new cars sold. Still, execs expected even stronger growth to validate the major moolah they’re investing. EV sales growth has cooled, despite price cuts to fuel demand. Not to mention: federal tax credits of up to $7.5K for buyers.

• Car cos say they’re still committed to the electric transition, but intense competition has pushed prices down.

• The EV-price-slashing race has cut into profits, while demand (though strong) isn’t enough to offset the hits.

• FYI: Tesla is the only US carmaker with a profitable EV business, and its profit plunged 44% last quarter after it cut prices by ~25%.