(ProsperNews.net) – Major car manufacturers are scaling back the production of electric vehicles (EVs) due to low sales. Ford, Honda, and General Motors have all hit the brakes and are scaling back to protect current pricing. Paul Jacobson, chief financial officer with General Motors, said the car giant lost $1 billion during the recent autoworkers’ strike and was “moderating the acceleration of EV production” to ease financial pressures.
The United Auto Workers (UAW) strike – the longest in the industry’s history – cost GM $200 million per month. Tentative pay increase deals were struck, but tensions remain.
CEO Mary Barra said General Motors will reduce its EV spending and push back the launch of several planned models to cut short-term costs. She likewise stated that GM will no longer commit to its previous target of producing 100,000 EVs in the second half of 2023.
Also scrapped are plans to work with Honda to outsell EV frontrunner Tesla. GM and Honda made a deal last year to invest $5 billion to try to overtake Tesla as the EV market leader. “After extensive studies and analysis, we have come to a mutual decision to discontinue the program,” the companies said in a joint press release.
Meanwhile, Ford has pushed back a deadline commitment to produce 600,000 EVs annually and abandoned its ambitious target of 2 million a year by 2026. Mercedes Benz has dropped the price of its EVs, but this has not attracted customers as it hoped. Chief Financial Officer Harald Wilhelm said he cannot see how all manufacturers can survive in a slow EV market. “This is a pretty brutal space,” he added.
Akio Toyoda, chairman of Toyota, said, “People are finally seeing reality.” Mr. Toyoda has long maintained that an immediate transition from gasoline to EV was too drastic, and customers should have more time to adjust. As head of Japan’s Automobile Manufacturers Association, Toyoda calls for investment in hybrid gas-electric cars.
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