By Rob MattoxOctober 22, 2023
Three of the biggest producers of electric vehicles are reportedly set to pump the brakes on production, citing a bad economy and higher interest rates thanks to Joe Biden’s bad economic policies. Tesla, General Motors, and Ford all have said they plan to slow production essentially until the economy shows some signs of settling down.
Tesla CEO Elon Musk joined General Motors and Ford in voicing concerns that high-interest rates on car purchases would prevent borrowers from securing financing for expensive electric vehicles. Musk said, “People hesitate to buy a new car if there’s uncertainty in the economy. I don’t want to be going into top speed into uncertainty.”
Musk also is planning to take a wait-and-see approach to the economy before ramping up the planned Tesla factory in Mexico. Musk’s comments came after poor quarterly results across the board. Not only were Tesla’s sales down, but so were earnings per share and vehicle production.
General Motors, for their part, has plans to delay production of the electric Silverado and GMC Sierra pickup trucks by a year, citing flattening demand for the electrified vehicles.
Over at Ford Motors, they are cutting one of the three shifts that currently builds the electric F-150 Lightning pickup truck. The automaker made this decision following a summer where they took some of the focus off of electric, instead looking toward commercial fleet vehicles and hybrids.
Industry analysts expect Ford to lose $4.5 billion dollars on EVs this year alone. The projected loss of $4.5 billion reportedly stems from slower-than-expected adoption of the new battery-powered vehicles. It is becoming clear that consumers either can’t afford the vehicles, don’t trust the technology, and are unwilling to give up gasoline-powered cars.
Another once highly-touted EV startup, Lucid, reported an almost 30 percent drop in third-quarter production. Lucid is citing supply chain issues and slowing demand for the downturn.
In an effort to stimulate sales, Tesla has aggressively dropped prices, and other companies are expected to follow suit soon. Even with lower costs, it is unclear if consumers will embrace electric vehicles. There have been numerous issues with the technology, a decided lack of charging infrastructure, and a lack of trust in terms of the range possibilities of larger vehicles like trucks, especially when carrying a payload.
However, in the end, it likely will just be a matter of dollars and cents. Electric vehicles are very expensive. Despite the promises from the Biden Administration to defray consumer costs with government-funded incentives, many buyers simply aren’t falling for it.
It has become clear that most people don’t feel like gasoline-powered cars are an existential threat to the planet, and many suspect electric vehicles could be a fad that fades away, only to be left with technology that is no longer supported by automakers.
However, as Elon Musk simply put it, “If interest rates remain high — it’s that much harder for people to buy the car. They simply can’t afford it.”
It is increasingly difficult to put food on the table and heat homes in America, so folks are far less concerned with replacing their reliable gas-powered car with an expensive electric vehicle. For the foreseeable future, that is a situation that is likely to remain the same, and that could mean more hard times ahead for EV production.
