Electric car sales rise sharply despite shortage

Americans are buying electric cars at a record pace, unimpeded by high prices and a long wait for delivery, another indication that the twilight of the internal combustion engine is looming.

Battery-powered vehicles calculated 5.6 percent Of new car sales from April to June, it’s still a small slice of the market but doubled the share a year ago, according to industry consultancy Cox Automotive. Overall, new car sales are down 20 percent.

Companies like Tesla, Ford Motor, and Volkswagen could have delivered more electric cars if they had been able to build them faster. Automakers have struggled with shortages of semiconductors, which are more essential for electric cars than gasoline-powered cars, while prices for lithium and other raw materials for batteries have soared.

“The shift is real,” said John Lawler, chief financial officer of Ford, which sold 15,300 electric vehicles from April to June, up 140 percent from the previous year. “Demand for electric vehicles far exceeds what we can supply.”

At the same time, the popularity of electric cars has surprised the industry and exposed the drawbacks that can slow the transition to battery power, which is essential to containing climate change.

One lesson for Ford and other automakers is that switching to electric cars requires them to fundamentally reshape their plants and supply networks. To make the transition, they began to subscribe to the makers advanced batteries, for example, is dealt directly with mining companies to secure rare raw materials. Ford $5.6 billion complex planning Near Memphis to build electric cars.

Automakers and suppliers have announced plans to invest more than $500 billion worldwide through 2026 to modernize factory networks and supply chains, according to consultancy AlixPartners. But it will take several years for the manufacturing capacity to meet the demand.

The lack of public chargers is another hindrance, particularly for apartment dwellers who lack private garages or hallways where they can connect the mains. Many companies compete to build networks, and compete Biden administration They offer financing, but they play catch-up.

See also  New York City workers wait 90 minutes in line for a modern cava lunch

“The market is ahead of the charging network,” said Cathy Zoe, CEO of EVgo, which operates more than 850 fast charging stations in the United States.

Electric vehicles remain significantly more expensive than their gasoline counterparts and are out of the reach of many buyers, even when fuel savings are taken into account. The average price for an electric vehicle in the US is about $66,000, compared to $46,000 for all new cars. One of the reasons is the cost of batteries whose prices have gone up due to the lack of raw materials after declining for years.

“To get to 15 percent of the market, or 25 percent or 50 percent, we’re going to have to attract a much broader segment of the market,” said John Bosella, president of the Alliance for Automotive Innovations, an industry group. “That for me is where the challenge lies.”

While sales of electric cars in the United States are growing rapidly, Europe and China are still far ahead. Battery-powered cars account for more than 10 percent of new cars sold in Europe and about 20 percent in China. Quotas and government subsidies play a large role, but there is also a greater selection of lower-priced models.

Government policy also plays a large role in the United States. California requires manufacturers to sell a certain number of zero-emissions vehicles, and residents there drive nearly 40 percent of electric vehicles on US roads. But the Biden administration’s efforts to promote electric cars nationwide, by show Tax credits for electric car buyers Worth up to $12,500, for example, it faced strong opposition in Congress.

See also  Vehicle production and delivery numbers Tesla TSLA Q1 2022

Felipe Smolka, a partner at EY consultancy who tracks the electric vehicle market, said sales in the United States will gain momentum as battery-powered cars become more common. He said people would be reluctant to buy cars powered by fossil fuels, for fear that they would become obsolete and lose their value when they were resold. Automakers have largely stopped investing in internal combustion engine technology.

“The energy behind this transformation has already reached a point of no return,” said Mr. Smolka.

Not all automakers are equally involved in the electric car boom. Among traditional automakers, there is a growing gap between those who have begun selling cars that can rival the popular Tesla models and those that haven’t.

Major automakers such as Toyota, Honda and Stellantis, the maker of Jeep, Chrysler and Ram vehicles, are largely absent from the US pure electric vehicle market, although they have announced plans for battery-powered models. Toyota started selling a battery-powered SUV, the bZ4X, this year but remember Some of those cars are in June due to the risk that the wheels could come off.

Being early in the market is not a guarantee of success. The Nissan Leaf was one of the first mass-produced electric vehicles, but sales of the model in the United States reached just 3,300 during the second quarter, down 30 percent from the previous year. Nissan replaces the Leaf with the Ariya, an electric SUV that will go on sale this fall.

General Motors, once considered a leader in electric vehicles among traditional automakers, was derailed last year by a difference. Re-Call of electric bolt. There was a danger of the batteries catching fire. GM sold fewer than 500 nails in the first quarter of 2022. In the second quarter, sales rebounded to 7,300, but that was still a 20 percent drop from the second quarter of 2021.

See also  Dow Jones reflects on the background of a hot inflation report; Amazon and Apple rally around profits

For companies with a lineup of electric vehicles, the technological transformation underway is an opportunity to upgrade their profiles. Ford and South Korean automakers Hyundai and Kia, which are siblings of the companies, were the most popular electric car brands in the United States this year after Tesla.

Tesla is still the company to beat, but it’s showing signs of weakness. company More than 254,000 vehicles delivered In the second quarter, down from 310 thousand in the first quarter due to shutdowns and supply chain problems affecting its Shanghai factory.

Tesla’s second-quarter sales were up 26 percent from a year earlier, and the company said it built more cars in June than at any time in its history, a sign of waning supply problems.

However, Tesla faces stiff competition in China, which has the largest car market in the world. BYD, a Chinese automaker that also produces batteries, sold 70,000 pure electric vehicles worldwide in the month of June alone. In Europe, Tesla was second only to Volkswagen, Stellantis and Hyundai/Kia in electric vehicle sales during the first five months of 2022, according to Schmidt Automotive Research in Berlin. (Tesla’s Model 3 and Model Y remained the most popular electric cars in Europe.)

Analysts at Bank of America said in a recent report that Tesla’s market dominance will decline as traditional automakers introduce dozens of electric models. They predicted that Tesla’s share of electric vehicle sales worldwide will drop to 11 percent by 2025, from 70 percent last year.

“Tesla’s dominance in this emerging market segment may be coming to an end,” said analysts from Bank of America.

Leave a Reply

Your email address will not be published.