Electric cars may have a problem: Too few buyers
Carmakers with ambitious plans to roll out more than a hundred new battery-powered models in the next five years appear to be forgetting one little thing: Drivers aren’t yet buzzed about the new technology.
Electric cars — which today comprise only 1% of car sales worldwide, and even less in the US — will account for just 2.4% of US demand and less than 10% globally by 2025, according to researcher LMC Automotive.
But while consumer appetite slogs along, carmakers are still planning a tidal wave of battery-powered models that may find interested buyers few and far between.
“When you hear people talk about the tipping point, it’s really that they’re counting the number of product offerings,” Hau Thai-Tang, Ford Motor’s global head of product development and purchasing, said of electric cars.
“Nobody can cite what the actual demand will be,” he said.
With battery costs declining rapidly and Tesla’s share price on a tear, carmakers are rushing to get in the game with their own all-electric models.
GM has announced plans to roll out 20 models by 2023, while Ford and Volkswagen are among those planning new electric lineups in China. Toyota Motor this week promised more than 10 electric models by early next decade.
In total, 127 battery-electric models will be introduced worldwide in the next five years, Mr Thai-Tang said, with LMC predicting pure electric offerings will increase by more than five-fold to 75 models in the US alone.
“There’s certainly more hype than real growth in sales volume,” Jeff Schuster, senior vice president of forecasting for LMC, said.
“How long have we been talking about EVs? We’re now finally seeing them in numbers, but the sales numbers are not taking over the industry by any means,” he said.
It’s a mix of panic and promise that’s driving carmakers to set ambitious goals to catch up to perceived market leaders like Tesla and GM.
GM chief executive officer Mary Barra said her company will sell more than one million electric vehicles per year — profitably — by 2026. Tesla CEO Elon Musk had been planning to build half a million electric cars in 2018, although that timeline could be jeopardised by missed production targets for the €29,700 Model 3 sedan.
Wall Street continues to reward Tesla and values the Silicon Valley electric-car maker as worth more than Ford, even as the Detroit carmaker dwarfs Mr Musk’s company. Tesla shares are up about 60% this year, while Ford has gained closer to 5%.
There’s a growing optimism the electric market is ready for liftoff, though the rush to electrify in the face of uncertain demand has left suppliers on edge.
