According to recent reports, the electric vehicle (EV) market has experienced some headwinds compared to the initial exuberance around the novel technology several years ago in a low-interest rate and stimulus-fueled post-pandemic automotive industry. Among those reeling from the pullback in consumer interest, Ford Motor Company is enduring significant obstacles to its EV business.
Reportedly, Ford is set to lose roughly $5 billion on its EV business this year. This figure amounts to a nearly $44,000 loss on every EV the Detroit-based auto manufacturer produces. To make matters worse, Ford’s EV sales experienced a 37% decline last quarter. Last week, in light of troubling financial information, Ford stock posted its worst daily performance since 2008.
Social media users weighed in on the news from Ford, agreeing that the company’s EV unit faces serious challenges. “They have no choice. Tesla is such a leader in this space and the future is really electric, people are just not fully on board, but EV owners are the happiest drivers. No doubt about it. Fast, smooth, quiet, cool in style, and cool in heat. We have two EVs and two ICE. The EVs are far and away the better cars. Solid state batteries are coming on line now with 30-40% weight reduction,” one person wrote, suggesting Telsa has an unquestionable command of the space.
Another user opined that Ford should stick to its areas of competence, such as its fleet of popular gas-powered vehicles. “Agree. Disaster is an understatement. It’d be better for Ford $F to sell it’s EV operations of they can’t achieve profitability and maybe diversify in other areas of the automotive industry or just stick to ICE cars that have been producing for more than a century,” they wrote.
“They made mistake building first EV to the most competitive segment. Quality of car is fine value is the difficult one. They should have started with EV Explorer. Imagine how many they have sold before Kia Ev9/Rivian came now,” another person said, claiming that the strategic direction of Ford’s entry into the EV market was misguided.
All across the supply chain, there have been problems regarding electric vehicles. The American Tribune reported on a letter from last year in which thousands of car dealers wrote an open letter to President Biden urging him to pull back on the EV agenda amid softening consumer demand for the vehicles, where inventory was piling up on car lots.
The letter read in part, “These vehicles are ideal for many people, and we believe their appeal will grow over time. The reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs [battery electric vehicles] arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots.”
It added, “Mr. President, it is time to tap the brakes on the unrealistic government electric vehicle mandate. Allow time for the battery technology to advance. Allow time to make BEVs more affordable. Allow time to develop domestic sources for the minerals to make batteries. Allow time for the charging infrastructure to be built and prove reliable. And most of all, allow time for the American consumer to get comfortable with the technology and make the choice to buy an electric vehicle.”
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