Despite strong support from environmentalists and left-leaning politicians, as a means to combat climate change and promote the green economy, the electric vehicle sector struggles to maintain a foothold in the United States, particularly due to weak demand.
A striking example of this decline is Ford’s recent announcement. Ford, one of the American companies championing this industry behind the giant Tesla, has decided to cancel its plans for an SUV, initially scheduled for 2025, then postponed to 2027, and now ultimately scrapped.
The company has been forced to scale back its plans and choose more modest projects due to lower-than-expected demand and intense competition from Chinese companies. Additionally, Ford has again postponed the opening of its electric truck plant in Tennessee, a major investment for the company, now scheduled to open in 2027 instead of 2025.
According to « Wall Street Journal » estimates, Ford is expected to lose nearly five billion dollars due to estimated sales losses of 44,000 dollars per car sold by the end of the second quarter of 2024.
Ford is not the only company reducing its environmental ambitions. General Motors also announced in July that it is delaying the launch of its new electric « Buick » SUV and postponing the opening of an electric truck plant. General Motors CEO Mary Barra indicated that the company did not want to preempt consumer demand and chose instead to focus on smaller electric models that represent the greatest growth opportunities.
Market observers attribute this retreat to the intense competition from Chinese manufacturers like BYD, rising battery costs, and the difficulty of finding charging stations, which discourages consumers.
However, these decisions are seen as tactical moves while waiting for conditions to improve. John Murphy, an economic analyst at Bank of America, noted in a memo to investors that these decisions are tough in the short term but make sense in the medium to long term.
Experts agree that automakers have no intention of withdrawing from the electric vehicle market. Two forces drive this continued commitment: the tightening of government regulations on emissions and the rapid global expansion of Chinese electric vehicle manufacturers and Tesla.
A recent U.S. law gives automakers until early 2030 to make electric vehicle sales the majority of their sales. The exact percentages depend on the level of emissions from other cars sold.
However, some experts remain skeptical, especially since this industrial sector is closely tied to politics in the United States. Thus, the implementation of all these environmental laws could be halted entirely if a Republican candidate wins the upcoming November elections.
In his election platform, Donald Trump explicitly promises to « eliminate the mandate for electric vehicle manufacturing and reduce costly and burdensome regulatory restrictions » affecting the auto industry. Not convinced of the ecological benefits, Trump also aims to « make America the world’s leading energy producer. »
