Released July 18, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--General Motors Company (NYSE:GM) (Detroit, Michigan) was one of the last automakers to abandon its aggressive electric vehicle (EV) sales target. On July 15, that domino fell as Chief Executive Mary Barra said the company would not meet its goal of having the capacity to manufacture 1 million EVs in North America by yearend 2025 "just because the market is not developing, but it will get there. We're going to be guided by the customer."
In the early years of this decade, GM had plenty of company in announcing big bets, often multibillion-dollar ones, tied to electric transportation and the batteries to power those vehicles. In January 2022, one year into the Biden administration's aggressive vision for electric transportation, GM said it would invest $6.6 billion in Michigan alone to build EVs, including electric trucks.
But over the last year, as EV sales failed to meet the targets initially projected, automakers have been scaling back their EV ambitions. Ford Motor Company (NYSE:F) (Dearborn, Michigan), Mercedes-Benz (Stuttgart, Germany), Volkswagen (Wolfsburg, Germany), Jaguar Land Rover, and even EV pioneer Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas), have downshifted the scale and pace of their transition to electric transportation.
It's too early to determine whether any of that will change substantially with the Biden administration's grant of $1.7 billion for automakers in eight states to manufacture EVs, batteries and other clean transportation equipment. The bid to boost EV employment and production was announced July 9.
Recipients of the federal grants include a closed Jeep manufacturing plant in Belvidere, Illinois; a GM factory in Michigan; a plant in Georgia that makes Blue Bird buses; and a Harley Davidson (NYSE:HOG) (Milwaukee, Wisconsin) manufacturing plant in Pennsylvania.
The $1.7 billion in grants will preserve 15,000 jobs and create nearly 3,000 new ones, Energy Secretary Jennifer Granholm told reporters on a conference call after the White House announcement. For more information, see July 15, 2024, article - DOE Awards 11 U.S. Auto Industry Plants with $1.7 Billion.
U.S. sales of electrified vehicles, including cars, trucks, and motorcycles, shot up 40% in 2023, to about 1.4 million units from 1 million in 2022. But that growth was not as high as some had predicted, and 2024 sales to date suggest many consumers remain skeptical about EVs.
Second-quarter U.S. EV sales grew 11.3% on a year-over-year basis, reaching a record-high volume of 330,463 units, according to new estimates from Kelley Blue Book. Even so, first half sales of EVs in the U.S. were only about 600,000 units. On an annualized basis, 2024 sales may come closer to 2002's 1 million than 2023's 1.4 million.
McKinsey & Company (New York, New York) recently surveyed potential and actual EV owners for their views about electric transport. The survey included 36,964 EV owners around the world; results were released last month. In what must have been a dispiriting note for EV supporters, the firm found nearly half--46%--of U.S. EV owners said they were likely to switch back to vehicles powered by an internal combustion engine (ICE) when they bought their next vehicle.
Only Australia had a higher level of EV buyer's remorse at 49%. Japanese EV owners had the lowest level of regret at 13%. Globally, approximately 29% of EV owners said they expected to make an ICE vehicle their next vehicle purchase.
Click on the icon at right to see a graphic summarizing the results of a McKinsey survey of EV owners around the world about their likely next vehicle purchase.
Their top reasons EV owners around the world said their next vehicle purchase was likely to be an ICE vehicle included:
Unfortunately, that cultural outlook tends to cut against EVs, the charging network for which is still in an early stage of being built. The Biden administration's Infrastructure Improvement and Jobs Act of 2021 included about $7.5 billion in funding to build an EV charging network. Its goal is to have 500,000 chargers in the United States by 2030. But getting that money into the field is neither quick nor easy.
The Biden administration wants to accelerate the transition to a post-ICE world because, in the U.S., transportation is the largest emitter of carbon dioxide (CO2), which many experts blame for worsening global warming.
Click on the image at right to see a pie chart of which U.S. sectors accounted for CO2 emissions in 2022.
There are significant incumbent advantages to manufacturing and selling ICE-powered vehicles. For one, fueling stations have existed for over a century in the U.S. Today there are nearly 200,000 fueling stations offering gasoline and diesel in the U.S. While many electric utilities offer rebates for home EV chargers, and the federal government is helping fund the construction of a national network of chargers, the nation's EV charging network remains in its infancy.
The McKinsey study also surveyed thousands of non-EV owners about their likelihood of purchasing an EV. One in five (21%) said they do not want to purchase an EV, a slight decline from the 24% that said that in McKinsey's December 2021 survey. In this year's survey, consumers who said they were uninterested in buying an EV said it was because they were too expensive (45%), they had charging concerns (33%) and they had concerns about an EV's range (29%).
The non-EV owners who might consider purchasing an EV for their next vehicle tended to have higher disposable income, live in urban areas, are significantly younger than other car buyers, tend to drive more miles per year than average drivers, and are more tech savvy compared to what McKinsey called "EV skeptics."
Count David Pickering as an EV skeptic, though he prefers the term "EV realist." Pickering, IIR's vice president of research for Industrial Manufacturing, has long had doubts about the timeline some enthusiasts have for the transformation of transportation in the U.S.
"Cars and trucks mean freedom in the U.S. We're a car culture, for better or worse," he said. "Spur of the moment trips are no big deal. But nothing kills the vibe of a driving trip like having to identify the location of public EV chargers. And then, you have to worry whether vandals have cut the charging cables to steal copper."
"I'm not an EV opponent, but I am an EV realist," Pickering continued. "You don't create a new industry, and a supporting infrastructure, overnight. ICE automakers have a century-long head start on the EV industry. The number of EVs in the U.S. will grow over time, once the vehicles become more affordable and the charging infrastructure is built out."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In the early years of this decade, GM had plenty of company in announcing big bets, often multibillion-dollar ones, tied to electric transportation and the batteries to power those vehicles. In January 2022, one year into the Biden administration's aggressive vision for electric transportation, GM said it would invest $6.6 billion in Michigan alone to build EVs, including electric trucks.
But over the last year, as EV sales failed to meet the targets initially projected, automakers have been scaling back their EV ambitions. Ford Motor Company (NYSE:F) (Dearborn, Michigan), Mercedes-Benz (Stuttgart, Germany), Volkswagen (Wolfsburg, Germany), Jaguar Land Rover, and even EV pioneer Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas), have downshifted the scale and pace of their transition to electric transportation.
It's too early to determine whether any of that will change substantially with the Biden administration's grant of $1.7 billion for automakers in eight states to manufacture EVs, batteries and other clean transportation equipment. The bid to boost EV employment and production was announced July 9.
Recipients of the federal grants include a closed Jeep manufacturing plant in Belvidere, Illinois; a GM factory in Michigan; a plant in Georgia that makes Blue Bird buses; and a Harley Davidson (NYSE:HOG) (Milwaukee, Wisconsin) manufacturing plant in Pennsylvania.
The $1.7 billion in grants will preserve 15,000 jobs and create nearly 3,000 new ones, Energy Secretary Jennifer Granholm told reporters on a conference call after the White House announcement. For more information, see July 15, 2024, article - DOE Awards 11 U.S. Auto Industry Plants with $1.7 Billion.
U.S. sales of electrified vehicles, including cars, trucks, and motorcycles, shot up 40% in 2023, to about 1.4 million units from 1 million in 2022. But that growth was not as high as some had predicted, and 2024 sales to date suggest many consumers remain skeptical about EVs.
Second-quarter U.S. EV sales grew 11.3% on a year-over-year basis, reaching a record-high volume of 330,463 units, according to new estimates from Kelley Blue Book. Even so, first half sales of EVs in the U.S. were only about 600,000 units. On an annualized basis, 2024 sales may come closer to 2002's 1 million than 2023's 1.4 million.
McKinsey & Company (New York, New York) recently surveyed potential and actual EV owners for their views about electric transport. The survey included 36,964 EV owners around the world; results were released last month. In what must have been a dispiriting note for EV supporters, the firm found nearly half--46%--of U.S. EV owners said they were likely to switch back to vehicles powered by an internal combustion engine (ICE) when they bought their next vehicle.
Only Australia had a higher level of EV buyer's remorse at 49%. Japanese EV owners had the lowest level of regret at 13%. Globally, approximately 29% of EV owners said they expected to make an ICE vehicle their next vehicle purchase.
Their top reasons EV owners around the world said their next vehicle purchase was likely to be an ICE vehicle included:
- Public charging infrastructure not yet good enough for me (35% of worldwide survey respondents)
- Total costs of ownership too high (34%)
- Driving patterns on long-distance trips too much impacted (32%)
- Cannot charge at home (24%), and
- Needing to worry about charging is too stressful (21%)
Unfortunately, that cultural outlook tends to cut against EVs, the charging network for which is still in an early stage of being built. The Biden administration's Infrastructure Improvement and Jobs Act of 2021 included about $7.5 billion in funding to build an EV charging network. Its goal is to have 500,000 chargers in the United States by 2030. But getting that money into the field is neither quick nor easy.
The Biden administration wants to accelerate the transition to a post-ICE world because, in the U.S., transportation is the largest emitter of carbon dioxide (CO2), which many experts blame for worsening global warming.
There are significant incumbent advantages to manufacturing and selling ICE-powered vehicles. For one, fueling stations have existed for over a century in the U.S. Today there are nearly 200,000 fueling stations offering gasoline and diesel in the U.S. While many electric utilities offer rebates for home EV chargers, and the federal government is helping fund the construction of a national network of chargers, the nation's EV charging network remains in its infancy.
The McKinsey study also surveyed thousands of non-EV owners about their likelihood of purchasing an EV. One in five (21%) said they do not want to purchase an EV, a slight decline from the 24% that said that in McKinsey's December 2021 survey. In this year's survey, consumers who said they were uninterested in buying an EV said it was because they were too expensive (45%), they had charging concerns (33%) and they had concerns about an EV's range (29%).
The non-EV owners who might consider purchasing an EV for their next vehicle tended to have higher disposable income, live in urban areas, are significantly younger than other car buyers, tend to drive more miles per year than average drivers, and are more tech savvy compared to what McKinsey called "EV skeptics."
Count David Pickering as an EV skeptic, though he prefers the term "EV realist." Pickering, IIR's vice president of research for Industrial Manufacturing, has long had doubts about the timeline some enthusiasts have for the transformation of transportation in the U.S.
"Cars and trucks mean freedom in the U.S. We're a car culture, for better or worse," he said. "Spur of the moment trips are no big deal. But nothing kills the vibe of a driving trip like having to identify the location of public EV chargers. And then, you have to worry whether vandals have cut the charging cables to steal copper."
"I'm not an EV opponent, but I am an EV realist," Pickering continued. "You don't create a new industry, and a supporting infrastructure, overnight. ICE automakers have a century-long head start on the EV industry. The number of EVs in the U.S. will grow over time, once the vehicles become more affordable and the charging infrastructure is built out."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
