We are inundated with alarming headlines screaming about the collapse in demand for electric vehicles. But wait a minute, let's slow down. What is truth in all this? Today I'm talking to you about a topic that is making a lot of noise, but which could just be smoke and mirrors. Get ready for a journey through data, declarations and, why not, some well-packaged lies.
The media deception
A phenomenon in recent weeks has been giving breath and vigor to the arguments of those who love stuffing dinosaur carcasses into a four-wheeled oven. Comments full of fossil pride take hold on social media, based on "have you seen? The electric car is a bluff, it is collapsing!”.
Akio Toyoda, a staunch conservative, has raised his head again after declaring last year that it would be better to convert the cars in circulation rather than produce new electric cars. Now he writes “I told you! The electric car has no future."
Yes: the idea that the demand for electric vehicles is in decline has spread like wildfire, or rather like oil. But is it really like that? Or is this a desperate move by traditional automakers to divert attention from their problems?
The growth of Tesla
First of all, let's take a look at the numbers. Tesla, the electric car giant, is growing at a pace almost 40%. And this despite high interest rates and production disruptions for Models 3 and Y. So, where's the breakdown?
Global demand is still up 50% this year.
Paul Pallaghy, PhD and industry analyst
The difficulties of traditional car manufacturers
I told you about Toyota. Stellantis and the Germans are no different. The emblem of the "coordinated" choice of traditional brands is Ford and GM, however. The two giants of the automotive industry are facing difficult times. Ford, for example, it earned approximately $1,8 billion (converted into euros, approximately 1,5 billion) last quarter with internal combustion vehicles, but it lost around 1,3 billion of dollars (around 1,1 billion euros) on EVs. Not to mention the ongoing strike by workers from the United Auto Workers union it's costing GM about $200 million a week in losses.
All numbers that speak for themselves. Nonetheless, by slipping projects here and there, the company has nevertheless declared that it will maintain its goal of producing one million electric vehicles in North America by the end of 2025. Go ahead.
We just need ordinary people to buy fossil fuel for a few more years, so as to give oxygen to old companies to become new ones. Then, the news about electric cars catching fire like matches will magically disappear.
The distorted narrative
Many mainstream media and Wall Street analysts are spreading the idea that EV demand is declining. But is it really like that? Or is it just a way to justify their inability to compete with Tesla and other more innovative automakers?
These recalls indicate that companies have bet too about electric cars or just tackling obstacles in their transformation towards an electric-dominated future? The same CEO of GM, Mary Barra, said he believed in the second option. Jim Fairley at Ford he was even more honest: he promised investors profits from their next-generation EV platform. The current one, they also know, is not able to sustain the costs.
Simply put, Tesla's move to cut prices on its cars has once again "broken" the industry. A drastic, expensive move (-44% profit and stock temporarily at – 9%), but necessary. Traditional manufacturers, who started out late with electricity, cannot make a profit if prices fall. And if they remain high, people are still not willing to buy. What do you see that is so epochal? It's the market, baby. If you don't know how to adapt to changes, change jobs. It's not like we can have chariots with horses forever, just because you only know how to produce them and pay the "newsies" to convince the people that nothing else is needed.
How are things, then?
In conclusion, demand for electric vehicles is not collapsing; it's simply exposing the weaknesses of traditional automakers. And while the latter try to justify their failures covered by well-aligned media (who first played the fanfare to push them into the competition, and now say the opposite to limit the damage).
Traditional manufacturers still make a significant profit by selling old vehicles, real four-wheeled zombies. They want to squeeze this lemon and at the same time hit the companies that have focused solely on electric. Get some air, give yourself time to adapt (at the expense of those who will be persuaded to buy new petrol cars again, in the year 2024).
Despite the challenges, there is reason to be optimistic. New technologies are emerging, and with them new opportunities. The brands that focus on electric are literally flying. Tesla multiples are between 10 and 20 times higher of German car manufacturers, and companies such as the Chinese Byd they run even faster. Don't be fooled by negative narratives. Sooner or later you will stop burning oil to move, if you don't join in with some piper's "interested" tune. And unless you like doing it.
