Slow EV Sales Delay Automakers’ Investments and Reduce EV Prices
By IER – November 15, 2023
With slower than expected sales in electric vehicles, automakers are questioning their multibillion-dollar investments in new factories and raising doubts about the effectiveness of Biden’s federal incentives. General Motors delayed plans to expand its electric pickup truck production at a plant in suburban Detroit, and canceled a program with Honda to sell electric vehicles for around $30,000. Ford paused its $3.5 billion EV plant in Marshall, Michigan and $12 billion of its planned $15 billion EV investment, citing market conditions. Despite $1.7 billion of promised taxpayer incentives for the plant and site readiness, Ford is not confident it can run the Michigan plant competitively.
- Electric vehicles are now some of the slowest sellers on dealership lots.
- President Biden’s climate law, the Inflation Reduction Act (IRA), stimulated a surge of investment in electric vehicle production across the country, including tens of billions of dollars on battery plants across the South and new assembly lines near the Great Lakes.
- The vehicle transition is effectively subsidizing China, which leads the world in electric-car manufacturing and battery technology and is home to vast stockpiles of critical minerals needed for batteries and other components.
IER – Institute for Energy Research