Take Ford Motor Company for example: While the F-150 Lightning has been one of its best-selling models in the US, the automaker is now planning a seven-week shutdown of its Michigan facility where the electric truck is manufactured. Why? The demand for the model has decreased from what it was before. “We continue to adjust production for an optimal mix of sales growth and profitability,” the US company said in a recent statement.

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Not even the world’s largest electric car manufacturer is exempt from the prevailing market conditions. Tesla have faced quite the heat with Model 3 and Model Y cars that did not achieve their previous successes. The electric car maker observed sales growth of 6.4 percent in the third quarter of 2024, but analysts attribute this performance to the new Cybertruck compensating for its weak smaller siblings. Tesla also faces stiff competition from the likes of China BIDa brand that has broadened its horizons quite aggressively.

As we sail across the Atlantic, we are beginning to notice a trend of local European automakers having to fend off Chinese competition. The threat from China-made electric cars remains as it is despite the controversial imposition of higher tariffs by the European Union (EU). In the larger context, however, electric cars don’t seem to be doing as well as they did in the past. Volkswagen is preparing for factory closures in Germany for the first time in its 87-year history. The unprecedented move has caused a rift between the auto giant considered too big to go under and its workers threatened with large-scale layoffs and wage cuts. At the same time, Mercedes-Benz has reported third-quarter profits down 50 percent this year.

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What is hurting electric car sales worldwide?

A report prepared by Goldman Sachs Research analyst Kota Yuzawa suggests that there are several different factors involved that are proving to be a challenge for the global EV sector. Some are local, like the uncertainty surrounding the US presidential election and what it means for the auto industry at large.

Among other factors that must be taken into account is an increased demand for used vehicles, which has negatively affected sales of new electric cars. Additionally, the slow pace at which fast charging stations are being built and the inability of manufacturers to offer a real value proposition are two underlying factors that need to be addressed.

Here in India, the absence of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme has meant a four-month-long sales slump for electric cars even as sales of electric two-wheelers are going strong. In the middle of all this, the country’s largest car manufacturer, Maruti Suzukiis preparing to launch its first electric car in early 2025, while others like Hyundai and Mahindra seem dead set on expanding their electric portfolio. For this purpose Hyundai Crete Electric is set for a debut in 2025 while Mahindra XUV 3XO EV is nearing its end. But in the current circumstances, can the likes of Hyundai, Maruti Suzuki and Mahindra play the volume game?

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First publication date: 3 Nov 2024, 08:51 IST