Despite major electrification plans pushed by Joe Biden’s Inflation Reduction Act (IRA), it seems that electric cars are less attractive than expected. The reason: the insufficient number of charging infrastructure as well as the limited autonomy of vehicles in a country where distances are very long and public transport is insufficient. Inflation and high borrowing rates have also pushed Americans away from electricity, which is more expensive than their thermal equivalent. Several American manufacturers are recalibrating their vehicles, reviewing their objectives, delaying projects to sell their stocks.
“ The slowdown in sales of electric vehicles is more marked than for other categories of vehicles and the economic context is not the only explanation », Comments Neil Saunders, director at Globaldata, for AFP.
The battle of European manufacturers on the market
According to a study by CTA, organizer of the Electronics Show (CES) in Las Vegas, 76% of drivers considering purchasing an electric vehicle consider it a reliable form of transportation. But the purchase cost remains one of the most problematic points with the lack of charging points. Indeed, the difference between electric and thermal vehicles in the United States is higher than in Europe, since a liter of oil is half as expensive as on the Old Continent.
However, some manufacturers have relied heavily on the United States. This is the case for Stellantis, where the country represents the leading sales market. The manufacturer is banking on 50% of its sales being electric by 2030 in the second largest automobile market in the world, behind China. Volkswagen also announced an investment of 2 billion euros in South Carolina to produce electric SUVs and pick-ups.
But in the country, the king of electricity remains Elon Musk. The Tesla manager also indicated that he “ is concerned about the high interest rate environment we are in ” in insisting on the need to reduce the price of vehicles so that household monthly payments remain stable. The group, which has made several declines in recent months, sold more than 490,000 of the approximately 873,000 new electric vehicles sold over the first ten months of the year, according to specialist Kelley Blue Book. By the end of 2023, Elon Musk will launch his Cybertruck, his new futuristic electric pick-up, designed by trying to reduce its production costs as much as possible.
Reduce costs by simplifying vehicles
For John Lawler, Ford’s financial director, we must return to the pre-Covid and pre-inflation level of 13% of the monthly household budget devoted to automobiles. Manufacturers are seeking to reduce the number of vehicle parts in order to lower costs.
“We are doing everything possible to simplify the vehicle,” said Elon Musk.
The American giant General Motors also postponed by one year, to the end of 2025, the conversion of its Orion (Michigan) assembly plant. “ We have identified technical improvements that we will implement to increase the profitability of our products “, he clarified.
Recently, Reuters even mentioned the idea of a single part for the chassis of a future Tesla at 25,000 euros. For Emmanuel Rosner, analyst at Deutsche Bank, “ expectations were so high that we are seeing a collapse. It’s all a question of price and manufacturers have not yet found the economic equation to make it cheaper “, he said on CNBC.
In France too, electric is struggling
The slowdown in electric power was also observed in France. Lately, demand has run out of steam even though sales continue to increase, linked to late deliveries of vehicles purchased several months ago.
“ The questions of energy capacity, the territorial coverage of charging stations, the evolution of the cost of energy are all uncertainties which slow down the adoption of electric vehicles », Estimates Julien Pillot, teacher-researcher and economist at INSEEC.
In Europe, France is one of the countries that has the most doubts about electric technology in automobiles. According to a recent survey by the Cetelem Observatory, prAround 60% do not think that the electric car will embody technological progress which could improve the environmental footprint of the automobile. Only Austria is at the same level of doubt, while the European average is 40%.
“It is up to a number of manufacturers to clarify their industrial and commercial policy, as well as their communication, in order not to be permanently subject to competition which is often one step ahead on the electrical issue. Just as it is up to public authorities to adopt a clear and stable line, without procrastination, to facilitate the energy transition in the automotive world. concludes the Cetelem Observatory.