Major carmakers in the U.S. and Europe are scaling back production of electric vehicles amid overcapacity and are rethinking their ambitious EV sales goals.
EV demand has visibly softened over the past year, leaving legacy automakers in the U.S., Germany, and France struggling with an overcapacity of their EV models as they realize that the transition to fully electrified transportation will be taking longer than they thought.
Carmakers in the U.S., Germany, and France are currently producing EVs at levels of about 40%-45% below earlier expectations, the chief executive of French auto parts supplier OPmobility told Bloomberg on Tuesday.
This “means the capacity that had been put in place by our clients and by ourselves requires continuous adjustment,” OPmobility’s CEO Laurent Favre said.
“We are adapting the way we work with our clients,” the executive added.
OPmobility, which reported today solid earnings growth, nevertheless flagged “a complex environment, marked by a slowdown in the European automotive market, but also lower than expected growth in electric vehicles.”
Rising concerns about EV capital costs, uncertainties around a number of elections this year, especially in the U.S., and a shortage of rapid-charging stations are the three key factors slowing the EV momentum, Goldman Sachs Research analyst Kota Yuzawa said in May.
At the same time, hybrid vehicle sales have accelerated and may exceed forecasts, Goldman Sachs noted.
Automakers have bet on hybrids amid the slowing EV demand.
Ford Motor Company, for example, said earlier this year it is delaying the planned rollout of some of its next-generation EVs as it is expanding hybrid vehicle offerings, in the latest sign that consumer uptake of EVs has slowed down.
More recently, Porsche watered down on Monday its goal to have EVs account for 80% of all sales by 2030, saying this would depend on the market, and that “The transition to electric cars is taking longer than we thought five years ago.”