The U.S. electric vehicle (EV) market is experiencing a slight slowdown, with J.D. Power revising its 2024 sales forecast down to 9% from the previously estimated 12%. This adjustment stems from slower-than-expected growth in the first half of the year, driven by intensified competition from gasoline-powered vehicles.
Major automakers are responding to this trend with strategic adjustments. Ford Motor Company, for instance, has canceled a planned three-row electric SUV and delayed a new electric version of its popular F-150 pickup. General Motors Co. has also postponed or canceled new electric models, reflecting a cautious approach to investment in a market that’s not growing as quickly as anticipated.
Despite the near-term challenges, the long-term outlook for EVs remains optimistic. J.D. Power anticipates EV sales to reach 36% of the U.S. retail market by 2030 and 58% by 2035. This optimistic prediction is fueled by government incentives, growing consumer demand for sustainable transportation, and state-level initiatives like California’s phasing out of internal combustion engines.
The slowdown has also impacted the EV battery supply chain. While battery economics have improved due to cheaper metal and lower cell prices, JPMorgan’s Global EV Battery team has observed further volume revisions. This indicates a wider impact across the EV ecosystem.
Ford’s decision to abandon the production of a fully electric SUV and take a $1.9 billion write-down underscores the industry’s recalibration. However, the company plans to focus on hybrid gas-electric versions of its three-row SUVs, recognizing the continuing demand for fuel-efficient options.
While there are short-term adjustments, the long-term trend towards electric vehicles remains strong, driven by factors like government policies, consumer preferences, and technological advancements. The journey to a fully electric future may have some bumps along the way, but the ultimate destination remains clear.
