December 2nd 8th 2023 issue
Americans typically love automobiles as long as they don't run on batteries. Their obsession with the combustion engine has long existed. As a result, carmakers’ EV sales seem not to be happy. Disappointing demand of EV led Automakers to delay investment and ditch their target of output. Battery makers are also a part of this influence, resulting in massive output reduction and layoffs. Obviously this is hardly a good signal for energy transition. It harms efforts to decarbonisation too. What makes Americans shun ev? It is not Americans’ attachment to petrol cars.
The first reason is the unaffordable price. Using an EV costs an estimated $4,000 higher than a petrol car on average. In the 5 year term, the gap varies more widely, reaching $9,000 owing to factors like pricey home charger, dearer insurance and America’s inexpensive petrol.
Second reason is the hard process to get up to $7,500 of new tax credit. In order to enjoy this complicated benefit, EV’s components origin should not be China. Also, Buyers must file a form with their federal income tax-return.
Third reason is quality problems. In recent years EVS have been recalled because of faulty battery packs. Moreover, seven of ten car models found basic problems such as with door handles.
With that reason, consumers’ unwillingness to buy EVs is forcing carmakers to offer discounts to shift inventory. This is good news, only for customers. The offer makes it even harder for the carmakers to make money from battery power, leading to less investment, and eventually, slow growth of everything.
However, the problems mean room for improvement. Many companies are expected to unveil electrified platforms. EV tax credits will also be available at the point of sale from January. Quality problems will be sorted out as the production line matures as well. All this could eventually improve quality, expand product ranges, push down costs and with luck, generate profits for carfirms.
<recap>
- The sales of EVs in America are lagging because of less demand.
- Carmakers are reducing Evs’ output and investment.
- Battery industry is reducing their employees in response.