With the electric vehicle (EV) chasm (a temporary demand stall) coinciding with the end of U.S. EV subsidies and the European Union (EU) pulling back its phaseout of internal combustion engine cars, global automakers are making sweeping changes to their EV strategies. Ford is a prime example, deciding to halt EV production even at the cost of tens of trillions of won in losses. Some predict a brake on the global shift to EVs for the time being, but there are also corporations that say they will not loosen the reins on investment in times like these.
According to the industry on the 17th, U.S. automaker Ford decided on the 16th (local time) to halt production of large EV models such as the "F-150 Lightning" pickup truck. The F-150 Lightning was once touted as a "smartphone that can tow" and assessed as a next-generation flagship model, but its U.S. sales last month fell more than 70% from a year earlier to around 1,000 units. Instead, Ford will expand its businesses in gasoline and hybrid cars, low-priced EVs, and energy storage systems (ESS). With this strategic shift, it will incur a loss of $19.5 billion (about 28.8 trillion won) through 2027.
Other automakers are likewise reevaluating their EV strategies. Stellantis scrapped its plan to develop the Ram electric pickup and restarted production of a high-efficiency V8 engine. Volkswagen shut the doors of its Dresden, Germany, plant that had produced the ID.3 EV starting on the 16th. It is the first closure of a plant in Germany in the brand's 88-year history. Volkswagen also said it recently took a loss of €4.7 billion (about 8.2 trillion won) due to moves such as canceling Porsche's EV development.
Corporations that sell only EVs are seeing growth slow sharply. Tesla is expected to post a decline in global sales for the second straight year, following last year. According to market research firm SNE Research, Tesla's global sales from January to October this year were about 1.3 million units, down 7.7% from the same period a year earlier. Recently, Tesla has been focusing on autonomous driving robotaxis and a Humanoid Robot rather than new EV models. China's BYD also sold about 3.32 million units in January–October to hold the world's No. 1 spot, but its market share has fallen to 19.4% from 23.3% last year, showing growing pains.
This stems from the recent EV chasm and intensifying industry competition, compounded by policy shifts. The United States ended its EV tax credit (up to $7,500) policy on Sept. 30. As a result, U.S. EV sales in November plunged about 40% year over year. On top of that, even the EU has scrapped its plan to effectively ban sales of internal combustion engine cars starting in 2035 and will allow limited production of such vehicles. This will inevitably slow the pace of the global transition to EVs.
Still, some say the EV transition is inevitable and signal they will continue to invest. General Motors (GM) Chair Mary Barra said during the third-quarter earnings call, "EVs remain our North Star," adding, "We will continue to invest in new battery technology, new designs, and structural improvements to drive profitability gains." Even though GM booked a $1.2 billion (about 1.8 trillion won) loss in the third quarter due to EV production cuts to match market conditions, it is sticking with its EV strategy.
Britain, unlike the EU, reaffirmed its unchanged goal of phasing out internal combustion engine cars by 2035. In line with that, Nissan recently began producing the new Leaf EV at its Sunderland plant. The Financial Times (FT) said, "The Leaf will become the 'first mass-produced EV' built in the U.K. since 2020," adding that "under the U.K. government's EV subsidies program, the (Leaf) will receive a £3,750 (about 7 million won) discount."