Tesla, Ford, and General Motors, the three largest automakers in the United States, have all announced plans to slow production of electric vehicles (EVs) due to fears of a recession.
Tesla CEO Elon Musk said on a recent call that “people hesitate to buy a new car if there’s uncertainty in the economy,” and that he didn’t want to “be going into top speed into uncertainty.”
Ford has also announced plans to cut one-third of its shifts at the F-150 Lightning EV pickup truck plant. The company said it is shifting focus to commercial vehicles and hybrid options.
GM has also delayed production of its Chevrolet Silverado and GMC Sierra electric pickup trucks by one year.
The moves from the three automakers are a sign that the EV revolution may be slowing down. Several variables, such as supply chain interruptions, inflation, and rising interest rates, are to blame for this.
Impact of the recession on EV demand
A recession would likely lead to a decline in demand for all types of vehicles, including EVs. This is because people are less likely to spend money on big-ticket items when they are worried about their jobs and finances.
In addition, the rising cost of living is making it more difficult for people to afford EVs. EVs are typically more expensive than gas-powered vehicles, and the cost of charging an EV has also been rising.
What does this indicate for EVs going forward?
The slowdown in EV production does not mean that the EV revolution is over. However, it does suggest that it may take longer for EVs to become mainstream.
The automakers are likely to wait until the economy stabilizes and interest rates come down before ramping up EV production again. In the meantime, they are focusing on other types of vehicles, such as commercial vehicles and hybrids.
The slowdown in EV production is a setback for the EV revolution, but it is not the end of it. The automakers are still committed to EVs, but they are taking a more cautious approach due to the economic uncertainty.
