The Rough Transition
With American auto industries pushing further and further into EVs, there remain several barriers to entry that have prevented several longstanding automakers from reaping the benefits. Running through September, sales for EVs have increased by 51%; although sales remain to grow, this rate is far slower than the previous year. Demand for several models has remained quite shallow, with prices continuing to fall steeply when compared to combustion-vehicle prices. Since January of this year, the average price of an electric vehicle has fallen roughly 13%, compared to the 3% decline in combustion vehicles. Following the preliminary hype surrounding electric-battery-powered vehicles, the first wave of consumers that truly wanted to pay a premium on these cars has passed, leaving auto manufacturers stuck with several issues.
Experts have attributed the decline in prices to a lack of demand as automakers attempt to attract the “second” wave of hesitant consumers who have hopes of transitioning into a battery-powered car. However, several manufacturers such as Ford and Toyota have slowed their investment into the sales of EVs, finding better margin success in hybrids which are cheaper to make and have recently been easier to sell. For the new vehicle market, EV’s share remained flattened at around 7% throughout the first half of the year, depicting the resilience gas autos have kept as they attract consumers. With billions of dollars from these auto-titans heavily invested in EV production factories, materials, and more, the industry remains at a standstill, hoping this short-term slump doesn’t translate into a long-term trough.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.