Steve Levine, editor of The Electric (a newsletter accessible within The Information), recently described the plight of legacy automakers, saying, “…the latest numbers [slow EV sales] have spooked the automakers and robbed them of their courage.” Levine is referring to the courage of legacy automakers to continue their EV development pace as storm clouds gather over the EV segment.
Kara Swisher recently stated on her Pivot podcast that “everyone who wants an EV has already gotten an EV,” suggesting that EV demand is the primary problem with the segment. From Elon Musk’s recent announcements and his company’s price reductions, Tesla is even experiencing the EV category sales slow-down.
As the segment softens, several legacy automakers have announced delays in the development and production plans of some of their EV models as well. For example, General Motors now is pushing back by a year the volume-production of some of its most important EV entrants like the Silverado EV and Sierra EV pickup trucks.
Some industry analysts believe legacy automakers like GM are more disadvantaged than pure play EV companies like Tesla during an EV market that is slowing. However, GM’s profits in the short to mid-term do not depend on EV sales like the pure play EV automakers. For example, during this period of a cooling EV market, GM sold over 221,000 of its high-margin, full-size, ICE SUVs through nine months of this year, an 11% increase over the same period in 2022. More impressively, the company sold over 619,000 of its high-profit, full-size ICE pickup trucks, a 14% increase over 2022.
As Levine suggests, legacy automakers might be losing their courage by delaying EV development as the market softens. Or, as I theorize, maybe this is only courage delayed as these auto companies balance profitable ICE sales with a parallel focus on a slower developing EV future. The momentary hesitation in their EV pursuit might indeed represent not a loss of courage but a strategic pause to ensure they are well-positioned to compete in the EV market of tomorrow while maintaining a robust financial footing today.
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