1. Electric Vehicle Enthusiasm Fades
2. Challenges Facing EV Adoption
3. Impact on Major Auto Manufacturers
4. Market Shifts and Consumer Preferences
5. The Rise of Plug-in Hybrids
6. Future Outlook for the Auto Industry
Jica: Well, on the CBS Money Watch, hybrid cars are back in the spotlight. Sales are surging as all-electric vehicle sales slow down. CBS's Elise Preston is in Los Angeles and took a drive to find out what's happening there. Elise?
Elise: Jica, EV enthusiasm is fading. Slumping sales and production delays make it clear that it's not quite full speed ahead to America's all-electric future. Electric vehicle sales in the US are slugging. Many shoppers say they want lower prices, batteries that last longer, and a reliable charging network.
Interviewer: How long are you going to wait to be able to charge your car?
Shopper: I mean, to be honest with you, you don't really have a lot of choice. The infrastructure is not very good.
Elise: Nationwide, EV sales are down 7% so far this year, causing Ford to delay production of the next-generation electric F-150 and a three-row SUV. GM scaled down its 2024 EV sales projections by as much as half.
Interviewer: What does this mean for the industry over the next five years?
Analyst: I mean, I'd say over the next five to seven years we probably now have about 25-30% less potential EV buyers, and that's a big wake-up call for the industry.
Elise: Production problems caused Tesla sales and stock to fall. Reuters reported that the company canceled plans to build a $25,000 entry-level family sedan. Competitors are coming from all angles. One of those competitors, Volvo, just set a company sales record powered by its popular EX30 electric SUV. While demand is down for EVs, plug-in hybrid sales are up more than 50%, with many of those vehicles qualifying for tax credits.
We are looking at cars. What type would you consider for your next vehicle? Are you sticking with gas, taking a chance on electric, or something in between? Well, the Biden Administration would like you to drive something a little bit cleaner, but electric vehicle sales are not growing as fast as they hoped. In fact, is saying that nearly two-thirds of potential car buyers are unlikely to purchase an EV for their next vehicle. So, Ben Tracy went to Detroit to find out what people might be interested in instead.
Hybrid Demand at Ford
At this Ford plant in Dearborn, Michigan, they make the best-selling vehicle in the country, the F-150 pickup truck. Every 53 seconds, we have a truck come off this assembly line. Courtney Reeves is a production manager. She says on this day, one out of every seven trucks rolling off the line is a hybrid.
Increasing Production
And what was that like a year ago?
A year ago, it was one out of ten.
One out of ten? So a 30% increase?
Correct. So the consumer is really demanding this product.
Hybrid Vehicles Make a Comeback
Hybrids, which run on both battery power and gasoline, are suddenly hot again. Sales had been falling since 2014 but started to rebound in 2020 and spiked last year. Hybrids now make up 9% of new car sales compared to about 7% for electric vehicles.
Featuring a hybrid max power train, they hit the sweet spot for consumers who want to save on fuel costs or lower their emissions but don't yet want a fully electric vehicle because of concerns including price, range anxiety, and evolving battery technology.
Electric-Curious Consumers
So hybrid is the safe space for the electric-curious?
Hybrid is a very good space right now for the electric-curious. We actually see hybrid as a bridge from gas to electric.
Ford's Strategy
Andrew Frick is president of Ford Blue, which makes the company's gas and hybrid vehicles. He says Ford now plans to quadruple hybrid production in the next five years.
When it comes to your truck, you can power it up six ways to Sunday.
Pro-Choice Campaign
In a new ad campaign, the company is positioning itself as pro-choice: gas, power boost hybrid, or all-electric. The power is yours.
Customer Preferences
I assume there's some customer data that is showing you that people did not want to feel like they were being forced into an electric car?
Yeah, we see customers obviously wanting to make the right choices for themselves.
Adapting to Demand
Is it fair to say you're basically going to make whatever car people are willing to buy?
We want to cater to our customers.
Anybody want to jump in the back?
Regulatory Push and Emissions
The Biden Administration has used regulations to push automakers to rapidly electrify their vehicles because, in the US, transportation is the top source of planet-warming emissions. Over its lifetime, an EV produces 50% less CO2 than a gas-powered vehicle. A hybrid cuts it by 25%. So decarbonizing the American auto fleet would not happen as quickly.
Leading in EVs
We want to lead in EVs, full stop.
In 2022, we talked to General Motors CEO Mary Barra as the company said it would stop selling gas-powered vehicles by 2035.
Is this change to all EV inevitable at this point?
I think it's inevitable.
Challenges and Delays
I think any automaker that made an announcement saying they would be all EV by 2030 or 2035 has to be seriously rethinking that right now. Eric Tingwall with Motor Trend says EV prices are dropping, and sales are still growing but at a slower pace. Automakers, including Ford and GM, have postponed certain EV models and battery plants, calling into question President Biden's goal of 50% of new car sales being electric by 2030.
Does that seem possible at all at this point?
Possible, maybe. Likely, almost certainly not. I think the long-term future is electric. The near-term future is hybrid, plug-in hybrid electric, and some gas vehicles as well.
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