Jan 22, 2020 - Energy & Environment

Sluggish sales throw the future of electric vehicles into uncertainty

Illustration of a digital pothole

Illustration: Aïda Amer/Axios

The flurry of high-profile electric vehicle rollouts lately makes it easy to look past a big problem for the sector: tepid consumer demand means it's unclear when the EV age will begin in earnest, at least in the U.S.

Driving the news: Several recent stories underscore how drivers remain cautious about ditching gas pumps for plugs — even as automakers make big bets on bringing a slew of new models to market.

Why it matters: Year-end sales data tells the story of a sector struggling to find footing once you look past the big year by Tesla (which by the way saw its valuation hit $100 billion in trading yesterday before receding).

  • This Los Angeles Times story, citing Edmunds data, notes that 325,000 electric and plug-in hybrid vehicles sold in the U.S. last year, down from 349,000 from 2018.
  • “The number of battery-electric models available more than doubled last year, but EV sales didn’t budge much. That’s troubling,” AlixPartners' Mark Wakefield tells the paper.
  • Sales also slumped badly in China, the world's biggest auto market, starting in the middle of last year when the government slashed incentives.

The intrigue: Bloomberg points out that Tesla saw record sales last year, but cautions that the Silicon Valley company's success isn't spilling over into the wider EV market — yet.

  • "Look at every other corner of the U.S. auto industry — the world’s most valuable automaker, dealers, consumer surveys and market forecasts — and a more ominous picture emerges," they report.
  • A growing number of models will be fighting for space in what will remain a small market for a while. Jeff Schuster of the firm LMC, quoted in Bloomberg, says of the EV future, "It’s a long road and there definitely could be some carnage along the way.”
  • A Wall Street Journal story this week features pessimistic comments from Subaru officials.

What we're watching: Whether the sluggish sales and policy headwinds in the U.S. and China are enough to substantially change long-term global forecasts.

  • The research firm BloombergNEF studies the EV future especially carefully and tends toward the bullish side, seeing major growth as battery prices fall.
  • Its last big outlook projected that annual global passenger EV sales will reach 10 million in 2025 and 28 million in 2030. The next one arrives in May.

Go deeper: Electric vehicles face an uncertain policy landscape in 2020

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