Mar 14, 2024 - Business

EV winter? Tesla sales cooling, while Fisker is wobbling

Illustration of a stop sign with a large snowflake on it with smaller flakes falling around it

Illustration: Natalie Peeples/Axios

Winter might not be here for electric vehicles just yet, but there's frost on the ground.

Why it matters: After years of hype among investors, demands from regulators and buzz among early adopters, the general public remains apprehensive about an EV future.

The big picture: A slew of EV makers are running into obstacles:

  • EV startup Fisker is reportedly weighing a bankruptcy filing less than a year after fellow EV startup Lordstown Motors did the same. (Fisker in a statement to Axios said it's focused on raising additional capital and pursuing a strategic partnership).
  • Lucid Group, another startup, has been scrambling to cut costs.
  • Tesla, with a new affordable model still far out, is barreling toward a sales decline in 2025, Wells Fargo analyst Colin Langan projected this week.
  • And Ford recently slashed production plans for the F-150 Lightning, which had been heralded as a leader in the EV revolution.

State of play: EV makers have been engaged in a price war over the last year or so — but it's not doing much to juice sales.

  • At Tesla, for example, "we see downside risk to volume as price cuts are having a diminishing impact," Langan wrote.

Part of the problem is that more new EVs are flooding the market, shifting the balance of power to deal-hunting car shoppers.

  • And yet "we're seeing the demand or the interest flattening or in some cases declining," analyst Rebecca Lindland tells Axios, citing internal research showing new-EV searches falling 5.1% in February, compared with a year earlier.

Zoom in: For many car buyers, EV sticker tags are still too high despite recent price cuts and tax credits — while concerns linger about charging access.

  • Tesla isn't expected to launch a lower-tier model, dubbed the Model 2, until late 2025. And even then, "launch timing is a concern given planning seemed rushed," Langan wrote.
  • The buildout of federally funded EV chargers has been slower than anticipated.

Yes, but: For many customers, hybrids are the way to go — as evidenced by Toyota's recent hot streak with its hybrids-first approach.

  • "If they're looking to improve their fuel economy without all the concerns of charging and range and plugging in your vehicle, hybrids are a good option for a lot of people," Lindland says.

Our thought bubble via Axios Pro: Climate Deals co-author Alan Neuhauser: EVs have real tradeoffs that consumers rightly care about. Range in general is an issue. The public charging experience sucks. Cars lose a ton of range when it's cold, or when the heat is on, or the A/C.

What to watch: The transition from "EV euphoria to EV winter" could benefit GM and Ford in the short run, despite their EV investments, due to their sales of gas-powered vehicles, Barclays analyst Dan Levy said in a research note.

The bottom line: Gas vehicles aren't going away quietly.

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