Moody's: EV transition will pressure automakers' finances

Ford manufacturing plant for electric and hybrid vehicles in Michigan
Assembly line at Ford manufacturing plant in Michigan. Photo: Bill Pugliano / Getty Images

A new report from the credit rating agency Moody's explores the challenges that automakers will face as they increase production of battery electric vehicles to help meet emissions requirements.

"[T]he transition will pressure returns and is a credit negative for the sector because of the significant capital needed to support the initiatives, the low returns BEVs will generate through the early 2020s, and the hurdles to achieving broader consumer acceptance," the analysts say in a new note.