Automakers no longer place all hopes on electrification

Forced electrification of transport is slowly coming to a reckoning. Over the past year, the growth of electric vehicle sales has been declining, and high vehicle prices along with uncertain political and geopolitical challenges have forced automakers to slowly distance themselves from electrifying their fleets.

Just three years ago, everything looked completely different. Crazy announcements about banning the sale of fossil fuel vehicles prompted automakers to commit to electrification and to put all their efforts into this segment of production. Everyone swore to gradually phase out vehicles with traditional engines to usher in a new era of EVs.

The United Nations Climate Change Conference in Glasgow, Scotland in 2021 resulted in an ambitious promise — six major automakers and 30 national governments pledged to stop selling new gasoline and diesel vehicles in leading markets by 2035 and globally by 2040. They likely thought, ‘what does it cost to promise,’ and they must have been aware that such a thing is entirely impossible.

Times have changed

Once a clear vision of a rapid transition to the future of electric vehicles has blurred in less than three years. While industry analysts and automakers still see that electric vehicles will eventually replace gasoline cars, the slowing sales growth, high vehicle prices, and uncertain political outcomes have forced automakers to turn back to tradition.

General Motors, for example, announced back in 2019 that ‘most, if not all Cadillacs will be electric by 2030,’ but now their plans have changed a bit. John Roth, vice president of global Cadillac, suggested in May that gasoline-powered vehicles should remain in the lineup even after 2030 and that they need to ‘coexist for several years’ with electric vehicles.

GM’s shift goes beyond Cadillac. CEO Mary Barra announced during an investor call in January that the company plans to introduce ‘plug-in hybrid technology for selected vehicles in North America.’ This is indeed a shift from GM’s strategy to go ‘all in’ with electric vehicles and to phase out gasoline. The automaker has also adjusted its production plans for existing models. GM had previously forecasted producing up to 300,000 electric vehicles in 2024 and revised that guidance to up to 250,000 in June. GM has also delayed electric vehicle production at its U.S. truck plant by six months and postponed the launch of the first electric Buick, originally planned for this year.

Ford announced in April the postponement of the launch of some electric vehicles. A three-row SUV scheduled for 2025 has been delayed to 2027, and the next generation of trucks codenamed T3, planned for release in 2025, will not see the roads until at least 2026. Ford is also shifting some production away from electric vehicles. The automaker announced on July 18 that the Canadian plant that was to build them will now produce F-Series Super Duty trucks, which have internal combustion engines. It seems that Ford is now focusing all its attention on hybrids, as the company expects to offer hybrid versions of all its internal combustion engine vehicles by 2030.

Hybrid Volvo

Volvo’s chief commercial officer Björn Annwall said last year that the automaker would not ‘sell a single car globally that is not fully electric after 2030.’ No ifs, no buts — Annwall said at the time. But during talks with investors in July, Volvo Cars CEO Jim Rowan said that hybrids ‘form a solid bridge for our customers who are not ready to transition to full electrification’ and that Volvo ‘will continue to invest in this line.’

Volvo has also struggled with delays in electric vehicle production. The company stated that tariffs from the Biden administration on Chinese imports forced a delay in the U.S. launch of the EX30 until 2025. Software issues are plaguing the EX90, whose production was originally planned for 2023 but has been postponed to this year.

Volkswagen’s CEO for passenger cars Thomas Schäfer said in May that expanding the offering of plug-in hybrids is a top priority. He added that customers ‘now want plug-in hybrids, including in China and the U.S.’ Otherwise, Volkswagen has set a goal of 80 percent of electric vehicle sales in Europe and 55 percent of electric vehicle sales in North America by 2030, so it is unclear how this new direction will affect that decision, i.e., goal. Volkswagen also stated that the company will take about $65 billion from its ‘electric utopia development fund’ to invest in internal combustion engine technology.

– The future is electric, but the past is not over – said Volkswagen Group CEO Arno Antlitz in May.

In 2022, GM and Honda announced a partnership to begin producing affordable electric vehicles in 2027 using GM’s Ultium EV platform. But that connection has already been severed. Honda CEO Toshihiro Mibe said in October that after a study, it was determined that this venture would be difficult or impossible, and he withdrew from the collaboration. Despite this turnaround, the roadmap Honda announced in May shows that investments and production are on track for 100 percent battery and fuel cell vehicles by 2040.

Porsche stated in 2022 that it plans for more than 80 percent of new vehicle sales to be exclusively electric by 2030, but the luxury brand is no longer sure of that plan after sales of their electric Taycan stagnated, not to mention that they are in decline. In July of this year, the company stated that ‘Porsche will reach 80 percent when it is good and ready.’

– The transition to electric cars is taking longer than we thought five years ago – the company said in a statement.

Prudent Mercedes-Benz

In 2021, Mercedes-Benz announced that by 2030 it would sell only electric vehicles and hybrids ‘where market conditions allow.’ This warning has proven prudent as the company stated in February that it expects only half of its sales to meet that goal.

– Customers and market conditions will determine the pace of transformation – the company said.

Aston Martin stated in 2022 that it plans to ‘electrify its entire core portfolio of GT sports cars and SUVs by 2030,’ with the first EV vehicle planned for sale in 2025. But that will not arrive either, as they have pushed the deadline to 2027.

– We planned to launch our EV by the end of 2025 and were ready for it, but it seems there is much more hype about electric vehicles, politically motivated or otherwise, than consumer demand, especially at the price of an Aston Martin – said executive chairman Lawrence Stroll.

In 2022, Renault’s CEO Luca de Meo stated that the automaker would ‘be 100 percent electric by 2030 in Europe,’ but in July of this year expressed doubts about achieving that goal.

– The truth is that we are still not on the right track to achieve 100 percent electric vehicles by 2035 – he said.

The British automaker Jaguar Land Rover, under CEO Adrian Mardell, reacted to the changing electric vehicle market by delaying some vehicles for several months for software adjustments and postponing the completion of production of the gasoline crossover. The last Jaguar F-Pace midsize crossover was supposed to be made this summer as JLR gradually phases out the current generation of Jaguar with internal combustion engines. The plan was for the iconic British luxury brand to transition to a higher market with a fully electric line of high-performance electric vehicles starting next year. JLR also planned to release six electric Land Rover models by 2026. In February, the company reduced that number to four, then to two.

The company Bentley has pushed its first EV back two years to 2027 while engineers work to fix software bugs and other technical issues. Bentley also planned to become a brand exclusively for EVs by 2030, but the goals regarding that ambition have shifted. Now, CEO Adrian Hallmark says that Bentley will stick with gasoline engines until 2033.