October 25, 2023
Toyota’s chairman and former CEO, Akio Toyoda, has long been a skeptic of the electric vehicle hype train—it was a big reason he stepped down from the top job at the Japanese carmaker earlier this year. Now, he can finally say, “I told you so.” With Elon Musk’s Tesla reporting disastrous third-quarter earnings last week, investors are realizing that EVs are no silver bullet for profit. “People are finally seeing reality,” Toyoda said on Wednesday.
Toyoda has long denied that electric vehicles are the only way for the automotive industry to achieve carbon neutrality, saying, “There are many ways to climb the mountain.” Other major automakers are also slowing their EV rollouts. Lucid has slowed production by 30% while GM has delayed the introduction of the Chevy Silverado EV by a whole year.
President Joe Biden has spent much of his time in office aggressively betting on electric vehicles as part of his ambitious agenda to reduce U.S. carbon emissions and fight climate change. But the EV market is wobbling as high interest rates dampen customer demand for electric and other vehicles. That’s “preventing a lot of people from even getting into the market,” Jessica Caldwell, head of insights at Edmunds, told Fortune.
Though EV sales are still growing, the pace has slowed. In the first half of 2023, EV sales rose 49% from one year before, a slower rate than the 63% increase last year, the Wall Street Journal reported.
EV ‘growing pains’
“We’re transitioning to a brand new technology. It’s expensive. It requires people to have a different relationship with their vehicle that has been largely unchanged for decades,” Caldwell said. “So to think that everything was going to roll out smoothly and we follow this nice adoption curve, it was a bit unrealistic.”
Not to mention, Musk—Tesla CEO, owner of the social media platform X, and purportedly the world’s wealthiest man—just took a $30 billion beating to his net worth. EV champion Tesla posted its lowest quarterly earnings per share (EPS) in two years, coming in 10% lower than already-negative analyst forecasts. The stock market acted accordingly, as Tesla’s shares immediately dropped over 17% and the company’s market capitalization fell by $138 billion in just over two trading days.
“This is going to be a large speed bump in the road for automakers that I’m sure that they saw coming,” Caldwell said.
Toyota’s chairman says he saw it coming. Toyoda has long advised the industry to hedge its bets on EVs by continuing to invest in hybrids, hydrogen-powered cars, and other alternative eco-friendly vehicles.
Ford, too, has been slow to put all of its eggs in the EV basket, announcing it would slow production of its F-150 Lightning pickup. Bill Ford, the great-grandson of the automaker’s founder Henry Ford, has described the rhetoric surrounding EVs as “heavily politicized.”
“Blue states say EVs are great and we need to adopt them as soon as possible for climate reasons,” Ford told the New York Times. “Some of the red states say this is just like the vaccine, and it’s being shoved down our throat by the government, and we don’t want it.”
General Motors similarly announced it would slow down EV production after making bullish commitments to completely phase out gas- and diesel-powered vehicles by 2035. The company blamed drops in demand for EVs and pressures from the auto strike.
But this blip is only “growing pains” for the inevitable dominance of EVs in the auto industry, Caldwell said.
“The industry is moving towards EVs—to deny that would probably be unwise,” Caldwell said. “It’s what that path looks like—that’s what’s undefined and is causing more confusion.”
This story was originally featured on Fortune.com
Cool. Can’t happen to a bigger dork. More to come … or less?
Take note: the title image is not from Yahoo.
Today, a typical EV battery weighs one thousand pounds. It contains twenty-five pounds of lithium, sixty pounds of nickel, 44 pounds of manganese, 30 pounds cobalt, 200 pounds of copper, and 400 pounds of aluminum, steel, and plastic. Inside are over 6,000 individual lithium-ion cells.
It should concern you that all those toxic components come from mining. For instance, to manufacture each EV auto battery, you must process 25,000 pounds of brine for the lithium, 30,000 pounds of ore for the cobalt, 5,000 pounds of ore for the nickel, and 25,000 pounds of ore for copper. All told, you dig up 500,000 pounds of the earth’s crust for just one battery.
Not very green if you ask me.
No, it’s not.
And, where is all the electrical power coming from to charge all those batteries?
uhhhh, lightning? 😉
😁
Probably the new car fleet will be a mixture of different types of cars.
EV’s but also hydrogen I think.
I don’t think the energy grids support so many EV’s soon enough.
^bert
That’s one of the biggest points, Bert, the energy grid. I once heard an oral presentation from the German professor Harald Lesch, who talked about just this topic. He gave an example of how much power would be needed if only one million EVs were to “tank up” in the evening after work. The power grid would never be able to handle the demand and might even collapse. That’s in Germany, mind you.
It depends on where you live. Obviously, if they’re burning coal to recharge your car, that’s not good for the environment. But all my electricity is “green”.
Plus, most of the places where the rare metals come from are NOT democracies.
Cobalt is from the Congo (russia)
Copper is from south America, China and….the Congo (russia)
Nickel is from Indonesia (russia)
Manganese is from S. Africa (russia)
Aluminum is from China (russia)
I’ve read that it is still more environmentally friendly than fossil fuels. I haven’t dug into it myself. (No pun intended. 🙂 )
Plus, the EV batteries can be recycled; the gasoline you burn is gone and only pollutants remain.
“Elon Musk just lost $28 billion as Tesla took a beating. Now Toyota says ‘people are waking up to reality’ that EV adoption will be an uphill battle”
That’s not necessarily the conclusion to draw. Another possible conclusion is that it’s not smart to act like a major right-wing asshole when the majority of your customers are liberals.
I wanted to add that idea to my post, but this would mean that lots of people are refusing to buy his overpriced, goof-looking cars based on morals. Is this really so?
It’s hard to say what drives each individual’s purchasing decision. I’ve read things that suggests it’s true.
There’s also a lot more competition in the EV space now, so people have more of a choice. I know that if I were buying a new EV, I wouldn’t want to support Musk.