Automakers Slash More Than 4 Million EVs From 2030 Sales Targets As Adoption Slows
Good morning! It’s Friday, September 27, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
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1st Gear: Automakers Now Aim To Sell 23.7 million EVs By 2030
You have to admire the conviction of the world’s automakers. Before many had even unveiled their first electric cars, they were promising lofty sales targets and a full pivot to electrification over the coming decade. However, the realities have been much harsher and a slow uptick in electric vehicle adoption has forced many to rethink their strategies. Now, the true hit that those ambitious EV targets have taken has become clear.
Automakers around the world had pledged to sell more than 27 million electric vehicles by 2030, but those figures have slowly been backtracked in recent months. Now, a new report from Inside EVs has revealed just how much those targets have been cut by, as the site explains:
A new report from the clean-energy research firm BloombergNEF explores—in real terms, not just vibes—how the auto industry’s cooling stance on EVs may impact the number of electric cars produced by the end of the decade.
BNEF estimates that the 14 automakers who had made EV goals for 2030 will now produce a combined 23.7 million electric cars that year. That’s down from the 27 million they would’ve sold had they stuck to their targets as of late 2023.
“While each automaker sets targets individually, they can collectively transform the global auto market if successfully implemented,” BNEF analysts said in the report. “Likewise, collective reductions and scaling back spells trouble for the EV market in the years ahead.”
It’s important to note, though, that EV sales globally and in the U.S. are still trending upward, and industry watchers expect long-term growth. Also, a lot of the slowing growth is a Tesla-specific issue. But the trend is leading to more automaker reluctance than many observers expected.
Automakers like Ford and GM previously backtracked on plans to expand production of popular electric models in favor of diversifying their power options, which basically means adding more hybrids to their ranges.
While for companies like VW, the slowdown in EV adoption has meant canceling some models that were destined for these shores, like the ID7 eclectic sedan, which will now only be sold overseas in territories like Europe.
2nd Gear: Toyota Distances Itself From LGBTQ+ Support
Japanese automaker Toyota faced a barrage of abuse online this week for its sponsorship of LGBTQ+ initiatives. However, instead of standing firm and pledging its support for those communities, the automaker has instead attempted to distance itself from LGBTQ+ schemes it’s tied to.
The Camry maker was attacked online weirdo Robby Starbuck, who harrassed the company for offering “preferential treatment for diverse suppliers,” reports Automotive News. Toyota responded by arguing that the activities were, in fact, led by employee groups and were not run by the company itself, as the site explains:
“Not every activity is sanctioned by the company, and we have over 14 affinities and 116 chapters and over 8,000 members in our ERGs,” a company spokesman said in a statement. The campaign from Starbuck hasn’t prompted a review of policies for these employee groups but the company periodically evaluates its strategic investments, the spokesman added.
Tetsuo Ogawa, president and CEO of Toyota North America, is quoted on the company website as saying “supplier diversity is a critical part of economic inclusion and development for the communities where we live and work.” But the spokesman said that doesn’t extend to setting specific quotas for underrepresented groups.
Toyota is among a handful of companies Starbuck has targeted in recent months, urging customers to boycott the brands for their “woke” policies. Harley-Davidson Inc., Lowe’s Cos. and Ford Motor Co. said they would curb their DEI efforts, including scaling back programs directed at LGBTQ groups.
As you’d expect, the Japanese automaker has faced criticism for its stance, with LGBTQ+ advocates warning that backtracking on DEI initiatives “will have a lasting, negative impact on business success.”
3rd Gear: Stellantis To Cut Inventory By 100,000 Cars By 2025
Jeep owner Stellantis has not been having a great 2024, so far the automaker has reported flailing sales, dwindling profits and is even facing a revolt at its dealers. Now, it turns out the automaker has way too much stock on hand and it’s hoping to change that ahead of the new year.
The Fiat and Chrysler owner is planning to reduce its stock of new cars by roughly 100,000 vehicles by the start of 2025, reports the Detroit Free Press. The cut in inventory will require sharp price cuts and dealer incentives in order to ship some models, as the Free Press reports:
[Chief Financial Officer Natalie] Knight told analyst Michael Jacks that the automaker, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, had made a lot of progress in Europe and has begun to move to a better spot in the United States. The company had more than 430,000 vehicles on hand in the United States at the midway point of the year, she said.
“I think we’re off to a solid start. We’ve taken it down by 40,000 in the months of July and August. We’re going to continue to see reductions in September and throughout the year,” she said.
Knight’s comments came as the automaker has been buffeted by a series of challenges related to sales and profit declines and open criticism from key stakeholders, including its U.S. dealers and the UAW. The dealers, in a letter to CEO Carlos Tavares this month, said they’d been warning executives for more than two years that the direction that Tavares had set for the company, which they described as “reckless short-term decision-making” to secure record profits, would be disastrous.
In order to meet the reduction in inventory that Stellantis requires, Knight siad that production would be cut by more than 100,000 vehicles in Q3 2024. They added that decisions had been made to cut prices and offer more “consumer-facing activities” to try and clear stock at some dealers.
During her remarks, Knight admitted that Stellantis has faced difficulties over the summer, with July being “a very poor month” for the automaker. However, they were optimistic about the future for the Jeep owner, adding that there were “definitely” improvements last month but added that Stellanties isn’t “out of the woods” just yet.
4th Gear: Toyota Output Falls For Seventh Month In A Row
Toyota has also seen its production drop in recent months. In fact, the Tacoma maker has cut its output for seven consecutive months as it deals with production stoppages and emission scandals.
According to a report from Reuters, the Camry maker saw its output drop by more than 10 percent last month. The drop in production continues a worrying trend for the automaker, which is the world’s largest producer of cars as it stands. As Reuters explains:
Toyota Motor’s global production fell 11% in August, declining for a seventh straight month, dragged lower by a typhoon and a certification scandal in Japan and a pause in output for two sport utility vehicles in the United States.
Output for August slumped to 709,571 vehicles with production in its home market tumbling 22%.
The drop in production at Toyota follows the news that three of its cars made it onto a list of the biggest sales drops so far this year. In 2024, the Highlander, Tacoma and Mirai have all seen significant drops in demand, and that’s without these models getting caught up in an emission scandal that’s sweeping Toyota right now.
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