EV makers shift gears to lower prices, hybrids as consumer appetite slackens

financialpost.com:

The volatility of theelectric-vehicle transition has been on full display recently, as Ford Motor Co. announced it is pausing construction on the joint-venture active cathode material plant it is building in Quebec just days after Honda Motor Co. Ltd. announced a $15-billion EV and battery complex in Ontario.

On the one hand, the multibillion-dollar investments demonstrate that automakers continue to see EVs as the future of the industry, but construction pauses show questions about their viability remain.

EV sales grew by 49 per cent in Canada in 2023, grabbing 10.8 per cent of the total marketplace, and yet industry leaders are also talking about the challenges of moving out of the early adoption stage, which includes pressure to bring costs down and increase performance.

“It’s clear that when the EV craze started … the early adopters … were willing to pay a higher price,” John Lawler, chief financial officer of Ford, said on an earnings call on April 24. “What we’re finding (now) … is that … customers are not willing to pay a premium.”

Such evaluations of the marketplace link up with what some consumer sentiment surveys are showing.

The percentage of consumers who said they would consider an EV for their next purchase has declined to 46 per cent, compared to 56 per cent in 2023 and 68 per cent in 2022, according to a survey conducted in March byAutotrader.ca, an online marketplace for new and used cars.

Consumers who said they would not consider an EV cited affordability, range anxiety and a lack of charging infrastructure as their top three reasons.

“Consumers are financially squeezed,” Baris Akyurek, vice-president of insights and intelligence at Autotrader.ca, said. “It makes sense that they’re concerned about