Elon Musk, CEO of Tesla and proprietor of the digital platform X, recently faced a staggering $30 billion decline in his net worth. This came as Tesla, once the beacon of the electric vehicle (EV) industry, announced its weakest quarterly earnings per share in two years, a full 10% below already gloomy analyst predictions. This news sent shockwaves through the stock market, causing Tesla‘s shares to dive over 17%, erasing a colossal $138 billion from its market capitalization in just two trading days.
Former Toyota chairman, Akio Toyoda, has repeatedly voiced his skepticism about the feverish optimism that has surrounded the EV market. This skepticism was a significant factor in his decision to step down as CEO of the iconic Japanese automaker. Tesla‘s recent dismal earnings appear to validate Toyoda’s caution, prompting him to remark, “The bubble seems to be bursting.“
Toyoda has consistently posited that EVs are not the magic bullet to achieve automotive carbon neutrality, often saying, “There’s more than one path to the summit.” This sentiment seems to be gaining traction as prominent car manufacturers reassess their zealous EV plans. Lucid, for instance, has cut back its production by 30%, and GM has pushed the launch of its Chevy Silverado EV back by a year.
While U.S. President Joe Biden remains a staunch advocate for EVs as a means to combat climate change and reduce national carbon emissions, the EV market is showing clear signs of strain. Rising interest rates are curtailing consumer demand, as highlighted by Jessica Caldwell from Edmunds, who pointed out the increasing hesitancy of potential buyers.Although the EV market is still expanding, its growth rate has slowed down considerably.
A report from the Wall Street Journal indicates a mere 49% increase in EV sales in the first half of 2023, a significant drop from the 63% growth observed the previous year. People’s relationship with vehicles has remained largely unchanged for years. To expect a smooth and swift transition to EVs might have been overly ambitious.”
Toyoda’s foresight seems to be gaining validation. He has been a proponent of a more diversified strategy, underlining the significance of hybrids, hydrogen-powered vehicles, and other green alternatives.Ford too has shown restraint in going all-in on EVs, signaling this by slowing down the production of its F-150 Lightning pickup. Bill Ford, the lineage of the company’s founder, Henry Ford, has noted the increasingly polarized discussions surrounding EVs.
General Motors, after its bold promise to phase out gasoline and diesel vehicles by 2035, is also showing signs of reticence, attributing it to decreased EV demand and other external challenges.
