In 2021, Cadillac promised to be an all-electric brand by the end of the decade. In 2024, they dialed back that plan, as Cadillac chief John Roth told reporters in May that gas-powered and electric Cadillacs “will coexist for several years” after 2030.
After pledging to sell only electric vehicles by 2030, Volvo said this year it “has now decided to adjust its electrification ambitions due to changing market conditions and customer demands.” The brand now aims for 90% of its cars to be electric or plug-in hybrids by 2030.
Ford recently canceled plans for a three-row electric SUV and delayed a second planned electric pickup truck, leaving the F-150 Lightning as its sole electric truck for now.
Credit: SPECIAL
Credit: SPECIAL
Are these early warning signs that the long-planned transition to electric cars has failed? Are automakers canceling the electric future they promised?
No. The odds are still very good that EVs will eventually dominate new auto sales. The transition hasn’t been canceled. It’s more likely to be most visible after 2030.
EV sales are still growing
You may have seen headlines about an EV sales slowdown. The idea is a little misleading.
According to Cox Automotive, 7.6% of the cars Americans bought in 2023 were electric. Fast-forward to September, and a record 9% of the cars Americans bought were EVs. That figure could easily top 10% before year-end.
Credit: TNS
Credit: TNS
Since the start of the electric car transition, sales have never stopped growing. Their rate of growth has slowed, but that’s not unusual. Often, sales surge at first, as early adopters excitedly jump in, then slow as more skeptical shoppers must be convinced.
The end of the cycle is mass adoption. It takes several swings up and down to get there.
A recent report from the Alliance for Automotive Innovation, the industry’s largest trade group, illustrated it from the other side: “In 2016, ICE (internal combustion engine) vehicles comprised more than 97% of all vehicle sales. Through the second quarter of 2024, the year-to-date ICE share dropped to 78%.” Hybrids, plug-in hybrids and EVs are stealing market share from gas-powered cars.
Some automakers overshot for a reason
So why are Cadillac, Volvo and others slowing their EV roll? Put simply, they prepared early for high electric vehicle demand.
At the start of October, car dealers boasted 73 selling days’ worth of cars on their lots — close to what the industry traditionally aims for. They have 93 days’ worth of EVs.
Overbuilding early may have been a rational business decision. Smart automakers aim to master electric cars ahead of the curve, before most Americans want them.
To be ready for a day when the average buyer wants an EV, they need to push out electric models early. That lets designers learn what the market wants, dealers train their staff to sell and service them, and most importantly, automakers build a reputation for quality electric cars.
The companies also rushed to grab government assistance. Many Americans are familiar with the Inflation Reduction Act’s electric car tax credit of up to $7,500. Fewer know that the act set aside billions to help the auto industry build new factories and convert old ones to churn out electric cars and EV batteries.
The rebate funding didn’t have a cap, but the factory incentives were limited and first come, first served.
Projects like Ford’s massive Blue Oval City EV factory in Tennessee are being built, in part, with federal and state funding. They built early because government funding lowered the cost of acquiring something they will need when the time is right.
Automakers who wait to invest in EVs and the plants that make them will miss that funding. It makes financial sense to build the infrastructure for mass EV demand before it gets here and with government help rather than later and bearing the cost entirely on their own.
Everything points toward the early 2030s
Those more skeptical shoppers who need to be convinced? Most of them know they will be.
A recent Cox Automotive study asked car shoppers reluctant to buy an electric car when they might consider it. They had consistent answers.
Fifty-four percent of self-professed EV skeptics said they would consider buying one within five years, and 80% said they would within the next decade.
That fits the timeline of the auto industry and many government entities.
New federal tailpipe emissions rules passed in March would require most automakers to build a more-than-half-EV lineup by 2032. Stricter fuel economy standards passed in March take effect in the early 2030s as well.
With a new administration coming into the White House, those requirements could very well change. However, tough European standards won’t change, and many automakers today sell the same cars in the U.S. and Europe. Even if one country eases its rules, they design cars to meet the toughest rules and sell the same car worldwide.
Automakers plan their lineups with their eyes on a decade-long horizon, not a four-year timeline.
So the auto industry, government regulations and even car shoppers are all converging on the same rough timeline. Most new car sales could be electric in the early 2030s.
The average car on American roads won’t be electric for many years after that. There are more than 291 million cars registered in America today. We buy about 15 million new cars per year and don’t retire one for every new car we buy. So you’ll see gas-powered cars around you in traffic for decades to come.
Still, electric cars will likely displace more of them every year for the rest of your life.
Sean Tucker reports for Kelley Blue Book from Washington, D.C., where he has covered the auto and energy industries for a quarter-century.
The Steering Column is a weekly consumer auto column from Cox Automotive. Cox Automotive and The Atlanta Journal-Constitution are owned by parent company, Atlanta-based Cox Enterprises.
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