Social mood tends to ebb and flow. Sometimes it flows to the positive and other times it ebbs to the negative.
That’s especially true when it comes to the public’s hope for new technologies. Over the past decade, there has been what some might call a mania in electric vehicles.
Dozens of new EV manufacturers like Rivian and Lucid have popped up, and old manufacturers like Chevy and Ford have jumped on board, but there seems to be a shift happening, and we don’t just mean in the weather.
The bull market catapulted Tesla’s CEO Elon Musk into the EV forefront. The February 2023 Elliott Wave Financial Forecast noted that “Musk was viewed as a ‘genius innovator’.” The extreme optimism driving the EV mania enabled Tesla to become the most valuable automaker in the world, surpassing Toyota.
These developments aren’t a surprise as they are perfect reflections of the time. As Robert Prechter states, manias like this are “born of long-term bull markets.”
By July 2020, the Tesla euphoria had spawned copycat automakers hoping to cash in on the boom. And as the euphoria persisted, articles circulated with headlines like:
Why Electric Cars Will Take Over Sooner Than You Think
That same article stated that we had “already passed the tipping point” from which sales of electric vehicles would “very rapidly overwhelm petrol and diesel cars.”
But in March 2021, Elliott Wave Financial Forecast had a very different message. It warned that:
EV companies were in danger of failing and seeing their Shares end up as “decorations on the wall.”
And that’s exactly what some of the EV startups have achieved. Yes, electric vehicles are still selling but not as well as many predicted.
Edmunds analyst Joseph Yoon said he believed that “there was a miscalculation about demand and how much EVs would be coveted.” Even the EV darling Tesla is feeling the slide in demand.
Huge losses are being felt across the EV market. Economist Steve Moore said EVs may be the auto market’s “next big flop,” calling EVs a bad bet, comparing them to Ford’s Edsel from the 1950s.
As a result, automakers are tempering their EV ambitions and plans across the board.
- GM and Honda have dropped a $5 billion plan to build affordable EVs.
- Ford is delaying about $12 billion in EV spending.
- Tesla, Lucid, and Fisker are cutting prices on some of their EV models to entice buyers back in the market.
- Even Hertz plans to sell one-third of its U.S. EV fleet and reinvest in gas-powered cars.
Along with the rush to replace gas-powered vehicles with EVs, officials overlooked the need to provide the charging facilities that would be needed to power the projected number of electric vehicles.
One place where the charging infrastructure is lacking is New York City. A study examined the scale of public fast-charging needed to electrify some 20,000 EVs among the city’s yellow cab and for-hire segments, which are expected to be on the streets by 2026. The study determined that the city’s existing charging network is not adequate, even in the most optimistic scenario.
Even if EV owners have access to a public charging station, it may not work. The Wall Street Journal’s Joanna Stern visited more than 120 EV chargers in Los Angeles during a 48-hour period.
“Of the 126 stalls I inspected, 27% were out of order.”
She said that nearly 10% of the working stalls had payment issues, and some had “handshake” problems that prevented them from connecting to her car.
Furthermore, a study by Consumer Reports found that about one-half of EVs fall short of their driving ranges as estimated by the Environmental Protection Agency. Some EVs in the study were 50 miles short of their advertised range, which could be critical in areas where there are few public charging stations.
And cold weather in recent weeks created more bad publicity for electric vehicles as media reports told of EV owners who are dealing with dead batteries as a result of subzero temperatures. “EVs definitely lose some of their driving range in extreme cold,” said Scott Case, CEO of the battery research firm Recurrent, which found that “below-freezing temperatures reduced the driving range of up to 30% on 18 popular EV models.”
Every EV on the market is being battered by bad news. However, auto industry insiders are hopeful that new EV models will lead Americans to buy more electric vehicles in 2024. Among these new models are three-row SUVs, which are a top priority with families with young children.
But social mood, not new models, will determine if the pace of EV sales will increase this year. If social mood becomes mostly negative, Americans’ faith in EVs and other new technologies could be diminished. In the meantime, consumers could end up postponing any plans to buy any vehicle, especially one powered by an electric engine that they’ve never had experience with before.
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