New Energy Weekly – The Death of the EV is Overstated
If you just read the headlines, you don’t get the actual story.
Reuters just published an article with the headline:
“More alarm bells sound on slowing demand for electric vehicles.”
But the data doesn’t show slowing demand for electric vehicles. It quotes Lee Chang-sil, chief financial officer at LG Energy Solution,
“EV demand next year could be lower than expectations.”
And the article points to the end of a partnership between Honda and General Motors (GM) to co-develop EVs. The $5 billion deal lasted a year. And GM’s sales aren’t great. The company delayed its electric Silverado truck for another year.
But one breakup doesn’t spell slowing demand for electric vehicles. Tesla sales grew 30 percent last year. And British Petroleum (BP) announced a $1 billion in charging stations across the U.S. by 2030.
BP signed a $100 million’ worth of Tesla’s ultra-fast chargers for rollout in the U.S. in 2024. BP said the Tesla chargers will be rolled out at Travel Centers of America and Amoco. They will also partner with Hertz to roll out the chargers at third party locations.
The EV rollout in the U.S. was always going to be hampered by the lack of charging infrastructure. And big investments continue to move into the EV space, as we can see. At the same time, the cost of EVs is coming down.
Right now, we are seeing prices come down. For example, Tesla lowered the price of its Model 3 rear-wheel drive model from $40,240 to $38,990 according to Barrons. The company also lowered its Model Y long-range from $50,490 to $48,490.
My speculation is that the lower price is more of a response to higher interest rates than a lack of interest in EVs. Loans for new cars spiked from 4.0% to as much as 7.5% for a new car.
I suspect the high interest rates will be headwinds for all sorts of large purchases going forward. But the amount of investment for growth in the EV sector tells me that this is a sector that will be around for the long term.
For the good,
The Mangrove Investor Team