The signal of weak demand for electric vehicles has once again been conveyed from Musk's mouth.
Yesterday, Tesla released a disappointing third-quarter report, and under the influence of multiple factors such as rising interest rates and economic slowdown, Tesla has slowed down its production capacity ramp-up targets and speed for the German and Austin factories.
At the same time, Musk stated that the company will continue to reduce production costs to improve profitability. It may be wise to postpone the construction of the expensive Mexican factory. Meanwhile, Musk believes that although a price reduction strategy was implemented in the third quarter, high interest rates greatly offset the stimulus of price reductions for consumers who buy cars with loans.
It's not just Tesla, weak demand seems to be the trend in the industry, and electric vehicle giants are all choosing to slow down production. General Motors announced on Tuesday that it will delay the production of a flagship model at a Michigan factory by one year, citing a slowdown in demand for electric vehicles.
Ford announced last week that it will temporarily slow down the production capacity of the electric F-150 Lightning pickup truck. Data shows that Ford's iconic F-150 Lightning electric pickup truck saw a sharp YoY decline of 46% in sales in the third quarter, with only 3,503 electric pickup trucks sold. In July, Ford slowed down the expansion of electric vehicles and shifted focus to commercial vehicles and hybrid cars.
Luxury electric car manufacturer Lucid released a report on Tuesday stating that despite price promotions, production in the third quarter dropped by nearly 30%, and deliveries only saw a slight increase, raising concerns about the demand for luxury electric vehicles in the market.
Tom Narayan, a global automotive analyst at Royal Bank of Canada Capital Markets, believes that the situation of demand slowdown will improve with the decrease in the price of electric vehicles and the emergence of low-cost models:
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&#34;This does highlight that electric vehicle (demand) may slow down in the short term. But it is more related to pricing and affordability, rather than the market rejecting electric vehicles.&#34;
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Have electric vehicle manufacturers' bets failed?
Under the wave of global automotive electrification transformation, many automakers have invested billions of dollars in building factories and battery plants, but the current sales performance of electric vehicles in the United States clearly does not reflect a strong demand trend.
The latest data from research firm Motor Intelligence shows that the growth rate of electric vehicle sales in the United States in the first half of the year has dropped from 71% in the same period last year to 50%, which is also behind the 65% growth rate for the entire year of 2022.
Data from industry service company Cox Automotive also shows that the inventory of electric vehicles at US dealerships has reached a record high. As of the end of June, the number of electric vehicles in dealerships or en route to stores was about 90,000, four times higher than the same period last year.
Some electric vehicle startups have also felt the pressure of sales growth falling below expectations. Companies like Rivian and Lucid have found that despite the relatively small number of vehicles produced by their factories, there are still unsold inventory.
Some dealers and executives have expressed that the first wave of buyers willing to pay a premium for electric vehicles has already been exhausted, and manufacturers are now facing a more hesitant consumer group.

TSLA

Due to the sluggish demand for electric vehicles, Tesla, General Motors, and Ford have all slowed down the ramp-up of their electric vehicle production capacity.

US consumers unwilling to pay the bill, electric vehicle giants have to slow down production.