EV outlook: trend for greater electrification to continue in 2024, at slower pace
For electric vehicle (EV) makers, 2023 has been a double whammy of high inflation and high interest rates for car buyers, which has led big names like Tesla to cut prices.
IGTV financial analyst Angeline Ong says EV makers will likely need to shift down a gear in 2024, even though greater electrification is set to remain the status quo.
(AI Video Summary)
Electric vehicle maker setbacks in 2023
In 2023, makers of electric vehicles (EVs) had been dealing with some tough problems that are not good for the industry. Both high inflation and high interest rates for car buyers made it difficult for companies like Tesla to sell their cars. To make things better, Tesla had to lower their prices and make less money on each car they sell. This has affected Tesla's share price a little, but it has started to go up again. Another EV company called Lucid has also had some setbacks. They had to reduce the number of cars they plan to make from more than 10,000 to a maximum of 8,500. And it's not just Tesla and Lucid, lots of other EV and battery makers have had to change their plans too. The Chief Financial Officer of LG Energy Solutions, a battery maker from South Korea, says that the demand for EVs in 2024 might not be as high as they thought because of the uncertain economy.
Even big companies like Honda and General Motors are having problems. They were working together on a $5 billion project to make cheaper EVs, but now they have decided to stop working together after only one year. All of these challenges mean that the EV industry is going to face some hard times in 2024. But even though it's going to be tough, experts and banks still think that the use of electric vehicles will keep growing around the world, although it might not grow as fast because it costs a lot to borrow money.
Projections for 2024
But in 2024, instead of trying to sell as many cars as possible, the EV industry will focus on making enough cars to meet the demand that is there right now. This means that car makers will have to figure out how to deal with the problems in the economy and find ways to make cars that people really want. So even though things might be difficult for EV makers in the near future, the long-term future still looks good for the use of electric vehicles all over the world.
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