Honda, Toyota express skepticism about EVs amid industry downturn


Automotive giants are expressing their skepticism regarding the electric vehicle (EV) industry as the market grapples with stalled adoption and stunted growth.

Ambitious project falls through: Honda and GM's highly anticipated joint effort to produce budget-friendly EVs was canceled on Wednesday, a year after it was announced, according to Reuters. The ambitious project aimed to leverage GM's Ultium battery technology for the creation of affordable EVs and was set for release in 2027.

In an interview with Bloomberg, Honda CEO Toshihiro Mibe shared that the $5 billion initiative “would be difficult as a business,” signaling that the plan would be too expensive to execute. The sentiment was reiterated in a joint statement by Honda and GM released on Thursday that noted that the decision came after “extensive studies and analysis.”

Signs of the times: The development comes amid news of Tesla posting its lowest quarterly earnings per share (EPS) in two years, even 10% lower than the negative forecasts from analysts, reported Fortune. Tesla’s disappointing third-quarter earnings led to the company’s shares swiftly plummeting over 17% and market capitalization diving by $138 billion after just two days.

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Toyota chairman's view: When asked about the recent drop in demand in the U.S. during a Tokyo car event, Toyota Chairman Akio Toyoda shared that the industry should not solely rely on EVs to achieve environmental sustainability, reported The Wall Street Journal.

“People are finally seeing reality," said Toyoda, a longtime outspoken skeptic of EVs. “There are many ways to climb the mountain that is achieving carbon neutrality.

Challenges for the EV market: EV sales in the U.S., while still on the rise, have experienced a slowdown. Experts note how high interest rates are dampening consumer demand, preventing broader adoption. In the first half of 2023, EV sales increased by 49%, a marked decrease from the 63% growth observed in the previous year. The transition to electric vehicles involves significant technological and behavioral changes, contributing to the challenges faced by the industry.

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Honda, Toyota express skepticism about EVs amid industry downturn