Detroit 3 pull back on EV production to cope with market realities

EV market competition is heating up, especially abroad in countries like China where domestic makers are gaining tremendous ground and taking share away from legacy auto manufacturers.  But in the U.S. it’s a different story. Waning demand growth for EVs is causing the Detroit 3 (Ford, GM, and Stellantis) to rethink their production plans and adjust future targets.

Why it matters: The three automakers say they're committed to electrification, but in reality, they want to make profits, and the easiest way to do that is build products customers want to buy. Quarter-over-quarter EV sales improvement in Q2 does not necessarily equal profit for automakers.

Worth noting: Ford lost $1.1 billion on its Model e electric vehicle division in Q2, while on the flip side, the automaker’s Pro Division (responsible for the Super Duty trucks and other utility vehicles) gained $2.6 billion. 

Driving the news: Automakers are following the money and making production pivots or updating their targets as the early EV adopter phase reaches its end.

Ford announced that it's investing $3 billion to boost output of the Super Duty, at the company’s Oakville, Ontario plant.

• A three-row EV SUV was originally scheduled to start there but has since been shelved until 2027. 

• This solves two problems for Ford: it's now able to meet the growing demand for larger trucks and delays potential losses from an SUV that the market isn’t craving.

GM has backtracked on its 1 million EV production capacity forecast for 2025. 

• Just because the market's not developing, but it will get there. And so we're going to be guided by the customer," CEO Mary Barra said earlier this month. 

• Last week, GM announced it would be delaying a second U.S. EV truck plant and the Buick brand’s first EV model.

Stellantis, which is home to Dodge, Chrysler, Jeep, Ram, Fiat, and other brands, has been staunchly in favor of an EV future. But behind the scenes, plans are in the works to bolster gas-power and hybrid products. 

• “We’re committed very much to the EV market, but, on the other hand, we have the flexibility to go and grow where the consumer demand is,” said CFO Natalie Knight. 

• Although Stellantis hasn’t backed off its long-term targets, an EV majority lineup could be a hard sell. That’s why, If consumers want a gas-powered version of an EV, Stellantis is open to building it.

Bottom line: EV strategies may change even more meaningfully in the months ahead, especially with an impending election on the horizon. Yet, some analysts believe an EV-dominant market is more of a “when” rather than an “if,” In the meantime, automakers are tasked with balancing their production capacities to avoid having too many EVs too soon.

Become an automotive insider in just 5 minutes.

Get the weekly email that delivers transparent insights into the car market.

Join 73,000 others now, it's free:

The Auto Hauler Exchange has revolutionized the way vehicle haulers and vehicle shippers collaborate. AHX's B2B marketplace connects vehicle haulers directly to shippers in a frictionless manner.

The Exchange helps vehicle haulers maximize their capacity while limiting empty miles. The Exchange is the first true B2B marketplace of its kind in the vehicle logistics industry.

By connecting carriers and shippers directly, carriers can save time and choose which opportunities fit their needs each day.

At the same time, shippers can rest assured that their vehicles are being moved by qualified, vetted carriers who fit their vetting program.

The Auto Hauler Exchange has democratized the vehicle logistics industry by eliminating the middleman and connecting shippers directly to available carriers.

Get off the vehicle hauling roller coaster today with Auto Hauler Exchange.