The electric vehicle (EV) market, once a beacon of promise for a sustainable future, is currently facing a slowdown. This has led major automakers such as Tesla, General Motors (GM), and Ford to rethink their investments in the EV sector.

EV Market Growth Slows Down

While the battery-powered vehicle market continues to expand, the pace of growth has slowed considerably. Tesla, the world’s EV leader, and legacy automakers that had been spending at breakneck speeds to build their electric car businesses, are now taking a more cautious approach to investments.

The government’s push for emissions regulations and mileage regulations has been a significant driver for the shift towards EVs. However, the recent slowdown in demand has led to a delay in achieving these targets. This setback not only affects the automakers but also poses challenges for climate change agendas, which rely heavily on promoting zero-emission vehicles.

Factors Affecting EV Demand

One of the reasons for the slowdown in EV sales is the unfamiliarity of consumers with the product. Automakers initially touted EVs as electric variants of traditional combustion vehicles, which did themselves a disservice. EVs are less complex to build, more technically advanced, and require far less maintenance than their gasoline- and diesel-powered equivalents. However, consumers don’t understand the nuances between the two powertrains, especially because the added initial cost of an EV pays for itself with a much longer (and less expensive) service life.

Another concern that consumers have is the limited range of EVs. Despite the fact that nearly all of today’s EVs will provide approximately 250 miles on a full charge, with some offering nearly double, consumers still mention range as one of their primary concerns about EVs.

The limited charging network is another factor contributing to the slowdown in EV sales. Every city and town in the United States has at least one gas station, and fuel stops may be found at nearly every offramp on highways and interstates. However, the same cannot be said for EV charging stations.

Rising interest rates have made car loans more expensive, stifling consumers’ green appetites, and politics are complicating things even further. Electric vehicles have become a divisive “political football”. In the US, Democrats tend to prioritize environmental friendliness in car-buying, while Republicans do not.

On Aug. 29, American Honda Motor Company and South Korean battery maker LG Energy Solution Ltd. announced that they have gotten together on a plan to build a factory to produce lithium-ion batteries for Honda and Acura electric vehicles. The factory is projected to cost $4.4 billion. Construction is slated to begin early next year, and the plant is projected to start producing batteries by the end of 2025, with a proposed manufacturing goal of 700,000 batteries producing a total output capacity of 40 gigawatt-hours annually. Whatever state is chosen for the plant’s location, Honda Motors officials assert that the plant will benefit Honda plants throughout the country.

EV Honda Products

Honda has recently been behind some of its competitors in producing electric vehicles, although it offers hybrid CR-Vs and Accords. The company plans to unveil a fully electric SUV named Prologue, in development with General Motors, in the near future. Batteries produced at the new plant would be used in Honda and Acura EV offerings. This factory is part of a plan to achieve carbon neutrality for Honda with a goal set for 2050. Honda had already announced a target of 30 EV models worldwide with a production goal of two million Evs annually by 2030.

New Ohio Honda Plant

Plans for the plant’s location have not been finalized, but one of the considered sites is Ohio, which already hosts Honda’s main U.S. factory. Ohio Gov. Mike DeWine said in a statement that Ohio is working with Honda and LG on the matter. He expressed hope that the factory would be located in his state. Honda Motor Co. currently employs 15,000 people in the state including an Anna engine plant, an assembly plant in Marysville, and a new Transportation Research Center outside Marysville containing one of the most advanced wind tunnels in the world.

GM Working with LG Too

This follows an announcement last month by the U.S. Department of Energy that a conditional loan of $2.5 billion has been approved for General Motors to also pair with LG Energy Solution in aiding their joint venture, Ultium Cells, to build three lithium-ion battery factories in the U.S. The plants will support GM’s goal of producing a million Evs annually by 2025. These factories are planned for Michigan, Tennessee and Ohio. Ford Motor Co. has teamed with SK Innovation to also produce batteries in Kentucky. Other companies, including Toyota, Volkswagen and Stellantis also plan battery plants in the U.S.

With the virus pandemic of the coronavirus significantly impacting the country, a considerable strain is being placed on the United States healthcare system. Hospitals are starting to realize that they were severely under-prepared for a massive virus outbreak like the coronavirus. To help stop the growing shortage of medical supplies, major brands of all industries are mass producing these products in their facilities.

One of the most heavily impacted cities is New York City. As the number of confirmed cases of the coronavirus have risen, a growing number of hospitals can not keep up with the demand for the ventilator systems. Without ventilators, a respiratory virus like the coronavirus could lead to extreme trouble breathing or even death. On March 22nd, New York City Mayor Bill de Blasio stated: "if we don't get more ventilators in the next 10-days, people will die who don't have to die."

GM, Ford, and Tesla Made Ventilators

To meet the demand of the needed ventilators, large automotive manufacturers are stepping up to the plate to increase production speeds. To help lessen the shortage of ventilator systems, major automotive manufacturers GM, Ford, and Tesla are partnering with medical device manufacturers to mass-produce ventilators to help supply the hospitals in need. More urgently, New York City is getting the bulk of these produced ventilators by the automotive manufacturers. Currently, New York City has around 6,000 ventilators on hand; New York City is projected to need nearly 30,000 to meet the demand of the pandemic.

Tesla

Tesla founder Elon Musk has become proactive in the fight against the coronavirus by recently supplying Los Angeles with 1,200+ ventilators to use for their struggling hospitals with a ventilator shortage. Elon Musk is also converting his Tesla Gigafactory in New York City into a ventilator production facility after pairing up with a medical device manufacturer to increase production speeds. Elon Musk has stated that the factory will start production "as fast as humanly possible." With the coronavirus quickly growing in confirmed cases, this is an urgent need for the impacted communities across the United States.

Trump Encourages Tesla, GM & Ford To Make Ventilators

General Motors has had a rough year with record numbers of recalls for ignition issues. And  now they are facing disgruntled investors ready for a proxy fight. To calm the anger of the investors, the company is going to buy back $5 billion in stock giving support to the stock.