December 3, 2024
The National Desk recently published an article featuring Justin Ren, Associate Professor of Operations and Technology Management, discussing how U.S. automakers are scaling back electric vehicle (EV) production plans due to disappointing sales and uncertainties around government incentives.
Despite subsidies like the Inflation Reduction Act, high production costs, especially for batteries, and lower-than-expected consumer demand have made EVs less profitable. Concerns about high prices, limited charging infrastructure, and range anxiety, compared to traditional gas-powered vehicles, have hindered broader adoption. Additionally, uncertainty surrounding the future of federal tax credits for EVs under a potential Trump administration adds to the market’s challenges.
“If you take a $7,500 incentive away, people’s purchasing intent is decreased, no doubt about it. But the nuance is which market segment will be affected more. Tesla consumers are not that price sensitive, but I think it would affect different manufacturers differently,” Ren adds.
U.S. automakers are adjusting their strategies to focus on optimizing battery technology to reduce costs and improve performance.
