Four Traditional Automakers Bet on Electric Vehicles, Burning $70 Billion

IT Home reports on March 14th, since the beginning of this year, the changes in the US electric vehicle market have caught traditional car manufacturers off guard. The shift in policy environment and cooling demand have forced many car manufacturers to reassess their originally core electrification strategies.

Becoming the automaker whose latest adjustment direction involves shifting production of three pure electric vehicle models originally planned for the U.S.All will be canceled.The reason is the weakening demand for electric vehicles in the US and other markets.

Honda's decision andFord, General Motors, and StellantisRecent actions have been similar, with these car manufacturers also scaling back on electric vehicle projects.

The cost of this “strategic retreat” is naturally substantial. According to Auto News, a foreign media outlet, statistics released on March 12 local time show that the losses incurred by these four automakers alone in electric vehicle-related investments…About 70 billion US dollars (IT Home note: current exchange rate equivalent to approximately 483.602 billion Chinese yuan)And this figure does not even include other automakers like Porsche, which have also begun slowing down their electrification plans.

U.S. demand for electric vehicles has declined, closely related to changes in White House policies. The government has encouraged automakers to prioritize the development of gasoline-powered vehicles.Cancel the $7,500 federal electric vehicle tax credit, further weakening market momentum amid already slowing demand.

Electric vehicle registrations in the U.S. last DecemberDown by 48% year-on-year, to just 75,427 units, and its market share also dropped from 9.9% to 5.3%.

Ford has revealed that adjusting its electric vehicle strategy has cost the company about $2.1 billion. The company canceled a three-row electric SUV project and stopped producing the F-150 Lightning last year, as it failed to meet sales expectations.

Stellantis also expects its electric vehicle strategy adjustment to cost about 26 billion dollars, and the company has canceled multiple electric vehicle models. General Motors has paused production of the Chevrolet BrightDrop van in Canada, while converting a factory in Michigan, originally planned to produce electric vehicles, into a facility for producing gasoline-powered pickup trucks.

Auto News reported that Honda will record approximately 2.5 trillion yen (about 108.22 billion RMB at current exchange rates) in expenses and losses due to its strategic shift toward electric vehicles. Honda has not only canceled the 0 Saloon and 0 SUV models but also terminated the all-electric Acura RSX project.