Sales of electric vehicles are falling around the world, leaving automakers in shock. That’s why

Electric vehicles (EVs) have long been promised as the inevitable future of mobility. Automakers around the world have been forced to adopt the “work or perish” mantra, leading most of them to invest billions of dollars in developing battery technology and/or new battery-powered models. But if once the demand for such cars grew rapidly, then this time may well pass. Demand for electric vehicles (and sales) has been growing at a much more moderate pace in recent months, and while alarm bells have yet to ring, the panic button is being kept close at hand.

Take Ford Motor Company for example. The F-150 Lightning is one of the best-selling models in the United States. But the company is now planning a seven-week closure of its Michigan facility where it makes electric trucks. Why? Well, the demand for the model is not what it used to be. “We continue to adjust production to optimally balance sales growth and profitability,” the US company said in a recent statement.

(Also read: Ford cuts 2024 profit forecast, shares fall)

Even Tesla, the world’s largest electric vehicle maker, is facing a problem: Its Model 3 and Model Y cars don’t perform as well as they did in the past. Globally, Tesla sales rose 6.4 percent in the third quarter of this year, but analysts largely say that’s due to the new Cybertruck making up for the weak results of its smaller siblings. Tesla also faces enormous criticism from competitors, especially those like the Chinese company. BYD, which expanded aggressively.

On the other side of the Atlantic, local automakers in Europe are also having to fend off an invasion by Chinese electric brands. Despite the European Union (EU) imposing higher tariffs on Chinese-made electric vehicles, the threat from these electric vehicles remains the same. But overall, electric vehicles don’t seem to be doing as well as they have in the past. Volkswagen is plant shutdown planning in Germany and Mercedes-Benz reports third-quarter profits fell by 50 percent.

What could hurt EV sales around the world?

According to a report by Goldman Sachs Research analyst Kota Yuzawa, there are numerous factors at work that are creating challenges for the electric vehicle sector worldwide. While some of these are local factors (such as uncertainty surrounding the US presidential election), others include increased demand for used EVs which has impacted sales of new EVs, the slow pace of construction of fast charging stations and the inability of any manufacturer to offer a real value proposition .

Here in India, due to the absence of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, EV sales have been declining for four consecutive months, although sales of electric two-wheelers remain strong. Maruti Suzuki, the country’s largest automaker, plans to launch its first electric vehicle in the market by early 2025, while companies like Hyundai and Mahindra are also determined to expand their EV portfolio. The electric Hyundai Creta is also ready to debut in 2025. But can companies like Maruti Suzuki, Hyundai and Mahindra play the volume game?