At the start of each year at Forbes, I write a piece in which I make a set of predictions about what will happen in the energy space during the coming 12 months. This year’s piece was headlined, “9 Consequential Energy Predictions For 2024.”
One prediction I made in that piece focused on the likelihood of a big fallout in America’s EV manufacturing industry.
Here’s part of what I wrote:
Non-Tesla automakers will be pressured by investors to scale back EV plans further.
There is no question that consumer demand remains strong for Elon Musk’s Tesla, as evidenced by the company’s strong 2023 results. The question is whether there is enough demand to sustain any other electric vehicle maker in the United States until it can reach real profitability. See Rivian and Fisker as examples, along with the big losses sustained by the EV divisions at Ford and GM that led both companies to scale back major EV investment commitments during the 4th quarter of 2023.
[End]
In an episode of the Energy Realities Podcast that same week, I predicted that every pure play EV company operating in the US would either be in bankruptcy or on the brink of it by the end of 2024.
Here’s what happened on Monday:
“Fisker Files for Bankruptcy Protection,” reports ABC News, the second pure play EV maker in the US to do so.
Oh.
A third pure play EV maker, the aforementioned Rivian, “paused” operations earlier this year, no doubt in preparation for a bankruptcy filing of its own.
Oh.
Here’s an excerpt from the ABC story for your reading pleasure:
Electric vehicles grew only 3.3% to nearly 270,000 during the first three months of this year, far below the 47% growth that fueled record sales and a 7.6% market share last year, according to J.D. Power. The slowdown, led by Tesla, confirms automakers’ fears that they moved too quickly to pursue EV buyers. The EV share of total U.S. sales fell to 7.15% in the first quarter.
That has led to huge price cuts and job cuts at leading companies like Tesla.
Another electric startup, Rivian, said this year that it was pausing construction of its $5 billion manufacturing plant in Georgia to speed production and save money.
Lordstown sought bankruptcy protection last summer, as it dealt with funding difficulties.
The Fisker bankruptcy filing comes as the Biden administration pushes to dramatically raise EV sales as part of President Joe Biden’s agenda to slow climate change. Republicans led by presumptive nominee Donald Trump are turning EVs into a campaign issue, deriding Biden’s efforts to promote electric vehicles as a “radical plan” that is unfair for consumers and amounts to government overreach.
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This is the second pure play EV company Heinrick Fisker has deftly managed into ultimate bankruptcy. Though we can be certain he personally became fabulously wealthy in the process, because of course he did.
Note also that Tesla is having major struggles of its own as the pace of EV adaption growth slows to a snail’s pace. But its decade-long headstart on the competition and diversification into other ventures give it advantages these other pure play EV companies do not and cannot enjoy.
Traditional automakers like Ford and GM have been able to placate investors about their stunning losses in EV ventures by offsetting them with major profits from their traditional gas and diesel-powered car divisions. But even those companies have made an array of strategic shifts in the past six months in which they’ve delayed or cancelled planned new investments in their EV dreams.
What we are seeing here is a gradual shift back to reality in the US auto industry. EVs always have been, are today, and will remain a niche product that can fill specific needs for a limited segment of our population. Everyone else will continue buying and driving internal combustion cars because that is what the real market demands.
That is all.
I seems to me the EV market has reached the saturation point. The people living in the real world of having to do things to stay alive, the people who reject looking for a green halo to impress their woke friends, know the difference between a useful method of transportation and a virtue-signalling ornament.
No surprise here.
More to come.
And the leftists continue to beat the EV drum.
Is there any doubt that the leftists are trying to destroy everything - including us!