Volkswagen Cuts EV Output at German Sites as Demand Craters
This article from Bloomberg may be of interest to subscribers. Here is a section:
The appetite for EVs in Europe has been held back in recent months by higher energy, living and borrowing costs, as well as lingering consumer concerns about charging infrastructure and battery range. The German government’s decision to end subsidies for electric cars in company fleets this month led to a 171% increase in new EV registrations in August compared to the previous year, according to Germany’s VDA auto lobby.
Against that backdrop, Germany has led a months-long crusade to extend the use of internal combustion engines under the European Union’s climate plans through the use of so-called e-fuels.
Running an economy on ideology is not best practice. I have to admit I never thought I would have to point that out. Governments pushing technology that would not survive on its own is not the best use of capital but can be justified if it going to meet a critical social need in future. The wrinkle in that way of thinking is how long do you have to keep supporting it before you admit it is not working. Apparently, we have not reached that point yet.
Consumers are not stupid. They know advertised ranges pay no heed to heating or cooling needs while driving. They also worry about access to charging infrastructure when away from home. Most of the initial wave of buyers were both homeowners and had enough cash to pay the EV premium. Providing for the rest of the population who rent their accommodation but own their vehicles is a major undertaking.
The EU is also becoming progressively more protectionist. The efforts to curtail Chinese exports of EVs while also bending rules to protect German jobs is not exactly in line with the progressive nature of legislation.
It’s also a lot easier to curtail soybean imports from Brazil over fears of deforestation than to address the impact of lithium mining on the natural environment.
Volkswagen is attempting to steady in the region of the lower side of the seven-year range.
Toyota has sidestepped much of the misallocation of capital issues the wider automotive sector has engaged in. However, it is still at risk from falling demand.
The share has accelerated higher over the last several months. The downward dynamics of the last two weeks suggest a peak of medium-term significance.