According to industry sources and foreign reports on Oct. 29, global automaker Ford Motor is set to reduce its initial US$12 billion investment plan for electric vehicle projects after recording approximately US$1.3 billion in losses in its electric vehicle division during the third quarter of this year. As a result of this decision, the operation of the Kentucky 2 plant in collaboration with SK on is expected to be delayed.
Ford and SK on’s battery joint venture, BlueOval SK, will proceed as scheduled for the Tennessee factory and Kentucky Plant 1 with production set to begin in 2025. However, the operational timeline for Kentucky Plant 2, which was originally targeted for 2026, has been delayed. Ford emphasized in its financial report that the declining demand for electric vehicles is due to U.S. electric car buyers’ reluctance to pay a premium for electric cars compared to gas or hybrid vehicles, leading to a sharp drop in electric vehicle prices and profitability.
GM also abandoned its electric vehicle production guidance during the third-quarter performance announcement. Due to the waning demand for electric vehicles in the North American market, GM has reverted to its original plan to produce 400,000 electric vehicles over a two-year period until mid-next year. Additionally, GM has decided to postpone the start of operations for the electric truck production plant it had planned to build in Michigan by one year.
Tesla has also raised concerns about the possibility of weak demand for electric vehicles. Elon Musk, the CEO of Tesla, mentioned during a conference call that “global economic conditions, due to rising interest rates, could potentially dampen consumer demand, leading to a delay in the construction schedule of the Mexican production facility.”
As global automakers adjust their electric vehicle investment pace in this manner, the domestic battery industry is also closely monitoring the situation. If the global economic slowdown and high-interest rate environment persist into next year, it is inevitable that the electric vehicle’s core component, batteries, will be adversely affected as consumer sentiment for electric car purchases weakens.
However, the battery industry maintains that there is no change in the long-term and medium-term growth trend for electric vehicle demand. With governments worldwide continuing to promote environmentally friendly policies and major automakers showing a strong commitment to long-term electrification initiatives, there is little doubt that the battery market will continue to grow.