State of EVs: Overall Demand Rises; Some Setbacks Occur

Progress rarely takes place in a straight line. Setbacks happen – like the old two steps forward, one step back.

In 2024, that was the case with electric vehicles. There is increased demand. EV deliveries continue to rise, Cox Automotive said in an October report.

Slowdown adjustments

But EV expansion is slowing, forcing the auto industry to adjust. Some examples:

GM now will rely on two joint venture plants in Ohio and Tennessee to supply the automaker’s factories that produce EVs.

What’s more, other challenges may occur on the political front.

One champion of EVs, President Joseph Biden, is departing office. He’s being replaced by President-elect Donald Trump, a major skeptic. Federal support for EVs, including a $7,500 tax credit, is in doubt under a second Trump administration.

Advancements continue

Still, executives in the industry expect EV advancement to continue.

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A Toyota Motor Corp. executive said in November investments in EVs and battery plants will go forward despite the change of administration.

“It’s really important to recognize investments can’t be undone in four years,” David Christ, group vice president and general manager of Toyota’s Toyota division, said at an Automotive Press Association event in Troy, Michigan.

Toyota's David Christ Credit: Toyota

“Once the direction is set, it’s moving,” Christ said. “That ball is moving downhill. There will be more BEVs.” BEV refers to battery-electric vehicles, typically known as EVs.

Toyota has announced EVs and plug-in hybrid models and is planning a battery production operation in North Carolina. That plant is scheduled to open in 2025 with 14 production lines to produce batteries for EVs and plug-in hybrid vehicles.

“That stuff is coming and we have to sell it,” Christ said of EVs and plug-in hybrids.

EV developmental challenges

Development of EVs faces issues. Among them:

Mass Production: Mass production drives down costs in manufacturing over time. As output expands, expenses are spread across more products. In the auto industry, expenses are spread across more vehicles and components.

In many cases, other than Tesla Inc., automakers are not yet benefiting from mass production.

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“Tesla has been a dominant (EV) player for a long time,” Stephanie Valdez Streaty, director of industry insights for Cox Automotive, said in an interview after the Battery Show in Detroit.

At other automakers, “There are still price premiums for EVs,” Streaty said. She added the shift to electrification may be not be smooth all the time. “It’s so complicated, it’s such a huge transformational change.”

Cox Automotive's Stephanie Valdez Streaty. Credit: Cox Automotive

Supply Chain: The supply chain for EVs and batteries needs to be better, said John Kem, president of American Fork, Utah-based American Battery Factory, Inc.

“On the manufacturing side all the key machining is made in China and nowhere else,” Kem said in an interview after the . “I’m confident that by ’27, ’28…most of the materials we need will be available in the United States.”

What happens until then?

“We don’t have enough players,” Kem said, referring to suppliers for the battery industry. “When can we have enough U.S. content?”

The executive said his company is confronting the dependability of suppliers. In some cases, “you never know if they’ll meet the timeline,” he said. “Will have enough to meet our needs?”

“In order to be competitive in scale manufacturing of LFP battery cells, or any cells of that matter, we need the best chemistries, high-end machining and process data analytics to optimize production,” Kem said in a later email.

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Software: EV development is contributing to demand for additional software for vehicles, an executive for French supplier Forvia said.

“There is more software required to drive the electric powertrain,” Jean Lorchat, director of software as a product for Nanterre, France-based Forvia, said in an interview. “That means the requirements for software are increasing.”