What’s Causing the Oncoming All-Electric Vehicle (EV) Market Shock?

Rick Margin
8 min readDec 17, 2023

In the US, electric vehicle (EV) sales surged past 300,000 for the first time in the third quarter of 2023, a nearly 50% increase over last year as more automakers ramp up production. According to the US government-based Energy Information Administration (EIA),“hybrid, plug-in hybrid, and battery-electric vehicle (EV) sales in the United States have increased in recent years as sales have decreased for non-hybrid gasoline- or diesel-fueled vehicles. In the second quarter of 2023, hybrid, plug-in hybrid, and battery-electric vehicles (EV) collectively accounted for 16% of light-duty vehicle sales in the US”.

As sales of both partially and fully electricly-fueled vehicles are clearly roaring ahead, but there’s a more nuanced storyline unfolding. Sales of traditional hybrid electric vehicles (HEV), such as Toyota’s Prius, the first mass produced hybrid vehicle, are outpacing those of all EV’s in 2023, according to American on-line automotive resource, Edmunds. Hybrids accounted for 8.3% of U.S. car sales, about 1.2 million vehicles sold, through November of this year. Their share is up 2.8 percentage points compared with total sales last year. This chart was used in a January 2024 CNBC report illustrates the 4-year trend.

Let’s briefly review what’s trending with just a few of the major manufacturers. The chart below illustrates the best selling EV’s by model. It’s no surprise that Tesla is the top seller. Their Model Y is now the best selling EV worldwide. You’ll note many unfamiliar model names, all of which are Chinese. More on that subject shortly.

Source: CleanTechnica for unit sales through August 2023.

Ford Motors

They have been the most strategically galvanized US auto maker regarding EV’s and had announced their all-in future spending commitment 2 years ago. Meanwhile, they expect a full-year 2023 loss of $4.5 billion on their EV division which equates to a loss of roughly $36,000 per vehicle produced. The troubling trend here is that they’re getting no financial leverage from increased volume. This is an unsustainable result, requiring a strategic pivot.

Unprofitable all-electric vehicle sales in the US in November 2023 were up 43% placing Ford at distant №2 behind Tesla. However, comparatively very profitable hybrid vehicle sales rose 75%. Deliveries of traditional internal combustion engine vehicles totaled 84% of their total production.

As a result, they announced they’re cutting $12 billion in planned EV directed capital expenditures, including nearly halving the size of its future battery plant in Michigan and delaying the launch of production at a battery plant in Kentucky. Those pullbacks are in response to slower growth in EV sales than had been forecasted and an obvious shift in consumer sentiment favoring hybrids. Ford also just announced a 50% 2024 production cut for their much touted F-150 EV pick-up, the Lightning. “We’ll continue to match production with customer demand,” a Ford spokeswoman stated.

Author update: On 1/4/24, Ford reported their 4th quarter sales. Their hybrid unit sales increased by 55% and their all-electric sales were up 27%.

General Motors

GM reported EV sales are also growing in the US, but both the volume and the year-over-year growth rate are considered disappointing. In the 3rd quarter of 2023, the EV volume represents about 3% of GM’s total deliveries. As a result, they too have announced that they are scaling back future EV investment by close to $14 billion amid staggering losses. In 2023 they will lose more than Ford and project a 2024 loss of $20,000 per EV produced.

Author update: GM announced in January 2024 it would bring back hybrid technology on certain vehicles in North America, a move it had been resisting.


They have been the most conservative EV manufacture and are focused on their leadership in hybrid technology. They have expressed concerns about the current limitations of EV technology, including battery life, charging infrastructure, and the environmental impact of battery production and disposal. The company has a stated 2020 goal to produce 3.5 million electric vehicles by 2030, which would be roughly a third of their global sales. Total EV sales of their North America operations, which include, battery, hybrids, plug-ins and fuel cells make up nearly one-quarter of total sales volume. Through the 3rd quarter of 2023, they sold 37,609 EV’s in the US (about 2.3% of their total volume). For reference, in 2022, the group sold roughly 35,000 EV’s which represents 1.7% of its total volume. Sleepy results. By contrast, in the same year they produced 2.6 million hybrid vehicles, which represents roughly 30% of their total volume. They haven’t disclosed their profit or loss per EV produced, but they’re clearly making good money on hybrids.

Author update: On 1/3/24, Toyota reported 12/23 sales. They reported a 63% increase in electric hybrids. Announced an additional $2.5 billion investment, for a total of $3.8 billion, at the company’s North Carolina manufacturing plant to produce batteries for hybrids and electric vehicles.


Reuters reported in a October 2023 article that VW “joined a chorus of carmakers and analysts warning in recent days that demand for electric vehicles (EV) is not developing as expected.” Volkswagen CFO and COO Arno Antlitz explained on a media call that “EV orders in Europe are down to 150,000. That’s 50% lower than last year’s total of 300,000.” He also added, “We have not given up the topic of margin parity,” In “2025 and beyond we plan for margin parity,” particularly with models that use VW’s own batteries. They lowered guidance earlier this year from 11% EV sales share to 8–10%. Hildegard Wortmann, who oversees VW’s marketing and sales explained, “Our order intake is below our ambitious targets due to the lower-than-expected overall market trend.


Their global corporate CFO described the American EV market as a “brutal space” as the company continues to discount vehicles. That dreary statement doesn’t require further elaboration.


It continues to maintain its growth, dominance and profitability. They have grown in sales from $54 billion in 2021 to $95 billion in 2023 and grown their net profit from $5.5 billion to $10.8 billion respectively. In 2023, they made a net profit of $5.323 per EV. Yes, their US market share (roughly two thirds) is lower, but as a shareholder and rational capitalist, these achievements are both impressive and sustainable.

Author update: On 1/24/24, Tesla announced disappointing quarterly results and warned about “notably lower” EV volumes in 2024.

As a result of their recent American United Auto Workers (UAW) strike settlement, GM, Ford and Stellantis (4th largest global auto company and owners of 14 brands including Chrysler, Jeep, Fiat, etc.) will be forced to raise prices while Tesla continues its quest to make EV’S more affordable to the mass market versus just targeting mostly the high-end buyer. The UAW settlement places the old legacy companies at a huge positioning disadvantage to serving that market in the future.

Compounding the pricing pressure that face EV manufactures around the world is the quickly growing and massive future presence of China. As a CNBC article published in September 2023 states, “Europe is one of the largest (second after China) mass market vehicle markets … If the Chinese EV makers want to secure a growth path beyond their local market, its very logical to look at Europe,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC. He went on to say, “if Chinese carmakers enter the market “as per normal,” then incumbents may concede up to 5% market share by 2030. But these new entrants could grab up to 20% market share if their entrance into Europe is more aggressive than expected”. The ruthless price leverage from both the Chinese manufacturers and Tesla will likely cause companies to vacate the EV market and re-focus on hybrids. The 4 companies that you probably don’t recognize are all Chinese.

Source: Statista

So, what’s the problem with EV’s? According to a November 2023 article in Money magazine Toyota Chairman Akio Toyoda told reporters that “people are finally seeing reality.” And added “fewer Americans are ready to switch to EVs than automakers or government officials thought.” In the same article, he states that dealers EV inventories have recently increased to as much as 50% over normal historic standards. CNBC has recently conducted automotive dealer interviews confirming this point. This 8-year chart also used on CNBC in January 2024 supports Chairman Toyoda’s comment.

Author Update: According to CNBC, 1st quarter 2024 EV year-over-year sales increased 3% versus 45% for hybrids.

According to Consumer Reports, hybrids are more reliable than gasoline cars or plug-ins. “This is because hybrid technology is now over 25 years old and has been offered mainly from the most reliable auto makers,” stated Jake Fisher, their Senior Director of Auto Testing.

Additionally, hybrids get great mileage and are priced on average under $40,000 which is more affordable for many buyers versus EV’s, which average over $50,000.

EV’s also suffer from charging inconvenience, range anxiety and a stigma about horrific car battery fires.

J.D. Power, an American data and analytics and software company, reported “Through the end of Q1 2023, 21 percent of EV drivers using public charging stations experienced charging failures or equipment malfunctions that left them unable to charge their vehicles.”

These are all genuine concerns. Affordability and charging issues has a more negative impact on low-to-middle income households, which represent 80% of all Americans. And finally, EV’s (and hybrids) are very dependent on fossil fuels and will remain so for generations. According to the EIA, about 60% of US electricity generation comes from fossil fuels — coal, natural gas, petroleum, and other gases. Hybrids are turning out to be exactly what was originally expected: a bridge technology to pure EVs.

The current market structure will become very top-heavy with many unprofitable or barely profitable companies competing for the same higher-end buyers while Tesla and the Chinese will own the much larger mid-to-low end market.

Politicians placing a heavy thumb on the scale with a $7,500 giveaway per vehicle (tax credit), infrastructure funding (charging stations) and setting aggressive and arbitrary transition mandates while paying the bill with taxpayer money isn’t free market capitalism — it’s central planning (think communism). For instance, when automobiles were introduced over 100 years ago, the oil companies built out the needed infrastructure (gasoline stations), not the government.

Consumers have purchasing options and are migrating to hybrids vs. EV’s. I view this as a very promising development. For the record, I’m a hybrid owner and get 45 MPG. It’s great bridge technology.

Author’s update: On 1/11/24, the Hertz rental car company announced they were cutting back their EV fleet. On 2/27/24 Apple announced that it was pulling the plug on its EV project.

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Rick Margin

A curious guy interested in both understanding & writing about meaningful issues. Email @ ric62551@gmail.com. Join in at https://medium.com/@ric625