The Electric Car Transition Unravels Slowly, Then All at Once

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(Bloomberg) — The global transition to electric vehicles is beginning to unravel the way major changeovers often do: slowly at first, then all at once.

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This week brought a cascade of signals that the EV era is entering a more uncertain, more contested phase. The European Commission backed away from what had been the world’s most aggressive timeline for phasing out internal-combustion engines, granting manufacturers and consumers more time to move off gasoline. A day earlier, Ford Motor Co. announced $19.5 billion in charges tied to the retreat from an electric strategy it vowed to go all in on eight years ago.

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The pullback is no longer confined to a few laggards or skeptics. From relative newcomers to legacy giants, the signs of reckoning have been mounting for months.

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Take Tesla Inc., the US company that did more than any other in the world to kick-start the EV uprising. The Elon Musk-led manufacturer was never going to keep up the meteoric rise pulled off at the beginning of the decade, but it’s no longer just slowing down — worldwide vehicle deliveries are poised to drop for the second year in a row. Musk’s interests have wandered from pursuing a $25,000 electric car to developing humanoid robots and driverless taxis.

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China’s BYD Co. will become the new No. 1 purveyor of battery-electric cars in 2025, though it too is now having growing pains, with total sales falling each of the last three months. The company is still producing one plug-in hybrid with a gas engine under the hood for every battery-only EV, and its momentum is stalling in part because authorities in Beijing are increasingly scrutinizing pricing practices.

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Ford has had plenty of company in struggling to catch up with the electric leaders.

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Its archrival General Motors Co. recently incurred $1.6 billion in charges tied to paring EV production capacity, and flagged more such moves may be in the offing. Stellantis NV has scrapped plans for a fully electric Ram pickup and revived gas-guzzling V-8 engines that it will have no trouble selling in a US market that has hollowed out fuel economy and emissions standards.

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When Volkswagen AG — Europe’s carmaker that was once most motivated to chase Tesla — ends output of electric ID.3 hatchbacks this month in Dresden, it will be the first time in 88 years the carmaker will have ceased production at a German assembly plant. VW too has taken substantial financial blows, booking €4.7 billion ($5.5 billion) in charges tied to its subsidiary Porsche AG reversing from EVs.

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For all the challenges the industry is having, the transition isn’t being abandoned.

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“EVs remain our North Star,” GM Chief Executive Officer Mary Barra told investors recently, and she’s repeatedly stated batteries are fundamentally better than internal combustion engines.

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Volvo Car AB, which had lobbied for the EU to keep in place its effective phase-out of ICE-powered cars by 2035, noted EVs are a segment of the car industry that is growing.