Declining Sales, Production Setbacks Add Miles to Bumpy EV Journey

Barely a week following the launch of Xiaomi’s highly anticipated electric car, which catapulted the electric vehicle (EV) market into the limelight, other original equipment manufacturers (OEMs) are once again dominating headlines, indicating an ongoing shift in the market landscape.

On Thursday (April 4), Swedish automotive giant Volvo announced that it had set a global all-time sales milestone during a single month, with 78,970 cars sold in March alone. This marked a 25% surge compared to the same month last year.

Volvo attributed this milestone largely to the growing popularity of EVs in its lineup, especially the new fully electric small SUV, the EX30. Overall, the company’s EVs accounted for 42% of global sales, with fully electric vehicles making up 23% of March’s sales.

“These numbers reflect the strength of our strategy and product diversity — offering fully electric cars alongside plug-in hybrids and mild hybrids in the right mix,” Björn Annwall, Volvo Cars’ chief commercial officer and deputy CEO, said in a press release. “We are making good progress towards our annual sales target of at least 15% growth and in the months ahead we will focus on ramping-up sales of our EX30.”

Similarly, in a manufacturing update that same day, Ford revealed an 86% surge in EV sales in the first quarter of 2024, alongside a 42% increase in hybrid sales compared to the previous year. The announcement highlighted plans to scale a “profitable EV business,” while diversifying its range of hybrid electric vehicles.

However, despite this optimistic outlook, broader challenges facing the EV market persist.

Notably, Volvo’s recent decision to cease funding for its affiliate, Swedish electric car brand Polestar, underscores the complex dynamics at play within the EV industry landscape.

Ford has also encountered setbacks in its EV endeavors, postponing the launch of two upcoming electric car models amid dwindling demand for electric cars. The production debut of its planned three-row electric SUV at the Oakville, Ontario assembly plant has been deferred from 2025 to 2027.

In a press release, the U.S. automaker cited this delay as an opportunity to “allow for the consumer market for three-row EVs to further develop and enable Ford to take advantage of emerging battery technology […].”

Additionally, the rollout of its all-new electric pickup truck, slated to commence in late 2025, is now expected to start in 2026, with a gradual production ramp-up to ensure quality. Overall, Ford’s financial reports indicate substantial losses in the EV sector, totaling approximately $4.7 billion last year and projected to range between $5 billion to $5.5 billion this year.

The slowdown in EV sales is also impacting Tesla, the leading EV manufacturer in the United States. Earlier this week, the company reported an 8.5% decline in sales of its electric cars in the first quarter of the year, marking the first year-over-year drop since the onset of the pandemic in 2020.

Furthermore, reports emerging Friday (April 5) of the cancellation of Tesla’s long-promised affordable car, a move investors anticipated would drive the company’s growth into the mass-market automotive sector, will likely hinder Tesla’s efforts to broaden its market appeal and cater to a wider audience.

Despite these challenges, a ray of optimism emerges with the collaboration between Mercedes-Benz and BYD, one of China’s leading EV manufacturers. The companies have partnered to develop a co-branded luxury sedan, the DENZA, aimed at facilitating BYD’s global expansion.

With plans to hit the market by the end of this year, the DENZA, equipped with BYD’s new energy technology, is poised to elevate energy luxury sedans to a global standard, potentially solidifying China’s position as a frontrunner in the EV race.