Weekly "Focus" and EVs in the Slow Lane

Sluggish demand is forcing some of the world’s largest automakers to scale back production of electric vehicles (EVs). During the summer, General Motors announced a delay in opening a second plant to produce electric trucks and Ford announced that it was reducing its EV development budget by US$12 billion. As well, Volvo has scaled back plans to go to an all-EV line-up by 2030. One of the biggest hurdles facing consumers looking to switch to EVs is the lack of a comprehensive charging network. The parking lot I use near my office has installed at great cost quite a few charging stations. The challenge is once the spots are taken in the morning the cars are there all day restricting access to other drivers. To encourage EV adoption, some provincial governments are still offering subsidies – of Canada’s three largest provinces BC and Quebec provide up to $4,000 and $7,000 respectively whereas Ontario no longer offers any incentive. Tesla remains the dominant producer of EVs with around 20% of the global market followed by Chinese automaker BYD Auto at 15% (ii).

 

	Total Return in 2024	Dividend Yield
Ford (F)	-8.3%	5.7%
General Motors (GM)	+32.4%	1.0%
Tesla (TSLA)	-13.1%	0.0%

Source: FactSet, Values as of September 6, 2024

 

This week’s "Focus" from our economics team is attached.

 

Have a great weekend,

 

Brad

Senior Portfolio Manager and Senior Investment Advisor