Former Ford CEO Mark Fields said on Tuesday that US automakers overestimated consumer demand when they started ramping up production of electric vehicles.
“Over the last couple of years, the automakers really went full bore in putting in capacity for EVs,” Fields, 64, told CNBC’s “Power Lunch.”
“They really didn’t have a good discussion on the consumer, in terms of what it was going to take to get the consumer to buy these EV products,” Fields said.
Representatives for Fields did not respond to a request for comment from Business Insider.
Fields started his career at Ford in 1989 after graduating with an MBA from Harvard Business School. He held a variety of senior leadership positions at Ford, and was the company’s chief operating officer from 2012 to 2014 and its CEO from 2014 to 2017.
Some of the big bets automakers made on EVs have come undone “over the last 18 months or so,” Fields told CNBC.
General Motors said in an exchange filing on Tuesday that it was taking a $1.6 billion charge “based on a planned strategic realignment of our EV capacity and manufacturing footprint to consumer demand.”
The company said it expected the “adoption rate of EVs to slow” after the Trump administration eliminated federal EV incentives.
Under the Biden administration, EV buyers were entitled to a $7,500 consumer tax credit if they bought a new EV and a $4,000 consumer tax credit for a used EV. Both schemes expired on September 30.
“This is clearly an issue where the market didn’t develop the way automakers thought. A lot of them, particularly in GM’s case, boasted that they had the full lineup of EVs,” Fields said on Tuesday.
“And what was an advantage, at least they thought at the time, has now probably turned into a bit of an albatross as the market take-up of EVs is going to be lower, at least in the near to medium term, than they plan for,” he continued.
Auto chiefs have expressed mixed views on whether the rollback of federal EV incentives would hurt the US EV market.
Ford’s current CEO, Jim Farley, said last month that the expiry of federal EV incentives could halve US EV sales.
“I think it’s going to be a vibrant industry, but it’s going to be smaller, way smaller than we thought,” Farley said on September 30.
Former Tesla president Jon McNeill, however, thought otherwise. McNeill said in an interview with CNBC on October 2 that the market can continue to “grow without subsidies.”
“In Europe, France and Germany in particular rolled subsidies off a couple of years ago, and what happened after that, surprisingly, was the market continued to grow,” McNeill said.
“That’s largely because the models continue to roll out from other OEMs, much like they have here,” McNeill added, using the acronym for original equipment manufacturers.
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