Former Ford CEO explains why 2024 could be a tough rear for EVs

Though automakers like Tesla  (TSLA) – Get Free Report remain somewhat optimistic about electric vehicles, one industry figurehead has a very rough outlook for EV growth during the upcoming year.

During a segment on the Jan. 25 broadcast of CNBC’s Squawk Box, former Ford President and CEO Mark Fields said that growth in the EV market has been slowing down since the second half of 2023. He blames one particular strategy that automakers have made as the core of the issue.

“The market share of EVs [in 2023] was up about 2.5 points versus the previous year, but in the second half of the year, you saw that growth kind of slow down,” the former CEO said. “Not to say that it is running out of gas, but you are starting to see now — if you go for mass adoption, that’s a lot harder than early adoption.

On top of concerns that potential electric car buyers have that include vehicle cost, the infrastructure of a charging network, repairs and insurance cost, he noted that the biggest concern that has emerged since the previous year is residual value – how much a vehicle will be worth down the line.

“They perform very poorly, EVs overall in residual value. A lot of that has to do with the price cuts that Tesla took,” Fields said. “So if the consumer thinks their vehicle is going to worth a lot less — overlay that with a lot of new products coming into the market this year, […] it could be a difficult year selling EVs from a pricing standpoint and market environment.”

Dealers urge for a break: 

A worker cleans a Tesla electric car at a Tesla dealership in Burbank, California. Mario Tama/Getty Images

On the same day that Fields appeared on CNBC, a coalition of over 4,700 auto dealerships called “EV Voice of the Customer” sent a second open letter to President Joe Biden urging him to reconsider a controversial EPA proposal that is expected to be finalized this year.

This new letter contains many of the same messaging as a similar letter backed by nearly 4,000 dealers penned by Baxter Auto Group CEO Mickey Anderson in November 2023, which pleaded to the current Administration that car buyers are not ready for the switch because of associated issues such as charging infrastructure, the reduction of tax incentives and range anxiety.

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“It is uncontestable that the combination of fewer tax incentives, a woefully inadequate charging infrastructure, and insufficient consumer demand makes the proposed electric vehicle mandate completely unrealistic,” the coalition pleads.

“Wait for the battery supply chain to develop outside the control of China,” the letter continued. Wait for the charging infrastructure to support a significant increase in electric vehicles. And wait for the American consumer to make the choice to buy an electric vehicle, confident that they are affordable and won’t strand them because of a lack of charging stations.”