FORD and General Motors have announced a postponement of billions of dollars in EV investment and a reduction in production volume on faltering EV buyer demand.

However, both car-makers said they are committed to the technology and that they won’t cancel future EVs or mid-decade profitability targets.

GM told Automotive News that it no longer will provide EV production targets but still expects to have the capacity in North America to build one-million EVs a year by the end of 2025. 

Ford said it would push back about $US12 billion in EV spending, including delaying one of two joint-venture battery plants it is planning in Kentucky.

GM and Honda also abandoned plans to co-develop a line of affordable EVs starting in 2027. It made the agreement in 2022.

Automotive News reported that the vice president of global vehicle forecasting business AutoForecast Solutions, Sam Fiorani, said Ford and GM were balancing volume and profitability as the US EV market became more saturated without enough buyers.

He said if GM and Ford were to add hundreds of thousands of units of capacity it would further crowd the market and require lower pricing to move inventory.

“The market itself is the bigger factor here, and the buyers are just not ready to transition in the volumes that everybody needs in order to make a profit,” Mr Fiorani said.

GM executives said that the company withdrew its commitment to build 400,000 EVs by mid-2024 as it works to balance production with demand. It will retain its pledge for a 2025 capacity target of one-million units and its goal to make its EVs profitable by then.

GM CEO Mary Barra said that the company will delay three upcoming models — the Chevrolet Equinox EV, the Chevrolet Silverado EV’s first retail-oriented trim and the GMC Sierra EV Denali — by a few months.

That followed a decision to push back production of electric Silverados and Sierras at a second plant — Orion Assembly north of Detroit — until late 2025.

GM said the Orion move would defer at least $US1.5 billion in spending. It said that the delay was caused by the need to “better manage capital investment while aligning with evolving EV demand” and improve profitability with updated engineering.

Ms Barra said: “It’s clear that we’re dealing with a lot of near-term uncertainty” in relation to the slow EV transition and the ongoing auto workers strike.

Automotive News reported that Ford would delay the construction of one battery plant and also reduce production of the Mustang Mach-E.

Ford CFO John Lawler said EV sales were still growing, but “just growing at a slower pace than the industry and, quite frankly, we expected.”

Mr Lawler said Ford was not cancelling second-generation EVs, including a three-row utility and full-size pickup, though he declined to say how long the company would delay its EV investments or the battery plant.

“As demand has softened, we’ll need less capacity in the near term, so we’ll push out that investment until the time when we need to put that capacity in place,” he said.

“There’s tremendous downward pressure in the EV segment right now on pricing.

“What this is teaching us is that going forward, it’s really a cost game. The market leaders in EVs have the lowest cost structure.”

But it’s hardly all bad news. Globally, Bloomberg predicts that more than 14 million EVs will be sold in 2023 – up 35 per cent on 2022 and another record for the industry.

The rise is being driven by China. Battery-electric vehicles (BEVs) made up 38 per cent and 32 per cent of passenger-car sales in August and September, respectively.

Europe has been surprisingly resilient. Sales in Europe are estimated to climb by a fifth this year, to around 3.3 million units, although subsidy cuts in markets including Germany could still impact the final tally. 

Bloomberg expects Tesla’s Model Y to become the world’s best-selling vehicle of any type this year after breaking into the top five in 2022. 

Tesla and BYD combined will account for around 6 per cent of the global vehicle market this year. 

In addition, 1.4 million changing points around the world will be added to the tally this year.